Good morning and welcome to the SGS Q1 2025 sales update. My name is Ariel Bauer, and I'm in charge of communications and investor relations. I'm here with Géraldine Picaud, our CEO, and Marta Vlatchkova, our CFO. Please note that this call is being recorded and will be available for replay on the SGS website. Throughout today's presentation, all participants will be in listen-only mode. The presentation will be followed by a Q&A session, and you can register for questions at any time by pressing star one on your keypad. I would now like to turn the conference over to Géraldine Picaud, CEO of SGS. Thank you, Ariel, and good morning, ladies and gentlemen. Welcome to this conference call about our Q1 sales. We had a strong quarter to start the year. In particular, I am very excited about it. We reported the highest quarterly sales ever, close to CHF 1.7 billion, up 6.6%. This achievement is attributable to a strong organic growth of 5.6%, but also to our bolt-on acquisition policy, which now significantly contributes to total growth. In a few minutes, I will comment in detail on the drivers which have supported the market over the quarter. You will see that digital trust and sustainability have been instrumental here, confirming that we definitely made the right choice when we put them at the heart of our strategy. Looking at the months ahead, we recognize that we have entered into a period of economic uncertainty, which is already impacting the forex. Nonetheless, based on what we have seen, we confirm our guidance as communicated in February. I will comment further at the end of this presentation. Let's look at sustainability. The sustainability services have made a strong contribution to growth, with major contracts signed across the four pillars of impact now: climate, circularity, nature, and ESG assurance. For example, we see increased demand for sustainability coming from the textile industry. Bluesign, as an example, it's an SGS company, has been pioneering sustainability in textiles since 2000 and was one of the first companies in the world to implement comprehensive phase-out programs targeting forever chemicals, including PFAS. We are proud of our positioning at the forefront of sustainability services, which will continue to be a powerful value driver for SGS in the years to come. Digital trust also contributed significantly to growth in the first quarter, especially through advancements in artificial intelligence and cybersecurity services. We are proud to have issued the world's first AI management certificate for customer airport services to Changi Airport in Singapore. This marks a major milestone demonstrating that artificial intelligence users can and must proactively manage safety, security, and ethical risks. Additionally, all European Brightsight Labs have successfully obtained the accreditation for cybersecurity certification at the highest assurance level. This achievement reinforces Brightsight position as the best option when it comes to connecting cybersecurity regulations across Europe, North America, and Asia. Finally, in Q1, SGS officially took over the responsibility for global management and independent certification of the digital trust label from the Swiss Digital Initiative. The label has already gained significant traction with adoption by leading organizations, including Swiss Re and Cisco. We are committed to scaling this Swiss innovation internationally. Let's now look at another key value driver of Strategy 2027, mergers and acquisitions. Here you can see on the map that so far in 2025, we have signed the acquisition of eight additional great companies to accelerate growth and profitability in attractive markets, especially in North America and in Europe. As with all of our investments, we apply strong financial discipline with criteria on growth potential, profitability, and of course, payback. Now on this slide, you can see the growth split across all end markets or business lines. I will go into the detail of each one of them. Let's start with industries and environment. The solid organic sales growth of 5.1% in the first quarter was led by environment and safety. Environment continued to benefit from double-digit growth in PFAS testing, with particularly strong activity in North America and Asia-Pacific. Growth was partly offset by a soft start in routine testing. High single-digit growth in safety services was supported by increased demand for global safety solutions, particularly related to large industrial sites in the Americas and Asia-Pacific. Projects and advisory grew moderately as new wins in Eastern Europe, Middle East, and Africa were partly offset by the completion of certain projects in Latin America. Industrial testing benefited from high single-digit organic growth in construction materials, partly offset by the end of some low-margin contracts in non-destructive testing, which we have chosen not to renew. We continue to see growing demand in areas such as greenhouse gas emissions, verification and monitoring, energy transition, including low-carbon fuels. SGS continues to be committed and actively engaged in supporting clients in their sustainability journey. Let's now look at natural resources, which delivered resilient organic sales growth of 3.8%. Mid-single-digit