When you need to be sure Soil Collection and Analysis, Portugal 2024 Integrated Report 1. Refer to alternative performance measures of this report. 2. See Glossary on page 188. Sales CHF 6 794M +7.5% organic growth Earnings per share CHF 3.10 +3.3% vs. 2023 Adjusted operating income margin on sales 15.3% +60 basis points vs. 2023 Free cash flow CHF 748M +23.8% vs. 2023 Diversity, equity and inclusion 32% of women in leadership positions, on track towards our 2027 target of 33.3% Responsible business 91% customer satisfaction score, on track towards our 2027 target of 93% 2024 Non-financial KPIs2 Education 7.4M hours delivered to employees, customers and communities, +3% vs. 2023 Excellent 2024 results We have delivered on our promises and swiftly executed our Strategy 27: Accelerating growth, building trust. We have sharply accelerated our organic sales growth, relaunched our M&A activity, and enhanced profitability, setting a new upward trajectory for our margins. Additionally, we have achieved an outstanding cash conversion, strengthening our financial profile. 2024 Financial KPIs1 Environmental leadership -2.2% scope 3 emission reduction vs. 2023 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Who we are What we do Our societal impact We operate in the Testing, Inspection and Certification (TIC) industry and provide quality and safety control services: Testing products ensures they meet health, safety and regulatory standards. Inspection controls quantity and quality to help our customers meet regulatory requirements. Certification provides assurance that products, processes, systems or services meet standards and regulations. SGS brings together global teams of highly qualified experts specialized in testing, inspection and certification solutions across nearly every industry. Our activities build trust and make a positive contribution to the communities in which we operate. We support you, our stakeholders, when you need to be sure. How we create value Strategy 27: Accelerating growth, building trust In this report Top image: Contaminants Detection in Soil Samples, USA Bottom image: Solar Panel Inspection, Turkey Management report 1 Corporate governance 30 Remuneration report 52 Financial statements 80 Non-financial statements 152 p8 p18 Watch our videos and learn more about our 2024 results at https://www.sgs.com/en/integrated-report 1 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Focus on IMPACT NOW for sustainability With new regulations mandating ESG disclosures and a growing emphasis on sustainable processes and products, IMPACT NOW for sustainability provides a comprehensive platform where businesses can find the tailored solutions they need to enhance sustainability and meet compliance requirements. Find out more www.sgs.com/en/our-services/ impact-now-for-sustainability Climate Clarify and accomplish your climate goals with SGS support. Circularity Embrace a circular economy to eliminate waste and protect the planet with SGS expertise. ESG Assurance Achieve your environmental, social and governance goals with SGS ESG expertise. Nature Protect and encourage the lands and seas to flourish with SGS solutions. 2 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Letter to stakeholders This year, SGS was ranked as the sixth most sustainable company by TIME, included in the Dow Jones Sustainability Index World and Europe and ranked first in the TIC industry in the S&P Corporate Sustainability Assessment. We also released our Net-Zero Transition Plan, reinforcing our pledge to achieve net-zero emissions by 2050. These milestones reflect our dedication to leading by example and delivering value, both to our shareholders and society. Shaping the future The Board of Directors has been instrumental in driving our progress and ensuring alignment with Strategy 27. Key management changes have been implemented under the leadership of our new CEO Géraldine Picaud to spur further growth, contributing to an increase in the value of the company. Succession planning remains a priority, ensuring that we have the right leadership in place for future success. Additionally, our Audit and Sustainability Committees have been actively overseeing initiatives to reinforce our commitment to transparency, accountability and responsibility. Recognizing our people Our employees are the bedrock of SGS. Their dedication and expertise drive our success and enable us to deliver high-quality services. Amid ongoing changes, I want to acknowledge their hard work and resilience. As we stabilize and move forward, we remain committed to fostering a supportive and innovative work environment that empowers our teams to thrive. Looking ahead While there is still work to be done, we are on a solid path to growth. Our margins are improving, cash flow is strengthening, and we are well positioned to deliver a favorable dividend. I am confident that our continued focus on resilience, innovation and ESG leadership will ensure sustained success. Finally, I would like to express my sincere gratitude to our employees, the Board of Directors, shareholders and all stakeholders for their unwavering support. Together, guided by our promise, ‘when you need to be sure,’ we will continue to accelerate growth and build trust. Through resilience and growth, SGS continues to be the point of reference when you need to be sure. This year has been marked by both challenges and opportunities, yet SGS has consistently demonstrated resilience, adaptability and integrity. Our ability to pivot in response to evolving market conditions and regulatory landscapes ensures that we remain at the forefront of the testing, inspection and certification (TIC) industry. By aligning Strategy 27 with key megatrends such as sustainability, digital transformation and supply chain evolution, we are uniquely positioned to support our clients and communities. Harnessing megatrends to drive progress The world is undergoing rapid changes, and SGS is embracing these transitions with confidence. To ensure that we remain a reference point as the world evolves, we are advancing the sustainability agenda through innovative services that help our clients navigate complex regulations, such as the EU Corporate Sustainability Reporting Directive (CSRD) and the management of persistent chemicals. In digital transformation, our pioneering industry firsts include AI- driven cybersecurity evaluations and the implementation of drone delivery services, exemplifying our commitment to innovation and efficiency. Furthermore, our robust global network and focus on nearshoring allows us to swiftly adapt to supply chain shifts, providing our clients with the agility they need. Embracing innovation and operational excellence The present business environment is ripe with opportunities, particularly in harnessing technological advancements. Our lab services lie at the heart of SGS, and we continue to invest in robotization and AI to boost productivity, efficiency and agility. These innovations not only enhance our operational capabilities but also empower us to meet the evolving needs of our clients quickly and effectively. Commitment to ESG leadership As a cornerstone of our strategy, we are committed to a strong focus on corporate sustainability. Calvin Grieder Chair of the Board of Directors Building a stronger future 3 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Execution mode: on track to deliver Strategy 27 We are fully engaged in executing Strategy 27. With our energized teams operating in full alignment, we are on track to deliver the strategy’s objectives and maximize the value we offer to all stakeholders. Our achievements already mark an outstanding start: 1. Growth Growth is our priority. To achieve our targets, we have