Ladies and gentlemen, welcome to the half year 2021 results conference call and live webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. Webcast viewers may submit their questions or comments in writing via the relative field. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Toby Reeks, Senior Vice President, Investor Relations at SGS. Please go ahead. After the presentation, there will be time Yes? Toby, I think you're breaking up. After the presentation, there will be time. Okay. Frankie and Dominik, if you can hear me, I apologize. Yeah, Toby. Please just go ahead with the presentation. Toby, we can hear you now. Please carry on. Okay. Well, thank you for joining us, everyone. I'll just have a quick recap. Shortly, Frankie and Dominik will present our first half results, which demonstrate a strong performance. After the presentation, there will be time for Q&A. When there is, please keep your questions to a maximum of 2. With that, I will hand over to our CEO, Frankie, to start the presentation. Frankie, please go ahead. Thank you, Toby. Good afternoon, everyone, and welcome to our first half result. I hope that everyone can hear me properly. As usual, I will give you a highlight of our performances, then Dominik will give you more detail walk-through our financials, and I will come back to give you a bit of the flavor for the second half of the year with the different business lines. Let me start with the first slide, related to COVID-19 situations. Unfortunately, there are still many parts of the world and our network that are affected by the COVID-19 pandemic. We're doing, as usual, our utmost to protect our colleagues and their families. Many of the actions that we have implemented in 2020 remain in place, including travel ban for non-essential visits, working from home policy wherever possible, use of remote technology for inspectors and auditors, PPE requirement, additional shift adapted to COVID safety requirements. In addition, we have also implemented facilitation of voluntary vaccination programs for our colleagues in affiliates where the government allows us to do so. I would like to take this opportunity to thank the 90,000 colleagues that we have in the network for their dedication in ensuring the day-to-day running of our operations, and also for their discipline in implementing our COVID measures that have helped to limit the spread of COVID-19 across our network and in the communities where we operate. As indicated during the May Investors Day, we had a strong start of the year. This has continued during May and June. Total revenue has increased by 17.9% as constant currency, while the organic growth was 12.4%. Our adjusted operating income stand at CHF 457 million, a 40.6% increase at constant currency compared to 2020. As expected, the acceleration of our activities has led to a decrease of free cash flow, mainly due to higher net working capital. Our free cash flow decreased to CHF 93 million compared to CHF 220 million prior year. Our basic earning per share stands at CHF 36.29, an increase of 59.1% compared to 2020. During the first half, we have continued our investment into strategic priorities with six new acquisitions. Let me go through quickly to all of them. ADS, which is a food laboratories we acquired in the U.K., will complement our competencies in the pesticide and chemical testing in the U.K. Together with ADS, SGS Analytics U.K., part of the SYNLAB A&S acquisition that we made last year, and SGS Ashby, we have now positioned SGS as one of the key service provider for the U.K. food market. We also acquired the facilities of ISL from Novartis in Ireland, which will provide SGS with new competence centers and increase our capability to service our customers in the fast-growing life sciences industry as they continue to outsource to chosen partner. BZH in Germany is a leading specialist in hygiene consulting in the health sector. This is a very strong added-value services to our health sector customers and in line with our hygiene service development strategy. Metair Lab is active in the demand asbestos testing in France, particularly in the southeast, and will enhance our competence and market coverage. Autoscope is active in the area of vehicle inspections, control in France, enhance our service center network across the country. The last one, Brightsight, our latest acquisitions. Brightsight are a leading player in the field of cybersecurity as is a key addition to our portfolio in terms of service to the field of connectivity. Cybersecurity issues are increasing and will become a fundamental part of our testing portfolio. With Brightsight joining the SGS group, we are well-positioned to capture this growth opportunity. In terms of strategic evolution of the different initiative, particularly in sustainability and digital, let me report a few of the progress. Related to our laboratory information system, what we call the LIMS, our Mineral G6 solution is now covering about 45% of our GeoChem revenue, and more importantly, all the GeoChem testing data now are centralized into a single database, which will allow us to optimize data analytics to our customers. For WCS, what we call the WCS world-class services is the spin of the world-class manufacturing we're using from GE Automotive. Another two labs has passed their first audit since we met in end of May during our Investors Day. For the laboratories that has adopted WCS initially, we are now seeing a marked improvement of their processes, and also the start of tangible savings as we eliminate waste in our operations. For DigiComply, the regulatory tools that we have developed over the past two years are now is reaching market readiness for the food sectors. Over 100 companies of different size are using our solution now. We expect this number to grow as we continue our sales deployment across the network. At the same time, we continue to develop our Digicomply through other segment, like cosmetic and in the consumer food sectors. On that, I'm going to hand over for Dominik for review of the performances related to our financials. Dominik? Thank you, Frankie. Good afternoon, ladies and gentlemen. I will start with the overview of the financial highlights for the H1 2021. Frankie already mentioned the operating highlights in his introduction, with revenues of CHF 3.1 billion, adjusted operating income of CHF 457 million, and the free cash flow of CHF 93 million. Revenues for the group in constant currency increased strongly by 17.9%, driven by an organic growth of 12.4% and the contribution from acquisitions. Natural Resources posted mid-single digit growth, while all the other segments posted strong double-digit growth in the H1 2021. The adjusted operating income increased