organic growth in minerals was fueled by trade services and continued strong demand for critical raw materials and metals for battery testing, where we continue to invest. For instance, you have seen lately we have expanded by 20% the capacity of our battery testing laboratory in Georgia, US, to address rising demand for services related to light, electric, vehicles, and energy storage. Growth was partly offset by some project delays in North America. Oil and gas and chemicals grew moderately on the back of lower trading volumes related to current economic uncertainties. Agriculture was stable as recovery in agriculture input solutions was offset by softness in trade services due to the poorer crop season in Europe. Let's move to connectivity and products. Connectivity and product delivered strong organic sales growth of 6.9% in Q1. Connectivity delivered very strong organic growth with increasing activity in technology security, including functional safety testing, where SGS offers a comprehensive suite of services, particularly for industries where risk reduction and compliance are critical, such as automotive and semiconductors. Recently acquired businesses in North America also delivered a strong performance. High single-digit organic growth in Softline was driven by strong demand for sustainability services, fueled by regulatory requirements and voluntary corporate actions in response to rising consumers' expectations. Finally, Hard lines delivered high single-digit organic growth, supported by strong demand from automotive and home improvement retailers, and double-digit growth in Eastern Europe, Middle East, Africa, Latin America, and Asia-Pacific. Let's now look at health and nutrition, which delivered excellent double-digit growth of 10.4%, driven by all segments. Food continued to grow organically at double digits, supported by emerging contaminants testing, advisory, and compliance. Pharma delivered high single-digit organic growth, driven by drug development and recovery in clinical research. Pharma will continue to be a key area of focus for SGS. We have over 40 years of experience as a global contract research organization and have built a strong reputation in delivering integrated services across a wide range of therapeutic products, including biologics, vaccines, small molecules, biosimilars, and advanced therapies. Cosmetics delivered excellent organic growth, supported by all regions and increased activity arising from growing consumer demand for safety and new regulation. Lastly, let's review business assurance. Certification delivered mid-single-digit organic growth, supported by medical devices and digital trust, which grew at double digits. Growth was partly offset by the fact that 2025 is a pause for certification year for the core certification business of quality, health, safety, and environment. ESG continued to grow organically at double digits, driven by non-financial reporting assurance and social audits, as well as GHG, or greenhouse gas emissions verification. Consulting remained soft, with several projects on top delayed in North America and in the supply chain management segment. With that, I will now hand over to Marta, who will present our Q1 sales. Thank you, Géraldine, and a very good morning to everyone. I'm pleased to report a record start to the year with sales of CHF 1.7 billion, which is an increase by 6.6% compared to the first quarter of 2024. First, the strong organic growth of 5.6% resulted in CHF 88 million of incremental sales, highlighting the resilience of our business. Second, the pace of bolt-on acquisitions accelerated, delivering 1.3% of growth, or CHF 21 million of additional sales. Third, during the first quarter, the Swiss franc appreciated only slightly, leading to a small negative translation impact of 0.3%, or CHF -5 million. Let's now see the sales breakdown by region. In the first quarter, our testing and inspection division expanded organically by 5.8%, while the business assurance division delivered 3.5% organic growth. In testing and inspection, the sales in Europe grew organically by 1.9%. Industrial testing was impacted by completion of low-margin contracts, while natural resources continued to suffer from the poor crop season. This was more than offset by high single-digit growth in pharma and cosmetics. Asia-Pacific expanded organically by 6.1%, with high single-digit growth in connectivity and products and health and nutrition, where food delivered a double-digit growth. North America sales increased by 3.9% organically, impacted by project delays in minerals and soft trading volumes in oil and gas. Eastern Europe, Middle East, and Africa grew organically by 10.4%, supported by all business lines. Latin America expanded by 15.7%, with double-digit growth in all business lines. Our Business Assurance global division delivered 3.5% organic growth. As already mentioned by Géraldine, the strong momentum in ESG, medical device, and food certification continued, while consulting remained soft. Let's now move and see more details on the successful scrip dividend take-up. As announced on the 17th of April, 63.3% of the dividend for the financial year 2024 was elected to be paid in the form of new SGS shares, with the remaining 36.7% to be paid in cash. This represents