been actively expanding our portfolio and geographic reach, integrating innovation into our services and relaunching our M&A activities with a disciplined approach. This year alone, we have completed 11 acquisitions across high-potential segments, adding a total annual contribution of over CHF 71 million to our revenue base. By focusing on bolt-on acquisitions with clear strategic fit, we enhance our capabilities while maintaining the agility that SGS is known for. Our growth efforts are driven by critical areas such as sustainability and digital trust. SGS is at the forefront of sustainability services, with new offerings under our IMPACT NOW for Sustainability, which provides tailored solutions for climate, nature, circularity and ESG assurance. The demand for our sustainability services is growing rapidly, and we anticipate generating CHF 600 million in incremental sales by 2027 from sustainability services. Digital trust represents another vital growth area, with SGS emerging as a global leader in high-assurance cybersecurity and AI certification. Our team of over 500 experts operates from 10 accredited cyberlabs worldwide, supporting our clients in safeguarding critical infrastructure and advancing in AI and post-quantum cryptography standards. We expect digital trust services to contribute CHF 200 million in additional revenue by 2027. Building on our strong legacy and trusted brand, SGS is bringing Strategy 27 to life, unlocking a prosperous and sustainable future. Looking back on my first year as CEO, I am proud of the remarkable strengths that SGS brings to the table. As a global leader with a 145-year legacy, SGS remains resilient, leveraging our extensive network, scientific expertise and proven adaptability. Our operations span 2,500 laboratories and operating facilities across 115 countries, making us a truly global partner. Our broad reach, combined with our scientific knowledge, enables us to operate effectively even in uncertain economic climates. The testing, inspection, and certification (TIC) industry, characterized by its stability and scope, affords SGS a level of resilience that is invaluable. As a result, we are more than prepared to navigate complex economic conditions – we are strategically positioned to thrive within them. Strategy 27: Accelerating growth, building trust In 2024, we launched our ambitious Strategy 27 to accelerate growth, enhance our performance and agility, and strengthen our financial profile. These drivers enable SGS to harness key industry megatrends, including digital transformation, the sustainability transition, supply chain migration and the evolving regulatory landscape, positioning us at the forefront of the TIC industry. Our strategy includes reinforcing our role in high-growth regions such as North America, where we aim to double sales by 2027, and expanding further across Europe and Asia Pacific. These efforts, coupled with strong pricing power and the industry’s largest portfolio of accreditations, make us well equipped to meet our clients’ evolving needs and support them through nearshoring, supply chain adaptations and sustainability imperatives. Géraldine Picaud Chief Executive Officer Delivering Strategy 27 at full speed Letter from CEO, Géraldine Picaud 4 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information SGS | 2024 Integrated Report 2. People, performance and agility Our people are the foundation of our success and we are dedicated to fostering a performance-driven and accountable culture. Our new organization has introduced a more agile management structure, enhancing both efficiency and local decision-making capabilities. This year, we launched a new incentive program aligned with our group-wide financial targets and reinforced our commitment to talent development and empowerment. To enhance our agility and responsiveness, we have implemented a CHF 150 million cost-saving program focused on streamlining operations, optimizing procurement and reducing overlaps. As of 2024, we have already achieved CHF 50 million in cost savings and expect to reach the new run rate by the end of 2025. This initiative improves our operational efficiency, while reinforcing our capacity to deliver sustained value to our clients and shareholders. 3. Strong financial and ESG profile Our financial strength underpins our ability to pursue Strategy 27 confidently. With projected organic growth of 5-7% annually and an additional 1-2% annual growth from bolt-on acquisitions, we are on a path to deliver sustainable, mid- to high- single digit growth. In line with our capital allocation principles, we are committed to disciplined capex spending, bolt-on acquisitions and robust free cash flow generation. By 2027, we aim to exceed 50% cash conversion and to achieve an improvement in adjusted operating income margin of at least 150 basis points. Equally important is our long-term commitment to ESG. Our corporate sustainability targets by 2027 include material progress towards a 28% reduction in Scope 3 emissions. Furthermore, we are advancing diversity, equity and inclusion by ensuring that women hold at least one-third of leadership positions by 2027. We are honored to be recognized for our efforts, and were ranked the 6th Most Sustainable Company in the World by TIME. Moving forward Looking ahead, we are committed to reaching our Strategy 27 ambitions and fulfilling our purpose as a trusted partner for clients worldwide. We will continue to pursue growth, strengthen our position in high-potential markets, and maintain a focus on sustainability and digital transformation. The strength of the SGS brand remains one of our greatest assets. With our trusted brand promise, “When you need to be sure,” we continue to build on our reputation for quality, reliability and innovation. As the world faces increasing challenges in areas such as environmental sustainability, digital security and food safety, SGS stands ready to provide the solutions that make a difference. A heartfelt thank you None of this would be possible without the dedication, hard work and commitment of our 99,500 employees worldwide. Your collective efforts are driving our success, and I am deeply grateful for your unwavering commitment. As part of the SGS family, we are all united by a shared purpose to bring quality, safety, security, progress and trust for the good of people and the planet. As we look to the future, I am confident that SGS is well-positioned to capture new opportunities and deliver on our ambitious goals. With the passion, expertise and resilience of our people, I have no doubt that we will achieve our vision. Thank you for your continued trust and support. Clinical and Biomedical Testing, Belgium 5 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2 4 6 8 10 12 13 1 3 5 7 9 11 Malcolm Reid Head of Europe Steven Du Head of Asia Pacific Jeffrey McDonald Head of Business Assurance Derick Govender Head of North America 1 5 9 13 Rafael Navazo Head of Latin America Charles Ly Wa Hoi Head of Connectivity & Products and Health & Nutrition James Roberts Chief People Officer 2 6 10 Teymur Abasov Head of Eastern Europe, Middle East & Africa Géraldine Picaud Chief Executive Officer Marta Vlatchkova Chief Financial Officer 3 7 11 David Plaza Chief Information Officer Martin Oesch Group General Counsel Egidijus Jokubauskas Head of Industries & Environment and Natural Resources 4 8 12 SGS Environmental Testing Laboratory, Dayton, USA Meet the leadership team 6 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information SGS | 2024 Integrated Report Local expertise delivered via a global network We offer the industry’s most extensive service portfolio and a truly global network, combining local expertise with global reach to deliver