by 40.6% in constant currency to CHF 457 million, leading to an increased AOI margin of 14.8%, up 240 basis points at constant currency. Net profit after minority interest increased by 59.1% to CHF 272 million in the period under review, which is primarily a function of the operation performance. Cash flow from operating activities as well as free cash flow decreased by 17.2% and 57.7% respectively. Basically reflecting the increase of net foreign capital in light of the strong growth, higher tax payments, and for the free cash flow, also higher CapEx towards our strategic priorities. Organically, revenues increased by 12.4% in H1 2021. During the first half of 2021, we experienced a gradual business improvement leading to the same organic revenue level as in H1 2019. The contribution from acquisitions of 5.6% reflects primarily the consolidation of the A&S division of SYNLAB and Ryobi, while the other smaller acquisitions had a minor impact. The impact from currencies is, with - 1.1%, rather small. Moving on to the revenue growth by business. Growth in Connectivity & Products was with 13.8% strong. The acquisition of Brightsight contributed 0.5% to it. All SBUs showed a positive recovery and contribution to the overall growth. The strongest growth was achieved in Connectivity, also reflecting our continued investment into this strategic priority. Revenues in Health and Nutrition increased by 35.3%, of which 20.9% was organic. All SBUs and all regions achieved double-digit growth. We delivered the strongest growth in Health and Nutrition, benefiting from work related to COVID-19 vaccines, as well as a strong rebound of our activities in Northeast Asia and North America. Besides the Health and Nutrition part of the A&S acquisition, several smaller acquisitions contributed to the growth from acquisitions. Revenues in Industries & Environment increased by 22.2%. The Environment part of the acquired A&S division contributed strongly to the growth, while organic growth was 10%. Field services and inspection, technical assessment and advisory, as well as industrial and public health and safety posted organic growth above average, while oil and gas related services lagging behind. For Natural Resources, strong growth in minerals commodities, laboratory testing, and metallurgy was partly offset by weaker demand for OGC commodities, given the prolonged effect of the pandemic, as well as for agri-commodities due to a poor crop season in several European countries. Knowledge grew by 26.2% at constant currency. Management system certification was the main growth driver, with volumes and revenues exceeding 2019 pre-pandemic levels in all regions. Customized audits also showed a strong recovery, while the recovery in consulting and training is underway. From a regional point of view, we delivered double-digit organic growth across all regions. The Eastern Europe and Middle East countries achieved double-digit growth across the majority its end markets and are well ahead of H1 2019 levels. Turkey posted very strong double-digit growth. Most of the key markets in Europe achieved double-digit growth, while some did grow single-digit. Key markets in Africa are lacking with mid-single-digit growth. The organic revenue growth of 13.1% in the Americas is a function of double-digit growth in Latin America, while growth in North America is almost double-digit. Organic growth in Latin America is above first half 2019 levels. Organic growth of 14.1% was achieved in Asia Pacific. While the countries in the Southeast Asia Pacific cluster have just grown double-digit, growth in the Northeast Asian countries continue to be materially stronger, being now also strongly above 2019 levels, mainly driven by China, Taiwan, and Korea. FTEs at the end of 2021 increased by 6.8% versus prior year. The acquisition-related increase of 3.3% is, to a large extent, related to the acquisitions of the A&S division of SYNLAB, as well as Ryobi, both consolidated as of December 31st, 2020. While the non-acquisition related FT increase is with 3.5%, materially lower than the organic revenue increase. Average FTEs in the first half 2021 increased by 3.3%, materially lower than the revenue growth of 17.9%, leading to a strong productivity increase resulting from leveraging the benefits of our structural cost optimization program, as well as our active portfolio management. This was achieved across all regions as the difference between revenue growth and FTE development is in all regions in the 15% ballpark. The adjusted operating income increased at constant currency by 40.6%, which reflects the operational leverage on the achieved revenue growth, while increasing investments into our sales accelerate and business development programs to drive stronger growth, as well as into our level up initiatives to drive further productivity increases. Acquisitions added 3.7% to our growth in AOI, fully in line with our expectations. However, it should be noted that the acquired business has a materially stronger seasonality towards H2 compared to the total group. Currency had an adverse impact of 2.1%, leading to a reported increase of 38.5% in the period under review. AOI margin increased strongly by 240 basis points in constant rate or 230 basis points in actual rates to 14.8% in the first half 2021. On this slide, I would like to provide an update about the integration of the former A&S division of SYNLAB, which is in the meantime rebranded SGS Analytics. We are well on track to realize cost synergies of approximately CHF 20 million. The related changes in the management team and the integration into our regional and country structure was executed in the first quarter this year. All rebranding and related communication activities have been fully facilitated. The implementation of a common HR system is on the way. The ERP implementation, and with this, also the transfer of key finance processes to the financial service centers are expected to go live in autumn for Germany and the Nordics, and in H1 next year for the Benelux and the U.K. The LIMS implementation for the various countries will be based on the new generation LIMS supporting the digital lab approach. We progressed significantly regarding the implementation of the hub-and-spoke model. The implementation of the footprint consolidation in Health and Nutrition and Industries & Environment is progressing according to plan. At the same time, we are seeing also good potential for revenue synergies. During our investor days, seven weeks ago, I talked about the Level Up program and defined our 2023 and 2025 objectives for various initiatives in the area of finance, IT, and operations. Today, I would like to talk about the framework and approach to be used to achieve these