By John Revill
ZURICH (Reuters) – Swiss testing company SGS wants to step up its acquisitions drive, Chief Executive Geraldine Picaud said on Tuesday, and would consider larger deals despite ending talks over a multi-billion merger with French rival Bureau Veritas.
Geneva-based SGS has already bought three companies in 2025 after buying 11 in 2024 in a sector it says is ripe for consolidaton.
Testing, inspection and certification companies (TIC) are in demand because of the rise in interest around topics such as sustainability and a desire to ensure the quality of components throughout supply chains.
Picaud said she would like to make at least one acquisition per month during 2025, with SGS acting as consolidator in the $160 billion global TIC sector.
No company has a market share of more than 5% in the industry where scale was important, she said.
“I do believe there will be some consolidation. It is a very fragmented industry,” said Picaud after SGS reported its annual results, adding SGS would consider small, medium or large deals.
SGS last month abandoned merger talks with Bureau Veritas that would have created a company with a combined market value of around $30 billion.
“The combination had strong merits. We tried to make it work, but we could not quite get there in the end,” Picaud said, declining to give further details.
SGS on Tuesday reported annual sales rising 2.6% to 6.79 billion Swiss francs ($7.45 billion) matching analyst forecasts. Without currency and acquisition effects, the increase was 7.5%.
Adjusted operating income increased by 7.1% to 1.04 billion francs, slightly above the 1.02 billion francs forecast.
Its shares gained 5% in early trading.
Picaud said SGS would continue to benefit from trends such as reshoring of factories, concerns about PFAS – so-called “forever plastics” in products – food standards and artificial intelligence, where SGS checks chips for spyware.
“The push on AI reinforces the need for cyber-security,” Picaud said. “People want to know what they eat, where it comes from.”
($1 = 0.9116 Swiss francs)
(Reporting by John Revill, Editing by Friederike Heine and Barbara Lewis)