unparalleled support to our clients – wherever and whenever they need us. Eastern Europe, Middle East & Africa 12% of total sales 578 laboratories and business facilities 17 966 employees Latin America 9% of total sales 261 laboratories and business facilities 15 441 employees Asia Pacific 34% of total sales 550 laboratories and business facilities 38 554 employees Europe 33% of total sales 934 laboratories and business facilities 21 708 employees North America 12% of total sales 181 laboratories and business facilities 5 814 employees 7 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Four megatrends are driving regulation and outsourcing in the testing, inspection and certification industry, providing opportunities for growth, innovation and value creation. How we create value Megatrends Innovation in digital capabilities & new technologies Strong growth driven by digital trust needs and technological changes. Nearshoring of supply chains New opportunities from growing domestic demand and supply chain proximity. Increasing regulation & public awareness Structural expansion from tighter legislation and expectations for safety, health and well-being. Powerful sustainability transition Higher demand from environment, social and governance regulations and societal expectations. The testing, inspection and certification industry Industry characteristics Scale matters and TIC companies need a broad geographical footprint to match those of their customers Scale creates a virtuous circle and supports margins, especially for lab- based testing where high utilization and volumes drive the ability to invest in specialization, automation and technology to improve turnaround times. This in turn helps improve customer retention and acquisition Companies with scale and a global footprint can leverage their capabilities and expertise to bid for large multi-year contracts. As the network expands, the customer offer also increases, creating a virtuous circle Industry drivers The increasing complexity of the regulatory landscape is driving companies to search for specialized services delivered by the TIC industry Companies need reliable indicators provided by the TIC industry in the field of sustainability to avoid charges of ‘greenwashing’ Spending on testing is expected to increase due to country-specific regulations and requirements Geopolitical events and logistical challenges are forcing companies to assess their supply chains. Anything that brings about change, such as a new supply arrangement or change of supplier, will drive further testing and supply chain verification Societal benefits Consumers know the products and services they use are safer, consistently reliable and true to their advertised claims. This makes it easier for them to compare products and services Businesses benefit from enhanced demand from the trust and confidence that the use of TIC services generate in the marketplace. This enables market entry and market access with the assurance of higher levels of regulatory compliance Governments and policy makers benefit from increases in the volume of trade and an industry that can ensure compliance with regulatory requirements at a lower cost to the taxpayer The four megatrends of the TIC industry 8 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information SGS carefully tracks global trends to analyze and proactively identify emerging customer needs. Through innovation, SGS is enhancing the customer experience and driving service delivery to new levels. How we create value Innovation Creating value through innovation Digital trust In digital trust, we are at the forefront of new solutions: • We continued to deliver ISO/IEC 42001 Artificial Intelligence Management System certifications globally, with notable firsts in Europe and Asia. • Our cybersecurity brand Brightsight delivered the world’s first Common Criteria security evaluation for Post-Quantum Cryptography in collaboration with Samsung. • During a ceremony at the World Economic Forum 2025 in Davos, SGS formally received the Digital Trust Label from the Swiss Digital Initiative Foundation. Under SGS’s stewardship, the label will expand its global reach, serving as a recognized auditable standard for digital trust. AI-driven tools We continue to develop cutting-edge AI-driven tools to improve service levels: • We have implemented computer vision recognition solutions to cut turnaround times in our testing laboratories. This technology can perform analyses up to 20 times faster than traditional methods. • We developed a unique AI-driven digital microscope designed to comply with the latest revision of ISO 12156- 1, the standard for lubricity tests. This solution is more accurate and less expensive than other tools available on the market and has been successfully deployed in several laboratories in Europe and Africa. Technological advances We have made significant technological advances in non-destructive sample analysis: • In Australia, we automated portable X-ray fluorescence technology used to analyze the elemental composition of samples. This has increased the number of soil sample we can analyze to 50 000 a month. • We have adopted PhotonAssay technology across our network ensuring faster, eco-friendly testing, underscoring the Group’s commitment to sustainability. International firsts We launched a highly innovative drone transport service for dangerous goods samples, called Samplifly. The project, backed by the European Space Agency, provides a swift, safe and low-carbon alternative to carry samples by drones from client sites to SGS laboratories. This fully digitalized drone significantly improves turnaround times and reduces CO2 emissions by up to 80%. SGS developed the first fluorescent- activated cell sorting service for the biopharmaceutical industry in Germany. This groundbreaking solution supports the development of advanced therapeutic medicinal products and drives innovation in cell and gene therapy. Sample Transport Drone, Belgium 9 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Megatrends Resources and relationships Total people X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Number of highly trained experts X XXX X science, technology, engineering and math Number of operating sites X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Capex X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Energy consumption X XXX reduction in energy consumption driving lower carbon. Number of suppliers X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Our business principles Integrity Health & Safety Respect Testing Lab-based • Customer need – testing of compliance, quality and safety • Process – sampling and analysis • Outcome – test report, post-analysis review • Value – reduced risk, shorter time to market Inspection Lab-based and people-based • Customer need – inspection of quantity, quality and compliance • Process – physical or remote site inspection • Outcome – inspection report, post-analysis review • Value – meet regulatory requirements across different regions and markets Certification People-based • Customer need – certification to standard • Process – audit and technical review • Outcome – issuance of certification documents, ongoing surveillance • Value − ensures services, systems, process or products meet national or international standards Powerful sustainability transition Innovation in digital capabilities & new technologies Stakeholders Subcontractors Investors Suppliers Employees How we create value Business model Resources and relationships People 99 483 dedicated team members Network of experts >75% of workforce with high professional expertise Laboratories and business facilities 2 504 laboratories and business facilities Capex CHF 251M driving