objectives. For all initiatives for which IT is the key enabler, which is for the vast majority case, we implement a builders organization in order to be more agile, to achieve strong alignment between business, operations, and IT, and to reduce significantly the time to market. The builders organization is a product-driven organization in which the IT function works closely together with the business community to design the products. Through an integration layer design products will be built by the usage of the best delivery partners in close collaboration with our own in-house expertise. Furthermore, we will implement an OKR framework for each initiative, which helps to set and track the right priorities and accelerates time to implementation and consequently the time to market. Overall, the level up initiative is progressing very well with the Financial Service Center Onboarding, including our group ERP standard solution for South Africa, the Nordics, and the German activities of the A&S division in autumn. The initiation of the global rollout of the fully standardized, integrated, and digitalized third-party certification system for Knowledge, and the design of the core for the digital lab model for environment, food and life lab testing activities, to mention some of them. Let's turn to the profitability by segment. Our most profitable segment, Connectivity & Products, reported a margin increase of 160 basis points to 23% on a constant currency basis, driven by strong operational leverage in hard lines and a good margin increase in connectivity despite continued strong investments in that segment. The Health and Nutrition division strongly increased the adjusted operating income margin by 470 basis points in constant currency. All SBUs achieved material margin increases. Strongest increase was achieved in the health science SBU. AOI margins in the Industries & Environment increased by 310 basis points, driven by all SBUs except for services related to the oil and gas end markets, given muted demand. AOI margins in the Natural Resources declined by 150 basis points to 12.6%, as margin increases in laboratory testing and metallurgy were more than offset by decreasing margin in trade activities, the latter primarily reflecting the weakening top line in OGC and agri-commodities. The strongest margin increase was achieved in the Knowledge segment with +930 basis points, reflecting the strong recovery. All segments contributed materially to this achievement. Moving on to the balance sheet. The increase in goodwill and tangible assets is primarily due to the consolidation of a couple of smaller acquisitions, as well as price side and currency changes. The increase in unbilled revenue, work in progress, and trade AR is a result of the strong growth experienced in the first half 2021, while DSO are stable. The increase in long-term loans and other financial liabilities of CHF 538 million since the end of last year is primarily due to the successful EUR 750 million bond issue in H1, partly compensated by the reclassification of long-term to short-term debt of another bond, given the maturity profile. The reduction of the current loans and other financial liabilities of CHF 529 million since the end of last year is primarily coming from the repayment of the CHF 275 million bond matured in May 2021, as well as the repayment of the bridge facility for the acquisition of the A&S division of SYNLAB, partly offset by the reclassification of a bond from long to short term, as mentioned before. Net debt increased from CHF 1.5 billion at the end of last year to CHF 2.1 billion, which is mainly driven by dividend payment, which occurred in the first half 2021. Cash flow from operating activities decreased by 17.2% to CHF 332 million, reflecting the increase from net working capital given the strong revenue growth, as well as higher tax payments, more than offsetting the strong increase in profits. Furthermore, free cash flow decreased by 57.7% as our investments into our strategic priorities increased according to our plan. We paid dividends of CHF 599 million, issued a EUR 750 million bond, leading to an inflow of CHF 870 million, while repaid a CHF 275 million bond, as well as the bridge facility for the acquisition of the A&S division of SYNLAB. The management of net working capital continues to be a very strong feature of SGS. Operation net working capital in percentage of the last 12 months revenue is with -0.1% on a very similar level as for half year 2020 with -0.2%, despite the strong revenue acceleration experienced. The strong working capital management is supported by our EVA performance management approach, as well as several of our level up initiatives. CapEx in H1 2021 increased strongly by 38.9% to CHF 150 million, reflecting our accelerated investment focus into our strategic priorities. CapEx and percentage of revenues increased to 4.8% versus 4.1% the prior year, in line with our 2023 strategy targeting CapEx in the higher 4% level. Almost 30% for our CapEx is allocated to C&P, and here especially towards connectivity in Northeast Asia, which is of high strategic priority. 17% of the CapEx was allocated to Health and Nutrition, with a strong focus on health science. The CapEx allocation for Industries, Environment, and Natural Resources is to a large extent related to client driven projects. To sum it up, our revenue in H1 2021 strongly increased by 17.9% in constant currency, of which 12.4% organically. Strong operational leverage was achieved as our adjusted operating income increased by 40.6%, leading to a margin increase of 240 basis points in constant currency. Our free cash flow decreased given the increase in net working capital, a result of the strong revenue growth acceleration, as well as the increased investments towards our strategic priorities. With this, I hand back to you, Frankie. Thank you, Dominik. Now let me go through the outlook of our five divisions. Before that, I would like to highlight here that while we are seeing a strong market development and recovery across the network, the comparison of H2 versus prior year would be more challenging than it was in H1, considering the significant disturbance created by COVID-19 in H1 2020, and the subsequent partial recovery H2 2020. In line with the guidance 2021 that I have given you in January at the full-year result, and in May at the Investors Day, I'm going to give you a flavor of how we expect the five division to perform during H2 of this year. Note that all the divisional growth outlook comments related to H2 organic growth and our in relation to the group average growth. Let me start with Connectivity & Products. Connectivity & Products growth should be broadly in line with the group average. Connectivity