a clear endorsement of Strategy 2027 and allows SGS to reward the loyalty of its shareholders while redirecting close to CHF 400 million of cash towards the acceleration of Strategy 2027 execution. The delivery of the new shares and the payment of dividend is taking place today. With that, I hand it back to you, Géraldine. Thank you, Marta. Let's move on to the outlook. Currently, there is uncertainty on tariffs and on forex. However, we remain focused on executing Strategy 2027 in such an economic environment. We will take action to sustain our market leadership and profitability in light of these uncertainties. Our business is very resilient. We are confident in our ability to deliver the guidance as planned, an organic growth between 5%-7%, 1%-2% bolt-on contribution to sales growth, an improvement of the adjusted operating income margin by at least 30 basis points in reported terms, in CHF, and a strong free cash flow generation. With this, I will now hand over to Valentina for the Q&A. We will now begin the question and answer session. You can register for questions at any time by clicking on the Q&A button in the webcast and then pressing star one on the virtual keypad. If you're joining by phone, just press star one. Please limit yourself to a maximum of two questions per person. One moment, please, for the first question. The first question comes from the line of Daniel Bürki from Zürcher Kantonalbank. Please go ahead. Yeah, good morning, everyone. Two questions from me. First, which was the growth trend in the first quarter? Did you see some development there? Maybe which would be the moving parts for the second one? A second question regarding currency impact on profitability since we had strong improvement of the Swiss franc in the last few weeks. If you could give us some flavor, what could it mean as it stands now? Thank you very much. Thank you, Daniel, and good morning. Look, with regard to the currency, it's true that since April, the currency has been quite volatile. When the Swiss francs appreciate that strongly, it has an adverse impact on our margins. We feel fully confident to offset this negative impact and deliver on our guidance. We have taken a lot of initiatives, and we continue. We are fully on track on delivering on our restructuring and the cost-saving plan, even a bit in advance, and we'll take additional measures if need be. We don't see that as an issue as far as our margins are concerned. You know that we report the margins in reported terms, in Swiss francs, so that includes any adverse impact that we may face on the forex. On the growth trend, I would say that we have a slow start on industrial and environmental that we see developing better as we go through H2. Also the same for agriculture. Agriculture, natural resources has been flat in Q1. As we go towards H2, we also expect improvement there. That leaves us fully confident to deliver on our promises for the year. Thank you very much. Thank you. Next question. The next question comes from Sylvia Barker from J.P. Morgan. Please go ahead. Hi, good morning. A couple from me as well, please. Both on connectivity and products. Maybe just on connectivity, you said an acceleration. Could you maybe just talk a bit more about the rate of growth there and how that's developed over the quarter? Within Hardlines, you mentioned automotive specifically having strong demand. What regions and what kinds of clients and products is that related to? Thank you. Okay. On C&P connectivity, this is effectively a fast-growing segment of our C&P division. This is why we have done so many bolt-on acquisitions in North America last year. This is growing fast, about 7% for the quarter, and last year was the same. This is something that we continue to see and invest in, whether externally or organically. You had a question on Hardlines. On the Hardlines, on the automotive clients' products, we do a lot also around cyber when it comes to automotive C&P testing. This is also a very strong demand that we see, high single digit. This is mainly, I would say, with Asia-Pacific as we go. It is really Asia-Pacific and Internet of Things, cyber. The cars are a computer now, so that is the testing we do around that. There is a strong demand in Asia. We see a rather slower demand when it comes to Europe on that part of testing. Okay, thank you. You're welcome. The next question comes from Annelies Vermeulen from Morgan Stanley. Please go ahead. Hi, good morning, Géraldine. Good morning, Marta. Two questions as well, please. Firstly, you've talked about continuing to see strong demand for sustainability services. Through the last full year reporting season, we've seen obviously more companies stepping away from decarbonization, net zero, ESG targets. How do I reconcile that with the strong demand that you're seeing? Is it that you're not exposed to those customers in those segments, or do you see any risk to that from the pulling away of those targets? Secondly, just on consumer and personal care within health and nutrition, you've talked about excellent growth in all regions. I think the picture that we've seen from some of the players in that space, L'Oréal, etc., are talking about weaker U.S. consumer, declining U.S. sentiment. Are you seeing that at all in the