operational efficiencies and sustainable growth across network Energy consumption 97% renewable electricity Number of suppliers 45 470 trusted business partners around the world Megatrends Powerful sustainability transition Innovation in digital capabilities & new technologies Testing Lab-based • Customer need – testing of compliance, quality and safety • Process – sampling and analysis • Outcome – test report, post-analysis review • Value – reduced risk, shorter time to market Inspection Lab-based and people-based • Customer need – inspection of quantity, quality and compliance • Process – physical or remote site inspection • Outcome – inspection report, post-analysis review • Value – meet regulatory requirements across different regions and markets Certification People-based • Customer need – certification to standard • Process – audit and technical review • Outcome – issuance of certification documents, ongoing surveillance • Value − ensures services, systems, process or products meet national or international standards Our business principles Integrity Health & Safety Respect Stakeholders Subcontractors Investors Suppliers Employees 10 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Value created Sales growth XX% Organic growth Sales from sustainability and digital trust services X% of total sales Customer satisfaction X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Numbers of training hours X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Spend on goods and services X XXX Lorem sed lobortis erat sed lobortis vorem ipsum dolor sit Reduction in CO2 emissions X XXX Scope 1 and 2 emissions Quality & professionalism Sustainability Leadership • Gold standard solutions provider • 145 years history • Largest number of accreditation • Largest network for restricted substance testing • Unique global network to capture supply chain migration • Leading provider of digital trust services SGS is the point of reference Near-shoring of supply chains Increasing regulation & public awareness Society Customers Consumers Communities Nearshoring of supply chains Increasing regulation & public awareness • Gold standard solutions provider • 145 years of history • Largest number of accreditations • Largest network for restricted substance testing • Unique global network to capture supply chain migration • Leading provider of digital trust services SGS is the point of reference Value created in 2024 Sales growth 7.5% organic growth Sales from sustainability and digital trust services CHF 680M sales Customer satisfaction 91% ensuring an excellent quality of service Number of training hours 7.4M training delivered to employees, clients and communities Spend on goods and services CHF 2.2BN driving laboratory and operating facility enhancements Reduction in Scope 3 emissions -2.2% vs. 2023 Quality & Professionalism Sustainability Leadership Society Customers Consumers Communities 11 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information How we create value Business portfolio continued Our business portfolio is strategically crafted to harness the powerful momentum of today’s defining megatrends, driving growth and resilience in a rapidly evolving world. Testing and inspection UN Sustainable Development Goals impact1 Industries & Environment We empower organizations to enhance safety, sustainability and operational efficiency by ensuring the integrity and reliability of equipment and processes. As industries transition toward greener practices, our solutions help organizations create a more sustainable future. Natural Resources Our global network of trusted, independent experts provides essential services to the agricultural, mining, oil, gas and chemical sectors, enabling organizations to reduce risks, make informed decisions and advance sustainability goals across their supply chains. Connectivity & Products We are the experts who support brands, manufacturers, retailers and governments across the supply chain with the performance, safety, security and quality of their products and services. We help make products better and safer for an increasingly connected world. Health & Nutrition We assure quality, safety and sustainability in the health, wellness and nutrition industries, helping our customers to meet stringent standards throughout their supply chains and, ultimately, improving the quality of life in society. Certification Business Assurance We have the global expertise and knowledge, and the people, processes and tools to help organizations improve their results, manage risk, comply with regulatory changes, adopt best practice and meet increasingly stringent sustainability requirements. 1. Refer to www.undp.org/sustainable-development-goals. Read more www.sgs.com/en/integrated-report/business-performance 12 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information How we create value Business portfolio continued Industries & Environment / Testing and Inspection Leading the way in PFAS testing Long valued for their unique properties, per- and polyfluoroalkyl substances (PFAS) are a diverse group of chemicals, that are now recognized as persistent, toxic and harmful to human health. We continue to expand our PFAS testing, delivering solutions that help businesses meet regulatory requirements while protecting public health. Protecting consumers We supported a pivotal study in New Jersey measuring PFAS in water, soil and fish that contributed towards fish consumption advisories that protect at-risk consumers. Ensuring air quality We validated LC-MS/MS methods to analyze PFAS in waste incineration emissions in Germany by the European Chemicals Agency (ECHA). Case study Facilitating the sustainable energy transition through expert testing, inspection, certification and advisory services. Our Industries & Environment division drives the sustainable energy transition by offering comprehensive testing, inspection, certification and advisory services, including industrial assurance solutions. Supporting Strategy 27, we are driving sustainability, helping clients adapt to supply chain developments, meet environmental, social and governance (ESG) requirements and comply with evolving regulations. Our innovative services enable our clients to enhance worker and environmental safety, manage operational risks, improve efficiency and strengthen their reputations through decarbonization efforts. Contribution to overall revenue (%) 33% Industries & Environment PFAS Analysis, USA Industry Leader in PFAS testing Strongest growing regions • North America • Middle East • Latin America 13 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information How we create value Business portfolio continued Analyzing Geochemical Data, Australia Natural Resources / Testing and Inspection Driving innovation through automation in laboratory operations Across our laboratory network, efficiency and innovation go hand in hand. In Australia, automating the portable X-ray fluorescence (pXRF) process has transformed soil sample analysis, boosting monthly throughput while reducing manual tasks. Meanwhile, in Canada, our automated crushing system and robotic sample delivery have streamlined operations, freeing up valuable resources. Our adoption of PhotonAssay technology across geographies ensures faster, eco-friendly testing, underscoring our commitment to sustainability. These advancements enable our experts to focus on high-value services, strengthening our dedication to cutting- edge solutions. With every step in our digital transformation, we continue to set new benchmarks in productivity and sustainability. Case study 50 000 samples analyzed monthly with automated pXRF technology Enhancing resource sustainability, safety and productivity through innovative inspection, testing