should see its momentum carrying on into second half of this year, with strong testing demand for wireless activities such as 5G and IoT, and also an improvement of orders related to the automotive sector. Choice vaccinations will also see good growth momentum into the second half, with new programs starting in Morocco and in Nigeria, and with an expected volume improvement in TransitNet, particularly related to Brexit. Software will continue to see solid growth in traditional testing activities, but this will be offset by tough comparisons to prior year due to the sizable volume of PPE testing we had in the second half of 2020 that will not repeat this year. If I move to our Health and Nutrition. Health and Nutrition growth should outperform the group average. We're expecting all four sub-sectors of health, food, cosmetic, and crop science to grow strongly. Health science will continue to be supported by our vaccine activities, but we are also seeing good growth in other sector related to drug development and clinical trials. Food will continue its strong recovery and with demand increase in Asia and in North America particularly, while the COVID-19 restriction will continue to impact the tourism and hospitalities sector. I move to Industries & Environment. Industries & Environment growth should be broadly in line with the group average to possibly a bit below. Our health and safety services should continue to perform well moving into the second half, with possibly some uncertainty related to the tourism and hospitality sectors due to COVID-19. Likewise, we expect a good second half related to environmental services as the market situation return to normal, and we're getting into the seasonally stronger second half. Industrial services should see a mixed performances with new projects starting, while we continue to see some delay of some project due to COVID-19. The end of certain government contracts, for example, in Ghana, would put pressure on the growth of our government mandate, but we expect those to be partially compensated by growth in other contract as economic activities continue to improve. Moving to Natural Resources. Natural Resources growth should be broadly in line with group average to possibly a bit above. We expect Mineral Services to continue its momentum into second half as exploration spend in the mining industry continue at elevated levels as a result of strong market drivers and demand for raw materials such as iron, steel and copper. Agricultural services should see a better second half as current prediction for the new crop season is good for Europe and other regions. We are anticipating higher volumes than in the first half of the year. Oil gas chemical volume remain volatile. The higher oil price, together with a significant decrease of inventory and an increase of consumption, should lead to an increase of production. This should lead to some higher testing and inspection volume. Pricing pressure remains due to excess capacity in the TIC sector. The last one is Knowledge. Knowledge growth should be below the group average. In fact, the underlying market for Knowledge is solid. The slower growth predicted in the second half is mainly due to a tough comparison to last year, where we had a good amount of orders delayed from first half of last year to the second half of last year. Also, comparing growth between first half and second half of this year, 2021, first half also benefited from some catch-up orders coming from the second half of 2020, which have now largely been completed. As said, the underlying market condition are solid, and we are seeing strong recovery of training and consultant activities, and increasing demand for ESG and cyber risk management related services. On that note, let me go to our guidance 2021. In fact, our guidance 2021 remains the same as I gave them to you in January and in May during our Investors Day. They are, let me repeat them. Solid organic growth normalizing for the impact of COVID-19. Improving the adjusted operating income margins. Strong cash conversion. Maintaining best-in-class organic return on investor capital. Accelerating investment into our strategic focus area with M&A as a key enabler. At least maintaining or growing the dividend. To the last slide. It's just a reminder of our midterm objective 2020-2023 target. I will not go through them in details as I presented this slide during our Investors Day. What I would like to emphasize here is that as a company, we are very clear that focus on financial performances is not enough any longer. We need to be more accountable on the non-financial metrics as well. This includes having ESG criteria in the short-term and long-term incentive of the management, which we have introduced this year. As just presented by Dominik, we have also continued our investment for the long term, as we're confident that the drivers of the TIC sector are strengthening and our services are becoming more relevant in many end markets. To conclude, before we go to Q&A, I would like to thank again my colleagues of the entire SGS Group and the Operations Council for their dedication and courage during those rather challenging time. On that, Toby, I'm handing back to you for the Q&A session. Thank you, Frankie. Thank you, Dominik. I'll pass it over to the operator to read out the rules, and then we'll get started with the questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested use only hands that while asking a question. Webcast viewers may submit their questions in writing via the relative field. Anyone who has a question may press star and one at this time. Okay. Thank you very much. Paul Sullivan, you're first on the list, so please, Paul, go ahead. Yeah, thanks, Toby. Good afternoon, everybody. Just you two for me. Could you perhaps clarify the June organic exit rate versus 2019? Is there any reason to suggest why we shouldn't extrapolate that through the second half? Indeed, why doesn't growth on that two-year view accelerate from here? That's the first question. Secondly, the organic drop-through was clearly very high in the first half. How should we think about the second half margins compared to the 19.3% last year and the biggest divisional deltas that we should be looking at? Thank you. Thank you, Paul. I think this question is for me. If we look first to the organic number. June was definitely up compared to 2019. A monthly basis is not that relevant in our business, but it was definitely up compared to 2019. Overall in the first half, we were in line with 2019, which was the same April year to date when we had the investor days. It basically imply May was somewhat below 2019, June was above 2019. Going forward, I think it's reasonable to believe that