U.S. business? Thank you. Okay. All right. On the health and nutrition, Marta, do you want to comment a bit on the growth that we've seen in the US? What would you be testing? Yeah, okay. In the health and nutrition, what we see and believe is that everything—and that's also valid for sustainability services in a way—is that everything that touches the offering around sustainability that touches the health of people is responding to very, very strong demand. People, again, are caring about the quality of the water, the drink, the food they eat, the clothes they wear. These sustainability services that we are providing are effectively responding to this very strong demand that the brands have to answer because their clients are asking for that. You think about the safety in cosmetics. This is the same thing. There is more and more demand around safety of the cosmetic products. That is the consumer pressure that, independently from regulations, which are, by the way, not fading away when it comes to health and nutrition, on the contrary, are fueling the demand for sustainability. That is fueling our growth. Is that all right, Annie? Maybe on the second question. Yeah, sorry, go on. Yeah, on the second question regarding the strength of consumer testing in the U.S., given the recent comments from L'Oréal, for example, for soft demand, what we see is we are very much involved in the R&D phase of those products. It remains strong. That growth driver coming from the continuous innovation that is required in the consumer product remains strong in Q1, and we have so far a strong pipeline. We have double-digit growth in North America when it comes to C&P and connectivity in particular. Yeah, connectivity and products, yes. Perfect. That's very helpful. Just a follow-up on the first one. These kind of customers and companies moving away from decarbonization, etc., I suppose that's more relevant perhaps for things like your renewables business, but it doesn't sound like you're seeing any pullback of demand there either. No, because frankly, the regulatory policies, most of them are still in place. You do not see really a lot of companies that want to exit, even if there is less pressure in some areas of the world. We are still having a strong demand for all our services. Okay, perfect. Thank you very much. Next question. The next question comes from Rory McKenzie from UBS. Please go ahead. Good morning. It's Rory here. Two questions, please. Firstly, for connectivity and products, can you talk about how your clients have been reacting to the tariff announcements and uncertainty so far? I appreciate the Q1 was, of course, all before the 2nd of April announcements in the U.S., but there's been lots of volatility, and supply chain costs are increasing for lots of your customers. Anything you could say about their behavior so far would be very helpful. Secondly, on business assurance, can you update us on the strategy to restructure or reposition the consulting business, and what changes you've started to bring in place so far this year? Thank you. Thank you, Rory. I'll start with the tariff, your first question. The implementation of trade tariffs will impact the flow of products over the world. It's clear that if you have a very high tariff for trade from China to the US, that may lead to switches towards countries with lower tariffs, which may become more competitive than to export to the US. That's something that we are following very closely. I think it is really too early to speculate on how these impacts are going to happen for our customers. I think that is a bit too early. The only response is to work with customers, to be close to them, to work on their strategies. We see a lot of potential as they are exploring moves of their supply chain to other countries. Why? Because SGS has the most global network in the world, and whatever country they choose, we're there. If they onshore, we're there. If they change from another Southeast Asian country with more favorable tariffs, we're there. If it's Latin America, we're there. That is, for us, also a source of opportunities, actually. Again, my response to your question is we're focused on our customer. We react even faster to any evolution of their needs, and we're, in parallel, working also on our costs, but you know that we do that anyway. That's about tariffs. On business assurance, yes, there is a fixing of the consulting business ongoing, notably the main point, actually, which is the biggest part or the main part of the business assurance. It's only 10% of business assurance consulting. Just to put things in perspective, I want to remind you that. There have been delays, which has not helped us, for sure, but these are delays. They're not cancellations. We are actually expecting to have a better flow of business when it comes to our consulting business in H2, and we will have, obviously, also less TAF comparables as we go on in the year. Okay, thank you. You're welcome. Next question. The next question comes from Remo Rosenau from Helvetische Bank. Please go ahead. Yes, good morning. Thank you. I would like to come back again on the quite clearly confirmed outlook despite tariffs and forks. You mentioned it today, and you mentioned it also in the press release that you will take action to