and consultancy services. Our Natural Resources division provides comprehensive testing, inspection and consulting services across minerals, energy, chemicals and agriculture sectors. In line with Strategy 27, we are focused on enhancing supply chain resilience, supporting informed trade decisions and compliance with sustainability goals. Leveraging advanced technologies like AI, blockchain and robotization, we support clients through laboratory outsourcing, commodities logistics, geochemistry, metallurgy, consulting and market intelligence. Our services help our clients reduce risk, enhance productivity, promote sustainable sourcing practices, and meet quality, safety and environmental standards. Contribution to overall revenue (%) 24% Natural Resources Strongest growing regions • North America • Latin America • Middle East 14 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information How we create value Business portfolio continued Analytical Testing for Contaminants and Additives, Turkey Connectivity & Products / Testing and Inspection Certifying trust and product excellence for Samsung OLED displays In the competitive B2B display module market, demonstrating product excellence without objective evaluation can risk greenwashing and lead to consumer confusion. To address this, we tested and awarded Samsung’s OLED laptop display panels with Hazardous Substances Assessed (HSA) certification under the SGS Environmental Claim Certification Scheme (commonly known as SGS green marks). We evaluated over 300 substances, including heavy metals, persistent organic pollutants and volatile organic compounds (VOCs), ensuring transparency and accountability. Our comprehensive evaluation alongside rigorous testing, conducted according to the Environmental Claim Certification Scheme (ECCS) requirements, enabled Samsung to highlight its commitment to environmental responsibility. By reducing greenwashing risks, SGS green marks empower consumers to make informed, sustainable choices, fostering trust and benefiting society. Case study +300 hazardous substances assessed under the SGS green mark Driving innovation, safety, performance and secure connectivity through comprehensive testing and certification services. Our Connectivity & Products division ensures safety, performance and regulatory compliance across automotive, electronics, cybersecurity, hard goods and softlines sectors in an increasingly digital, interconnected world. Aligned with Strategy 27, we aim to lead in cybersecurity and sustainable product development, leveraging 5G, IoT and AI technologies to drive innovation while maintaining consumer trust. Our end-to-end testing and certification solutions simplify regulatory challenges, minimize risks, and accelerate market entry for high-quality products that are safe, secure, sustainable and built to support a world where connectivity is ubiquitous. Contribution to overall revenue (%) 19% Connectivity & Products Strongest growing regions • Asia Pacific • North America • Eastern Europe, Middle East and Africa 15 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Strongest growing regions • Asia • Europe Health & Nutrition / Testing and Inspection Contribution to overall revenue (%) 13% Health & Nutrition Supporting the global demand for safe and high-quality food, healthcare and wellness products through comprehensive testing and research services. Our Health & Nutrition division offers advanced analytical testing and clinical research services to ensure the safety, quality and sustainability of consumables, healthcare and wellness products. Focused on Strategy 27, we aim to lead in food, cosmetics and health sciences by expanding our portfolio of innovative testing, microbiological analysis, and sustainability services. Our innovative solutions help clients to navigate complex regulations, accelerate product development, and strengthen consumer trust, ensuring their products meet stringent global standards for safety, authenticity and efficacy. Enhancing food safety through advanced contaminant analysis We are at the forefront of addressing food contamination challenges, particularly mineral oil hydrocarbons (MOSH/MOAH), which are under scrutiny due to potential health risks. With harmonized limits of quantification and new regulations expected in 2025, reliable testing methods are essential. To meet this demand, we utilize advanced two-dimensional chromatography (LC- GCxGC-TOF-MS-FID), providing precise quantification and confirmation of contaminants to ensure compliance with evolving standards. Every month, we ensure the safety of 1,500 food samples through rigorous testing. Our innovative methods not only protect consumers but also advance toxicological research and monitoring projects, fostering trust in global food supply chains. Case study How we create value Business portfolio continued 1 500 food samples analyzed monthly with the official LC-GC-FID method Mineral Oil Saturated Hydrocarbon Analysis, Germany 16 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Business Assurance / Certification Helping organizations thrive by minimizing risk and embedding sustainability into daily operations. Our Business Assurance division provides comprehensive certification and business enhancement solutions that help organizations comply with global standards, minimize risk and achieve sustainability targets. To reach our Strategy 27 goals, we are expanding our service portfolio – from digital trust (cybersecurity, privacy and AI) to end-to-end sustainability services, including carbon emissions measurement and ESG disclosures. Our world-leading solutions help clients to achieve, certify and confidently communicate their advancements in quality and sustainability, ensuring secure, resilient and responsible operations across industries – from food and manufacturing to cosmetics and electronics. Contribution to overall revenue (%) 11% Business Assurance Case study Driving workplace equity with EDGE Certification Organizations face challenges in achieving workplace diversity, equity and inclusion (DE&I). As an approved EDGE certification body, we offer globally recognized audits and certifications to help companies foster equitable workplace practices. By evaluating representation, pay equity, career flows and inclusiveness, we empower organizations to address biases and build inclusive cultures. At SGS, we pride ourselves on being a trusted partner along the DE&I journey. We provide clear, transparent guidance, making audit requirements easy to understand and implement. With a flexible, supportive approach, we work closely with you to achieve positive audit outcomes, helping to create more inclusive and equitable workplaces. How we create value Business portfolio continued Strongest growing regions • Asia Pacific • North America • Europe 40 EDGE certificates issued by SGS in 2024 Indoor Air Quality Inspection, China 17 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2024 January Introduction of new incentive scheme Driving our outstanding business performance. January Strategy 27 Targeting growth, people, performance and agility, and strong financial and ESG profile. March Géraldine Picaud appointed CEO Géraldine is appointed to the helm of SGS to carry out Strategy 27. Our year in review 2024 Executing Strategy 27 at full speed 18 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information December M&A relaunched Announcing 11 bolt- on acquisitions made during 2024. April Senior Leadership Meeting Ensuring strategic alignment, fostering collaboration, and driving the company’s vision and direction. July 6th most sustainable company in the world TIME recognizes SGS for its corporate sustainability performance. November IMPACT NOW for sustainability launched Supporting our customers to achieve their sustainability ambitions. November Capital Markets Event Providing key stakeholders with an in-depth understanding of Strategy 27 and our operational framework. 