there should be a bit of outperformance in the second half of 2019 for two reasons. In general, having achieved same organic level like first half 2019 this year needs to be seen with the knowledge that in the first half this year still a lot of parts of the economy in various jurisdictions were still not yet back to normal, not yet open, especially at the beginning of the year. Hopefully the vaccination will help to open them up. Needless to say, there will be maybe here and there from the Delta variant also some shorter negative impacts, but in sum it should be hopefully slightly net positive. I think the other thing we need to consider if we think about 2019 as a comparison, there was definitely from a growth point of view throughout 2019, a bit of deceleration in the second half also related to the fact that we shut down some contracts which were value destroying, which was good for the profitability, but yeah, as a bit easier come the second half. From this point of view, I would say it's reasonable to assume that in the second half should be some growth acceleration compared to 2019. If you think about profitability, I think the profitability in the second half last year and as we outlined this to the full year results was of course very strong for several reasons. As we said at the time, we had a very big recovery from bad debt. The PPE business which kind of kicked in in May but accelerated strongly in the second half with very high incremental margin was of great help. There was obviously also in the second half still some subsidies from governments. As Frankie for example outlined with the Knowledge business, there was some movement of Knowledge activity from H1 to H2. If you use the same auditor so to say you drive a much higher productivity. That should be all considered. Therefore obviously the margin will be clearly below the second half. To help you a bit or to think how I would look to it. If you look back to history and say, okay, seasonally or how the business is structured, H1 margin is always clearly lower than H2. If you look back, ignore the year 2020 because it was artificial, but if you look 4 or 5 years before back and look how the margin evolution was, it was on average an increase from the H1 margin to the H2 margin of around 250 basis points, yeah. 2016 was in line with this 250, 2017 and 2018 was slightly lower, 2019 was higher and yeah, we are confident that it will be higher, yeah. Maybe more on the 2019 increase, but obviously there will be a drop on a year-over-year comparison in the second half. For the full year, margin should definitely increase, clearly. Okay. That's even with the M&A kicking in more in the second half, some of the more cyclical businesses like Minerals starting to come through, some of the drags in the second half starting to offset. Yeah. That's the reason why I'm saying we are confident that we will be clearly higher than the historic trend of the 250 basis points. Obviously, last year it was more than 600, which is, of course, not achievable. It should be clearly above the 250, because the seasonality of the environment business, more environment exposure gives us more seasonality in H2. Definitely, yeah. Okay. That's helpful. Thank you very much. You're welcome. Thank you very much, Paul. The next person we have on the line is Neil Tyler from Redburn. Neil, please go ahead. Yeah, good afternoon. Thank you. Two related questions from me, please. You mentioned the average growth in the softlines business was held back by PPE. Excluding the PPE, if you're able to do that, would that growth have been more in line or perhaps even above the divisional average? Secondly, I think probably related to that, in your introductory comments, I think it was Frankie that mentioned the very strong performance in Turkey. I wondered if you could talk a little bit more around the detail of that regional performance, and whether you think that might have been borrowed from elsewhere, other regions. Thank you. If you think about the softlines, definitely the softline business already in H1 is below the growth rate of this consumer Connectivity & Products growth rate in H1, and this is related to PPE. If you would strip this out, it would be pretty in line on this one. Obviously, for the second half, and I think Frankie said this in the outlook statement, the underlying, let's call it softlines and non-PPE, we see really good development. The big PPE impact will happen in the second half. The second half is the strong comparison. Therefore, softline in sum in the second half will be down. The reason is that we had very high PPE revenue in the second half last year. Do you want to say something? Yeah. I can talk about Turkey. It's Turkey that you mentioned, Neil? Yes. The situation in Turkey is that indeed, Turkey has for a few years already benefited from the near-shoring, you can call it, or the change of the supply chain from Asia, particularly China. Turkey is one of the nearshoring locations of a certain size for the European retailer. We have been seeing quite a lot of growth into the textile industry for Turkey, particularly with what they call the fast fashion. This is quite trend sensitive, and Turkey is pretty good at that as well. Beside that, I would say the general Turkey portfolio with this industrial work and some of the Health and Nutrition activities has also improved in Turkey. Thank you very much. Thank you, Neil. We now have J.P. from Vontobel. J.P., please go ahead. Thanks, Toby. Good afternoon, gentlemen. The first one is on capital allocation. I don't know if you can share with us how much was invested in the first half behind the strategic priorities you were mentioning, and how much into IT? Maybe to remind us, what is the payback when you're investing in such growth activities? Related to capital allocation, I was a bit surprised by the price paid for Brightsight. If you can give some additional info or color on this acquisition, what is probably your competitive position and how you expect this company to develop? The very short one, second one would be on the Health and Nutrition. You are talking about PPE in the Connectivity division, which had a positive impact related to COVID. You're mentioning health science as well, driven by COVID-related activities with the vaccines. How much was it a boost to sales, as it was more than 10%, I think above 2019 level? Thanks. Should I start? JP, Dominik speaking. Hello. If you think first about the capital allocation, clearly overall the, let's say the increase of CapEx and percentage of revenue compared to prior year is driven by, on the one hand, allocation more CapEx into areas of high strategic priority for growth, which is a lot. For example, Connectivity & Products, the whole C&P was 28% of the total CapEx. The biggest part was going to Connectivity & Products, but also Health and Nutrition. In that respect, overall from the overall CapEx, around 15% of it is going towards IT systems, and a lot is related to the new generation systems which we're rolling out. On the acquisition, if you look to the cash outflow in the first half, Brightsight is for sure the biggest part of the outflow, but there were several smaller acquisitions also considered like Health science acquisition in Ireland, like a food business in the U.K., and a couple of other smaller ones. For us, Brightsight is strategic of very high priority. We see a lot of synergy potential with our Asian client base, and based on the price we paid, we believe we get this acquisition in year 3 EBITDA positive, and therefore, we believe it's the right price. Maybe just to add, Jean-Philippe, in terms of competitive landscape, Brightsight is one of the leading cybersecurity company in the chipset industry, which is basically what we always said in terms of cybersecurity as a starting point. You need to make sure that the highway is cybersecurity safe, there are new regulations coming on board on this aspect. While the European has set the Cybersecurity Act with some additional requirement, you see that this would be extended into other regions, as this is the global play and not just a regional issue. Cybersecurity is part of the evolution of our portfolio. We see more and more of our customers asking for integrated solutions, which is not just the EMC safety functionality or life cycle that we see. Cybersecurity and interoperability is part of the portfolio that we need to offer. Brightsight give us the clear competitive advantage with their network, strong position in Europe and the network in some Asian countries that would be leveraging with our Asian customers as well. There was a second question or? Jean-Philippe, was there a second question or we answered both of your question? Yes. How much was the impact of the vaccine-related activities in health science? Sales in the Health and Nutrition were really clearly above 2019 level, and I just wanted to check how much was the impact of this health science activities. We had around close to CHF 20 million. Thank you. Thank you. The final question we have on the conference call, and I remind everyone, please do join if you'd like to ask a question. It's from Daniel Berky. Daniel, please go ahead. Yeah. Good afternoon, gentlemen. I would have a question regarding streamlining of your portfolio. You did mention this. You still see areas where you could dispose of some businesses, especially if I look at the margin in Industries & Environment and also Natural Resources. Hi, good morning. Good afternoon, Daniel. I would ask, maybe Dominik can add more, but let me start. We do have plan for optimizations, but as you know, we usually do not talk about which area, as we like to ensure that our colleagues is involved or concerned, do not find out that during a conf call with doing the first half result. I would simply say that it is a constant review. We understand where the market is evolving, where we have opportunities, or where the opportunity in the mid, long term will disappear. We are constantly looking at this, and there, we do have a few topics on the table that the management is considering. Maybe just to add as well. I think SGS did a lot up to mid-end 2019, actually. There were quite some disposals happening, amongst others, a very sizable one in the U.S. Obviously, as the pandemic started, also the M&A market was certainly for a certain period closed. While the M&A market is opening up, today it's primarily open for, let's call it, non-cyclical business. As you pointed out, these two units, they are slightly more cyclical. As we said also at the investor day, when we look to the part with very low relative market share with low growth, there could be definitely here and there potential to dispose. It's not the biggest businesses, but there need to be also a market to make this happen. I think it's a question of time, and then we can dispose one or the other of those assets. Thank you. Okay. Thank you very much. I'll now go to the webcast where we've had one question from Rajesh Kumar from HSBC, and it's a 2-part question. The first is, are there 1-off revenues or cost reductions that might not repeat in the second half this year, or that will get comparables year? We'll start with that 1. I think that's to you, Dominik. No. Let's say from a runway point of view, it's not that we have one-off revenues or so on. If you think about the PPE, the PPE already slowed considerably down into the first half. Yeah. Maybe it will be in the second half a couple of million CHF lower than first half, but it's not meaningful. While if you think about the vaccine on the positive side, this is supposed to continue also in the second half. I would not say that there are certain one-offs, in one or the other direction. Nor on the cost side. Okay. Thank you very much. The second part, which is also for you, Dominik, which is, what is the bad debt accrual rate and reversals in the first half? Basically, what's our bad debt situation in the first half compared with the first half last year? Let's say we had a bad debt accrual in the first half this year, also in the first half last year, but accrual this year was a couple of CHF millions lower, but not much lower. Okay, thank you. That's very clear. There's a couple more which have come in on the webcast, and then there's a couple on the call. I'll keep going on the webcast for now. This one's from Dominik Edridge from Deutsche Bank, and it's, "Can you please discuss staff turnover and whether we are seeing greater competition for talent, especially in areas like cybersecurity?" A more general comment is, "Are there any wage pressures building within the network?" I guess, Frankie, maybe that one for you in cybersecurity, and then Dominik, maybe you could talk about the wage pressure. Yes. The cybersecurity market is the tight market. We are specific focusing on the niche, which is the chipset and the hardware side. I would say the pressure to get expertise in this domain has not changed that significantly. I would say there's no particular mounting pressure. It may come over time because as the market is growing really fast and where the competence is kind of lacking across the network, so we're monitoring that. We're also seeing a concern in term of competencies in the health sectors as well. The life sciences industry and the pharmaceutical industry is also a sector, so monitoring on the situation as there's a lot of demand for competence and expertise. Besides those two sectors, the