sustain market leadership and profitability in light of these volatilities in trade tariffs. This sounds like there might be even additional measures above and beyond the ones you have already communicated in connection with Strategy 2027 and so forth and so on. What could come on top of that in order to counter all these issues at the moment? Yes, good morning, Remo. Look, I think it's just clear that when we see what's happened so far since the beginning of the month of April, there are two things, right? There is the trade tariffs. Here, as I said, any disruption that it would create in the supply chain of some of our clients, as I said, we will follow, and we are the best placed to take advantage of that. There is the forex. The forex could lead to an adverse impact on our margins, and we will be able to more than offset that as we are going to generate more efficiencies and look closer at our savings plan and accelerate the execution and add some more if necessary. Did that also entail some additional extra costs? No, not as we see today, no. No, no, no. It's just an acceleration of what is being planned and generating more efficiencies. That's all. Great. Second question. Looking at the pace of your M&A strategy, are the 1-2% additional contribution on sales growth via bolt-on acquisitions, might that not be a bit low looking at the pace you show? Let's just continue. You see that the relaunch has been quite effective, and we are becoming more and more active to effectively look at what makes sense, what we consolidate, what synergies we can bring. All bolt-on, all acquisitions we do, Remo, are accretive on our growth, organic growth, and on our profitability. More and more of that is needed, obviously, and we'll continue on that path. For the moment, we want to keep the 1-2%, but if we can do more, we'll do more. Okay, great. My last question. The planned move to Zug, what is actually the timing there, and what might the implication be on the tax rate looking forward? Look, the move is planned for the end of this year to Zug, and yeah, we do expect some favorable impact on our tax rate going forward, but it's too early to give you guidance on that. Be a bit patient. Okay. Good. Thank you, Géraldine. You're welcome, Remo. Next question. The next question comes from Neil Tyler from Redburn Atlantic. Please go ahead. Thank you. Good morning. Two questions, please. Firstly, back to the topic of M&A, how are you thinking about the sort of broader context of your U.S. growth ambitions and M&A in the context of, obviously, the less certain policy and economic outlook, and have the recent events altered the availability of assets to an extent that you've been able to see so far? That's the first question. Second, on industries and environment, I just wondered whether you've got any sort of insight into the sort of project and work backlog that relates to the more traditional energy-related inspection work and how that's developed over the last couple of months, please. Thank you. Yes. Good morning, Neil. I will start with M&A, your question on M&A, and then I will continue on your question about the work backlog on industry and environment. To me, in this broader context, as you said, it is still very pertinent, obviously, to invest in North America, and we will do that. There is a strong demand in North America for the end market that we have elected, which is pharma, cosmetics, connectivity, and we continue to invest organically and by acquisitions in these end markets. That is the first economy in the world, and it will continue, and this is a key market for us. The Strategy 2027 from that angle is fully relevant, and we do see strong demand to continue for our services, obviously, in North America in the areas I mentioned. Okay, then for industry and environment, look, there is a lot of new energy infrastructure ongoing. We do see that there's going to be a good backlog of inspection with regards to all the new energy infrastructure that is in preparation and that we see going on in the Middle East, in Asia, but also actually in North America w e see that. That's great. Thank you very much. You're welcome. Next question. The next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my questions. Just a couple from me, please. In natural resources, you had indicated that there were some project delays in North America. Was that reflecting the macro uncertainty, and do you still feel that these projects will come back in the second half of the year? Secondly, if we think about margin expansion for this year, I appreciate your full guidance of at least 30 basis points improvement, but when we have to think about phasing of margin expansion first half and second half, is it fair to assume that the first half will see more margin expansion year over year versus second half? Thank you. Thank you. Look, on your first comment, you know that we had cold weather, very bad weather in North America at the beginning of the year, and that has slowed down, ultimately, a lot of the mining projects in Canada and Q1 due to the weather. That explains, and I think that answers your question with regard to natural resources. On the margins expansion, yes, we have guided 30 basis points for the year, and I always said everything that we do more