19 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information As a global market leader with a solid presence across all regions, we are well positioned to capitalize on significant opportunities. Strategy 27 will further accelerate our growth and strengthen our competitive edge worldwide. Accelerating growth We capture growth across the four market megatrends of sustainability transition, digital acceleration, supply chain migration, all on the back of a heavily regulated environment. Accountability, performance and cash flow culture New organization Corporate simplification Sustainability transition Digital acceleration Portfolio focus Financial targets Capital allocation Corporate sustainability targets Our key levers Building trust We have a unique network of highly qualified professionals. It is key that the Group put its people in the best mindset and in the right organization to allow them to succeed. We promote performance and accountability across the group. Strengthening our financial profile We have established value creating drivers focused on delivering attractive shareholder returns. Strong financial and ESG profile People, performance and agility Growth 20 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Delivering a broad range of services associated with sustainability, organized around four major pillars to address client demand. 115 countries in SGS network, with on-site expertise and extensive knowledge of clients’ global value chains Global leader in key segments including GHG emissions, forestry certification and more SIX Swiss Exchange SGS approved as official expert reviewer for its ‘1.5°C Climate Equity’ flag Scientific expertise embedded in SGS culture, setting standards and recognized by clients Early mover and proven track record in many segments including per- and polyfluoroalkyl substances (PFAS) since 1998, social audits since 1990 and sustainability assurance since 2003 Broadest portfolio and most comprehensive capabilities to tackle sustainability challenges Sustainability transition Growth Strong financial and ESG profile People, performance and agility At least CHF 600 million in incremental sales by 2027 vs. 2023 baseline. IMPACT NOW framework We have set up a framework to provide more value to customers through a portfolio of sustainability services across four key topics: Climate – greenhouse gas (GHG) emission reductions and the energy transition towards net-zero. Circularity – reducing plastic pollution and enabling circularity through sustainable design, material optimization, recyclability and effective waste management. Nature – environmental risk management, including contamination (PFAS, microplastics, etc.), to curb biodiversity loss and ecosystem damage. ESG assurance – aligning skills and strategy with regulatory and corporate objectives requirements to ensure accountability, accuracy and consistency in ESG disclosures. Focus on IMPACT NOW in action IMPACT NOW supports customers in every aspect of their sustainability journey, from responsible farming to consumer protection. Focus on dairy industry Case study ESG assurance services • Health and safety • Quality testing • Audits and certification NATURE Soil preservation CIRCULARITY Recyclable packaging CLIMATE Carbon neutrality ESG ASSURANCE Responsible farming and animal welfare 21 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information With rapid digital growth and widespread adoption of new technologies across all industries, our focus is on building trust in these technologies through rigorous digital and data integrity services. Largest network 500+ digital trust experts and 10 accredited cyberlabs #1 in high-assurance cybersecurity evaluations with 20% market share First to deliver management system certification and Common Criteria evaluation of AI 40+ years of experience in high-security assurance testing First to deliver Common Criteria evaluation of Post-Quantum Cryptography 60+ standards and certification schemes covered Our digital trust footprint We are strengthening our leadership in cybersecurity and AI trust. Following the 2021 acquisition of brightsight®, the leader in secure connected products and systems, we expanded further this year. Gossamer enhances our global offering on cybersecurity expertise, while CertX bolsters our capabilities in cybersecurity, AI and functional safety. These bolt-on acquisitions enable us to serve North America and Europe more effectively, providing a comprehensive, one-stop solution. Positioned to address rising digital trust needs, we are ready to lead in the fast-growing cybersecurity market. “Protecting consumers’ most valuable assets – safety in autonomous cars, online privacy and financial security in electronic payments – is paramount. At brightsight®, we build trust for a hyperconnected world.” Xavier Vilarrubla CEO, brightsight® Case study Digital acceleration Growth Strong financial and ESG profile People, performance and agility At least CHF 200 million in incremental sales by 2027 vs. 2023 Gossamer brightsight® CERTX 22 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information We are focused on rebalancing our footprint to capture growth opportunities, leveraging our global reach and local expertise. By expanding in key markets and bolstering our presence in North America and Europe, we are committed to delivering sustainable growth and value to our clients, stakeholders and communities. Largest global TIC network Our experts are accessible where and when you need them Widest end-market coverage providing versatility to adapt to customer needs in almost all industries Superior technical expertise when you need to be sure Tailored growth strategy at country level agility and flexibility to address the key growth areas locally Portfolio focus Growth Strong financial and ESG profile People, performance and agility Doubling sales in North America by 2027 to at least USD 1.4 billion Doubling sales in North America We are committed to doubling sales in North America by 2027, focusing on high- growth segments such as environmental testing, industrials and pharmaceuticals. By leveraging acquisitions like ArcLight Wireless and Beta Analytic, and our leadership in PFAS testing, we are expanding capabilities and entering fast- growing environmental testing, industrial and pharma markets to meet customer needs effectively. Our strategy prioritizes market-leading innovations, like the broadest PFAS testing scope, alongside acquisitions. With a robust growth approach, we aim to solidify our position as a leading provider in North America. 145 labs and growing in North America Focus on Biopharmaceutical Stability Analysis, USA 23 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Objectives We are fundamentally a people business. We work through a unique network of highly qualified professionals, so it is key that the Group puts its people in the best mindset and in the right organization to allow them to succeed. We will promote performance and accountability across the Group. • New incentive scheme fully aligned with Group targets • Accountability, performance and cash flow culture to fully leverage SGS’s recognized scientific excellence • Local management empowerment • Talent development and retention • Successful Senior Leadership Meeting in April 2024 • Testing and inspection managed regionally and supported by lean central resources for global contracts and technical expertise • Certification (Business Assurance) managed as a global business unit while keeping strong synergies with the network • Focused Executive Committee of 13 members • Elimination of duplicate responsibilities between regions and business lines • Continuous internal process optimization • Implement CHF 150 million cost reduction with run-rate reached by end 2025 (vs. 2023 baseline) Accountability, performance and cash flow culture New organization Corporate simplification Growth Strong financial and ESG profile People, performance and agility CHF 150 million CHF 100 million from a lean operating model and CHF 50 million in procurement savings by 2025 (vs. 2023 baseline) 24 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Objectives We have defined a strong financial and ESG profile with clear targets and disciplined cash allocation to foster greater trust among investors and other stakeholders. • High growth profile of 5-7% organic growth, plus 1-2% coming from bolt-on acquisitions leading to 6-9% growth at constant currency annually • Sustainability and Digital Trust at more than 15% of sales by 2027 • Boost in margin of at least 150 basis points by 2027 • Cash conversion of above 50% leading to around CHF 800 million of free cash flow by 2027 • Free cash flow greater than or equal to cash outflow on bolt-on acquisitions and dividend • Strong credit rating maintained • Attractive shareholder remuneration • Material progress towards our 2030 target to reduce 28% of our Scope 3 emissions • At least one-third of leadership positions held by women • 7 million hours of training per year to employees, clients and communities • 93% customer satisfaction score Financial targets Capital allocation Corporate Sustainability targets Growth Strong financial and ESG profile People, performance and agility 6-9% annual growth at constant currency 25 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Being a leader in corporate sustainability gives us the credibility to better assist our clients and support them on their sustainability journey. Ranked sixth most sustainable company globally by TIME, we exceed expectations as a fundamentally non-polluting, ever-progressing business. Corporate Sustainability Corporate Sustainability culture We are constantly looking for ways to promote our sustainability culture throughout the network. In 2024, we have worked on several initiatives: • Aligned with market best practices, we launched our Net-Zero Transition Plan. The Plan outlines a roadmap to reduce our emissions through various decarbonization levers and initiatives that cover our entire value chain. It goes beyond meeting our near-term 2030 science-based targets, also charting a course to secure the necessary effort, investment and collaboration to achieve at least a 90% reduction across our entire value chain by 2050, a commitment validated by the Science Based Targets initiative (SBTi) • We also set an industry benchmark by being the first TIC company to publish a double materiality assessment, enhancing transparency and accountability (see page 158) • We launched a Sustainability Training framework: as part of our goal to deliver high-quality training to our employees, we have begun developing a comprehensive sustainability training framework. This framework includes a basic course for all employees, an intermediate course for those seeking specialization, a course for Top Management, and continued Human Rights training, which was already part of our curriculum • To foster resource use efficiency, we continued to deploy the Spot the Orange Dot campaign. 26 of our affiliates covering 851 locations took part in the challenge of launching the second wave of the campaign to focus on reducing waste and water consumption • We organized the SGS Sustainability Challenge, an awareness campaign with more than 50 countries participating in activities to reduce our carbon footprint, improve workplace practices and engage with our local communities. This year’s theme was ‘green commuting’ and included a ‘Green way to work contest’ and a drawing contest for children of SGS employees • We maintained our commitments with the United Nations Global Compact and the Women Empowerment Principles, standing united with thousands of forward-thinking companies around the world committed to taking responsible business action to create a better world for present and future generations Strong sustainability governance From the Board of Directors to our affiliates, a strong governance structure ensures that sustainability considerations are embedded in all of our activities. Our senior management is actively involved in overseeing the delivery which is developed by the Corporate Sustainability team. The Sustainability Committee of the Board assists the Board in evaluating and supervising the Group policies and strategies regarding the impact of the Group’s activities on society and the planet. The Executive Committee is then mandated to take the overall strategy forward, approving and implementing more detailed programs, policies and targets for operations across the group. Our regions and affiliates are responsible for implementing various initiatives that support the group sustainability targets. A network of regional sustainability ambassadors translate them into regional or local initiatives, cascading our corporate programs and guidelines down to every single SGS site. SGS Green Way to Work Contest 26 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information With 99,483 employees, operations around the world, an extensive global supply chain and services provided in all sectors, we are determined to make a positive, long-lasting impact. Ambitious medium-term targets have been set, aligned with and embedded in our Strategy 27. Our key objectives for 2027 are: • Have at least one-third of leadership positions held by women • Deliver 7 million hours of training per year to employees, clients and communities • Achieve a customer satisfaction score of 93% • Material progress towards our 2030 target to reduce 28% of our Scope 3 emissions In addition, significant progress has been made across the three key areas of our sustainability ambitions: environment, social and governance. Achievements • Net-Zero Transition Plan published • 2.2% reduction in indirect CO2 emissions (Scope 3) • First lab receiving platinum certification under the My Green Lab verification program Achievements • 7.4 million training hours delivered to employees, clients and communities • 32% women in leadership positions • 7.3/10 engagement index Achievements • 91% customer satisfaction score • New Code of Integrity • 99.5% employees trained to the Code of Integrity Environment Social Governance Our corporate sustainability awards Member of the DJSI World and Europe for the 11th year in a row. #1 in the Professional Services Industry category in S&P Corporate Sustainability Assessment (CSA) Ranked sixth on TIME’s list of the World’s Most Sustainable Companies Gold medal, awarded to the top 5% of evaluated companies AAA rating, the highest ESG rating awarded by MSCI, for the fifth consecutive year Low risk rating driven by our strong management of material ESG issues Leadership position in CDP’s highly technical climate change management assessment Inclusion in the FTSE4Good index for the seventh consecutive year, for our strong commitment to sustainable practices Prime distinction, awarded to companies with an ESG performance above the sector-specific Prime threshold Included in the top 100 most diverse and inclusive companies in the prestigious FTSE Diversity & Inclusion Index 27 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Financial and non-financial outlook Strategy 27 financial targets +5-7% organic growth annually 2025 marks the first anniversary of our Strategy 27. As we enter the second year, we are executing our strategy at full speed, ensuring we stay on track to achieve our targets and reinforce our leadership in the industry. Learn more about Strategy 27 in the SGS Full year 2024 results earnings release and presentation. Read more www.sgs.com/en/integrated-report Discover our Strategy 27 www.sgs.com/en/our-company/about- sgs/strategy-27 After leases and interests >50% cash conversion1,2 by 2027 Margin on sales1 >150basis points significant improvement of at least 150 basis points by 2027 vs. 2023 baseline Global Biosciences Laboratory Lisbon, Portugal Sales Adjusted operating income Free cash flow 1. Refer to alternative performance measures of this report. 