rest of the other sectors are, I would say, pretty much as the usual. We see some up and downs, but nothing to worry about. I would just point out those two particular sectors as being the more concerning one for the time being. From a wage point of view, where we see a bit of wage inflation, I think wage inflation will come. It's a question of time if we look to the overall inflation development. We're not seeing this yet too much in our numbers, but obviously we will increase our prices according to the needs. Here and there, you see this, for example, in certain locations, in Canada or so on, in the Minerals business, very strong demand. You have some wage inflation, but on the other hand, you have in this area also good power to make price increases. It's still rather selectively, and obviously while wage inflation was globally not the biggest theme the last years, our exposure to more emerging markets was always high, and we are used in these markets with wage inflation, how to deal with it. Okay. Thank you. That's very clear. I've got one from Raj Palwinder from AlphaValue. "What is the level of CapEx we're looking at in the second half? Will it be similar to the first half or higher? Will the split between IT, and the rest of the business," which he put up 15%, "remain the same? It will be on a similar level. Obviously the revenues in the second half is also higher, so it could be then 10 basis points lower. We have to see because the CapEx is not too much linked to the revenue development and the IT spending. When I said the 15% is for total IT, it's not only for the new initiatives. The new initiatives are part of it, obviously. It will be on a similar level. Yeah. Okay. Thank you. Overall, we're targeting. And then I have one from- what are we targeting? Higher- Okay. Thank you. I've got one from Neil Denman from Sarasin & Partners, and I guess this is probably for both of you. "What is the most significant difference today compared with when you were planning for 2021 at the end of 2020?" What is the biggest change that you see today, when you're planning for 2021 compared to the end of 2020? Sorry. When we're planning end of 2020, what's the difference, what we're seeing 2021? Yeah. What's the biggest change that you've seen since the beginning of the year, basically, I guess? We're now at the first half, so. Well, let me start. I would say when we were making the planning for 2021, I think while we were concerned about the evolution of the COVID-19 pandemic across the network, we probably have assumes that the impact or the disturbance would have been more subdued than it is today, because we see that, for example, the Delta variant and all that is coming up. Luckily, I would say fortunately, we had enough measures in place to avoid major disturbance in the network, so we had probably discrepancy into this. The second aspect is while we're developing the portfolio, we knew that the ESG issues was going to be a big topic, It seems that the market is much more driven that we have anticipated, in middle of 2020, we were discussing about the planning for 2021. This would be my two take right now. Maybe to add from my side. Dominik, did you have anything? Yeah. Yeah, I think if you just more look down to the numbers, I would say it's very similar. What is the case that we are maybe a bit better when it comes to the revenue growth than what we thought, at the end of last year for the first half. Yeah. A little bit, but it's not significant. A little bit better. It's pretty in line with our, let's call it budget assumptions, how we perform. Thank you. Very clear. We have another question from Bruno Regue. Can you please explain what attracted you most to the A&S division of SYNLAB? What cost synergies are we expecting, and do we expect any material revenue synergies? I know we published all of this quite recently, but Dominik, do you want to run through those factors, please? I think that there are a couple of points. First of all, if we look to the areas of high strategic priorities, like Frankie outlined, then not only the 2023 plan, also before, 92% of the revenues of A&S are exactly in line with these high strategic priorities, whether it's environment, whether it's life science, whether it's food. Secondly, we were quite impressed by the hub-and-spoke model for environment. We see because of this hub-and-spoke model, quite some opportunities to further roll this out by integrating this in our network. Very much progressed. Thirdly, we have seen rather big amount of cost synergies to be achieved, very much also in Germany with the network, and this will be the key driver of a CHF 20 million cost synergy, which we expect from this acquisition. I think these are the kind of three main points. Yeah. From a revenue synergies, there are definitely quite some opportunities. For example, if we think about the work which we do for AstraZeneca, having now on top the A&S division of SYNLAB, they have a laboratory actually here in Switzerland, which we can use as additional laboratory for this client. We're seeing this, but on the other hand, they're also coming in with clients which SGS had before, a smaller market share. We're definitely seeing quite some opportunities in that respect. Thank you, Dominik. We've got one more from Rajesh Kumar on the text, then we'll move back to the conference call where we've got 2 or 3 more waiting. The final one to read out is from Rajesh Kumar from HSBC, and it's a similar comment, similar question to what we've had before, but it's focusing on emerging markets. Are there emerging market wage inflation pressures building up? How, as a group, are we thinking about passing through these wage inflation pressures to our customers? I think in the emerging markets, we had before already wage inflation. It's not a new phenomenon. It's maybe a little bit higher, but we are used to it. Having a business which is so workforce-related than ours, it is something which is part of the daily life of our people operations to adjust prices accordingly. This is what we are doing. Thank you. Now could we move back to the conference call, please? Where we have Julian from Societe Generale. Julian, please go ahead. Thanks, Toby. Good afternoon. Just two for me, please. The first one regarding working capital. As expected, we've seen a significant working capital outflow in the first half. What should we expect going to the second half of the year with working flows normalizing? Secondly, regarding the price pressure you've had in the first half in the oil and gas-related activities in your Natural Resources division, could you give us more color on how do you see this will evolve in the second half? Thank you. If we think about the net working capital increase of the cash outflow, so to say of CHF 200 million, CHF 200 million+, it was basically on the same level like first half of 2019, but with the difference that we had very strong growth. This number, there will be obviously an increase on outflow for the full year, but it will be significantly lower than the status as of the first half, which is partly also if you look historically how our working capital seasonality works. That being said, that we in the first half, even operation working capital is slightly negative with 0.1%, gives us confidence that the full year is also, in terms of balance sheet position, a negative number. Definitely there will be an outflow, but significantly lower than the first half. Yeah. On the second question, Julian, is about the pricing on the oil and gas. Just to give a bit of color, I think that the oil and gas sector is under pressure, and a few of our customers are coming back with new tender requirements in terms of pricing discounts, as well as in terms of new tenders on the market is much more competitive in different regions. I think we are coping with that in the same ways that we've been doing in the past few years, where the oil and gas market has been under pressure. It's really to focus on customer service and on focusing on our key customers as well as varied other services. We will focus on not getting to the pure pricing discussions. You see that while we have not significant growth, we have also managed to keep a similar level of market share in this sub-public sector. We're still a market leader on that. We have managed to protect our margins to the best possible extent. Moving to second half, I think the market landscape would not change drastically. There are excess capacity on the market. There are regional players that wants to get market share, so they will use on those regional contract, somewhat aggressive pricing strategy. The strong position of SGS Group is a lot of those trading volumes are global. You need to have a global network so we can leverage our global network to ensure that we still keep our market share on those international orders while we may be able or may well have to give some concession into some of the more regional or local contract. This is part of what we've been seeing in the past few years. Very helpful. Thank you. Thank you. The next is a question from Caroline Price from Fargo. Please go ahead, Caroline. Yes. Hello, thank you. My first question is just on restructuring costs, which were only CHF 1 million in the first half, and I am wondering if we can expect a larger number in the second half, or if you could give any flavor there for any restructuring projects you have. My second question is just on the increase in the minority share of income. Would you say that was mainly attributable to better performance from Main Point, or were there other companies with minorities that contributed significantly there? Thank you. Yeah. Thank you, Caroline. Just to the first question, restructuring was very small with CHF 1 million. Will be higher for the full year, most likely number in the teens, but not massively. Will be definitely higher for the full year. Please bear in mind, besides this, that the integration costs for the integration of acquisitions are shown in integration, not in the structure and integration line, but there will be a bit more restructuring costs occurring in the second half. Regarding your question on minority, there are several items. First of all, last year we mentioned this, we had this dispute in Ghana with a contract which is finishing, which is basically now a legal case. There was a minority interest as well, so partners from us. Obviously when we had the write-down of the assets and so on, you have the effect also in the minority. Therefore, the comparison first half last year looks extremely low. The second reason or now to the part what are the reasons that minority is going up? Main point, it has an impact, but the other big impact is basically that we have, in China, several legal entities with minority interest and they're doing very well. I think this, I would say, is the main driver. Thank you. You're welcome. Thank you. Our final question is from Karl Green from RBC. Karl, please go ahead. Yeah, thanks very much. I've got a couple of questions. Firstly, for Frankie, just a broader question around the carbon border adjustment tax, which is obviously coming into focus in Europe and increasingly in Washington as well. I just wonder, are you having any materially different conversations with clients and industry verticals about how they might look to mitigate that, and also then with potential government clients as to how they might look to capture that tax? That's the first question. The second one, much more technically for Dominik, just around the depreciation, amortization, and impairment charge. That was down 10% year-on-year. I just wondered if you can indicate what the underlying change was, just stripping out things like the portfolio management and any sort of one-off impairments in either year. Thanks very much. Hi, Karl. To your first question, no. Actually, development, I think it's a pretty new requirement that we're still trying to digest with the team. I would say no for the time being. We are engaging to the European ETS system. We're looking at how this would impact with the rest of the network with this new requirement. For the time being, I have not had particular discussion with my customers. We're still looking at how this will evolve, I would say. Okay. Thank you. Sorry. Regarding your second question, it is down. Why? Because last year we had one-off items of CHF 35 million in the first half. If you adjust for this- Right. Thank you. obviously it's down. Yeah. Okay. Thank you everyone for joining us on the call today. For me, I'd just like to say have a great summer, everybody, and then I'll hand it over to Frankie for a couple of closing words, and I'm sure I'll speak to you all soon. Thank you. Thank you, Toby. First, thank you for joining the first half result. As we mentioned, it was a strong set of result and while we're seeing still some disturbance into our network and in the different country in terms of COVID, we are also putting all the measures in place to ensure that it will minimize the impact. We're pretty confident that the TIC market drivers are getting stronger and our outlook for guidance for the second half of this year and the full year would be where we believe should be. That's it. Thank you very much. Thank you very much. Goodbye. Ladies and gentlemen, the conference is now over. Thank you for choosing CoroCall and thank you for participating in the conference. You may now disconnect your lines. Goodbye.