would be reinvested so as to build for the growth also of the years to come. Remember, we are in reported terms. We are the only company in this sector guiding in reported terms when it comes to our margins, so you will appreciate that 30 basis points is a good margin expansion in full CHF for 2025. I don't think the trend or the phasing is that relevant at the end of the day, so I would keep it on a full year basis, Suhasini. Thank you. Okay. Okay. Thank you. Next question. The next question comes from Arnaud Palliez from CIC Market Solutions. Please go ahead. Yes, good morning. Thank you for taking my questions. The first one is regarding M&A, but this time on the disposal side. I would like to know if you have fully completed the review of your different assets, or can we still expect some non-core assets to be disposed? From your previous answer, I understand that consulting is still considered as a core business, but can you confirm? My second question is regarding Europe and the coming increase in defense budget. I would like to know if you have some kind of exposure to this sector and maybe through cybersecurity. Can you give us a bit more details about your kind of exposure to the defense sector? Thank you. Okay. Thank you, Arnaud. Thank you very much. On the non-core assets, there might be some other small divestments along the way that we effectively do in the years to come in order to continue to streamline the group, de-risk the group, and obviously optimize the portfolio. That is possible, but that will not be significant divestments, I would say. The divestment we have just done, the non-core, that represents about CHF 20 million of revenue on a full year basis, so it is not significant. Yeah, it is not significant. The consulting, you mentioned, is the consulting core or not core? It depends. Consulting is very large, so obviously, what we need is to have synergies, cross-selling when we invest in a consulting business. Everything that cannot bring that, ultimately, would be considered as non-core, yes. When it comes to your last questions around Europe, defense budget, look, all defense and supporting industries are a true opportunity, and we're weighing it, and there is room to grow. You're right on the cyber. It's already an area where we are delivering some services, but I think there's much more we could potentially do, yeah. Next question. Thank you. Thank you, Arnaud. The last question for today's call comes from Arthur Truslove from Citi. Please go ahead. Good morning, everyone. Thank you very much for taking my questions. First question was, I just wondered, you obviously talk a bit about contract pruning you've done in Industries and Environment. I just wondered how much organic growth that cost you and what your organic growth might have been had you not done that. Second question, obviously, another company that does food and sort of biopharma type testing reported yesterday much slower growth than what you guys have managed to produce. I guess, and obviously, the market, particularly on the pharma side, seems to have been quite depressed, so I just wondered if you could expand on how you've done so well there. Third question, as of current FX rates, how significant is the margin headwind for the full year? Thank you. Thank you. Look, I will let Marta answer your first question about the non-destructive testing contract that we have left apart to give you an idea of what it represents in terms of growth. It does, in fact, for our organic growth. Yeah, higher now. It's higher, Arthur, sorry. It's around 0.5% of growth. Yeah, absolutely. Maybe before coming to the food and pharma, on margins, yes, as I said, it's not new. We are reporting in Swiss francs. Nothing new there, and it has an adverse impact on our margins as the margins are done in other currencies than the Swissie. We are fully equipped to offset that adverse impact, and let's not speculate on how much it's going to be because Forex is quite volatile, as I said. I think what is important is that we will deliver upon all guidance in reported terms and will improve our margins in Swiss francs. You mentioned about food and pharma. I think that the key here is to be close to clients, and we do have a strong level of trust from our clients in this segment. This is valid for Europe. This is valid for North America and globally, and that is our main asset. I do not comment on my competitors. I just would say that we have done an excellent job and will continue. Brilliant. Thank you very much. You're welcome. Thank you, Arthur. That was the last question. With this, I'm going to conclude that we have delivered, as you know, a very strong Q1 thanks to the continued fast execution of Strategy 2027. I am very proud of our strong performance in sustainability and digital trust and of our eight successful bolt-on acquisitions, which accelerates both our growth and profitability. We remain focused, and we have a customer-focused team on the technical, on the commercial, and with all the passion we have, I am fully convinced that we're going to execute Strategy 2027 at full speed and that we have a very exciting future ahead. Thank you for participating and listening. It is in, gentlemen. The conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines.