SGS reduced Middle East workforce to protect margins, CEO says (updated)
24/07/2026 08:15
(Writes through, adding CEO comments from press call in
paragraphs 1-7, analyst comment in paragraph 9.)
* H1 revenue rose to CHF 3.68 billion, above consensus of
CHF 3.64 billion
* SGS confirmed its full-year outlook
* It cut workforce in the Middle East as war reduced
business volumes
By Paolo Laudani and Orest Dovhan
July 24 (Reuters) - Swiss testing and inspection group SGS
SGSN.S has cut its workforce in the Middle East to shield
margins from war-related disruptions, CEO Geraldine Picaud told
reporters on Friday.
The group, which offers testing solutions for 5G and food
labels among others, reaffirmed its outlook for the full year
after its revenue rose slightly more than expected in the first
half of 2026.
"We had to reduce costs drastically in the Middle East ...
because it's important for us to protect our margins," Picaud
said during the post-earnings call.
"In the Middle East, we have less business because of what's
going on. So you need to address the cost," she added.
SGS's half-year sales grew 5.6% organically to 3.68 billion
Swiss francs ($4.50 billion), but Picaud said that without the
crisis in the Middle East, growth would have exceeded 6%.
The figure was still above a consensus of 3.64 billion
francs in an LSEG poll of analysts.
Picaud said SGS was seeking opportunities from new sectors
such as aerospace and defence in regions like Europe and North
America to offset this impact.
The group, which has acquired 14 companies this year,
including six in the U.S., is continuing to carry out its
strategy of buying companies to expand its business. It aims to
double its North America revenue to $1.5 billion by 2027,
compared with last year.
"Against the backdrop of the crisis in the Middle East and
slowing global trade growth, the momentum within the TIC
(testing, inspection and certification) sector and specifically
for industry leader SGS is impressive," analysts at Zuercher
Kantonalbank said in a note.
The Asia Pacific region saw the highest growth, rising 9.9%
organically from a year ago.
($1 = 0.8169 Swiss francs)
(Reporting by Paolo Laudani and Orest Dovhan in Gdansk, editing
by Milla Nissi-Prussak)
((mailto:Paolo.Laudani@thomsonreuters.com;))