2. Free cash flow/(EBITDA – leases). Refer to alternative performance measures of this report. 28 Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information SGS | 2024 Integrated Report Strategy 27 non-financial targets Water Sampling, Portugal Diversity, equity and inclusion at least 1/3 of leadership positions held by women by 2027 Education 7million hours of training per year to employees, clients and communities by 2027 Social Responsible business 93% customer satisfaction score by 2027 Governance Environmental leadership 28% Material progress towards our 2030 target to reduce 28% of our Scope 3 emissions Environment 29 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information This Corporate Governance report informs shareholders, prospective investors and other stakeholders on SGS’s policies in matters of corporate governance, such as the structure of the Group, shareholders’ rights, the composition, roles and duties of the Board of Directors and its committees and the management, and internal controls and audits. This report has been prepared in compliance with the Swiss Exchange (SIX) Directive on Information Relating to Corporate Governance of 29 June 2022 (in force since 1 January 2023) and the Swiss Code of Best Practice for Corporate Governance. The SGS Corporate Governance framework aims to achieve an efficient allocation of resources and clear mechanisms for setting strategies and targets, in order to maximize and protect shareholder value. SGS strives to attain this goal by defining clear and efficient decision-making processes, fostering a climate of performance and accountability among managers and employees alike and aligning employees’ remuneration with the long-term interests of shareholders. Corporate governance Mineral Sample Handling for Analytical Testing, Peru 30 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. Group structure and shareholders 32 1.1. Group structure 32 1.2. Significant shareholders 32 1.3. Cross-shareholdings 32 2. Capital structure 33 2.1. Issued share capital 33 2.2. Conditional share capital 33 2.3. Changes in capital 33 2.4. Shares and participation certificates 33 2.5. Dividend-right certificates 33 2.6. Limitations on transferability and admissibility 33 of nominee registrations 2.7. Convertible bonds and warrants/options 33 3. Board of Directors 34 3.1. Members of the Board of Directors 34 3.2. Other activities and vested interests 38 3.3. Limits on external mandates 38 3.4. Elections and terms of office 38 3.5. Internal organizational structure 38 3.5.1. Allocation of tasks within the Board 38 of Directors 3.5.2. Committee composition 39 3.5.3. Working methods of the Board 40 and its committees 3.6. Definition of areas of responsibility 40 3.7. Information and control instruments 41 vis-à-vis the management 3.7.1. Responsibility of the Board 41 3.7.2. Governance framework 41 3.7.3. Information to the Board 41 3.7.4. General Counsel and Chief 41 Compliance Officer 3.7.5. Risk assessment 41 4. Executive Committee 42 4.1. Limits on external mandates 42 4.2. Management contracts 42 5. Compensation, shareholdings 44 and loans 5.1. Content and method of determining the 44 compensation and the shareholding programs 5.2. Rules on approbation by the annual 44 shareholders’ meeting of executive pay 5.2.1. Rules on performance-related pay and 44 allocation of equity-linked instruments 5.2.2. Rules on loans, credit facilities and 44 post-employment benefits 5.2.3. Rules on vote on pay 44 6. Shareholders’ participation rights 44 6.1. Voting rights and representation restrictions 44 6.1.1. Rules on instructions to the independent 44 proxy and electronic participation in the Annual Shareholders’ Meeting 6.2. Statutory quorums 44 6.3. Convocation of General Meetings of Shareholders 44 6.4. Inclusion of items on the agenda 44 6.5. Registration in the share register 44 7. Change of control and 44 defense measures 7.1. Duty to make an offer 44 7.2. Clauses on change of control 44 8. Auditors 44 8.1. Duration of the mandate and term 44 of office of the lead auditor 8.2. Audit fees 44 8.3. Additional fees 45 8.4. Information instruments pertaining 45 to the external audit 9. Information policy 45 10. Non-trading periods 45 11. Risk management 45 11.1. Risk governance 45 11.2. Risk management framework 46 11.3. Risk oversight 46 11.4. Risk assessment results 47 11.5. Emerging risks 50 12. Internal control 51 12.1. Internal control environment 51 12.2. Minimum control standards 51 31 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. Group structure and shareholders 1.1. Group structure 1.1.1. Operational group structure SGS SA, registered in Geneva (CH), also referred to as the ‘Company,’ controls directly or indirectly all entities worldwide belonging to the SGS Group, which provides independent testing, inspection and certification services. The shares of SGS SA are listed on the SIX Swiss Exchange (Swiss Security Number: 249745; ISIN: CH0002497458). The Group consists of two divisions: Testing and Inspection (divided into five regions) and Certification (Business Assurance): • Testing and Inspection – Asia Pacific – Eastern Europe, Middle East and Africa – Europe – Latin America – North America • Certification – Business Assurance Two business lines provide support on business development and global accounts to the P&L owners: • Business lines – Industries & Environment and Natural Resources – Connectivity & Products and Health & Nutrition • Functions – Finance – Legal & Compliance – Information Technology – Human Resources 1.1.2. Listed companies in the Group None of the companies under the direct or indirect control of SGS SA have listed shares on any stock exchange. 1.1.3. Non-listed companies in the Group The material legal entities consolidated within the Group are listed on pages 144 to 145 of the annual report, with details of the share capital, the percentage of shares controlled directly or indirectly by SGS SA and the registered office or principal place of business. The disclosure of significant subsidiaries is limited to entities whose contribution to the Group consolidated financial statements in 2024 represent at least 0.5% of consolidated sales or 1% of consolidated assets as well as the material direct subsidiaries of SGS SA. This definition of materiality excludes dormant companies, pure sub-holding companies or entities used solely for the detention of assets. Details of acquisitions and disposals made by the SGS Group during 2024 are provided in note 10 of the consolidated financial statements included on page 102 of this annual report. 1.2. Significant shareholders To the knowledge of the Company, the shareholders owning more than 3% of its share capital as at 31 December 2024, or at the date of their last notification as per Article 120, al. 1 of the Financial Market Infrastructure Act (FinMIA), were Groupe Bruxelles Lambert (acting directly and through Serena SARL, URDAC and FINPAR X), with 19.13% (December 2023: 19.31%) of the share capital and voting rights of the Company, UBS Fund Management (Switzerland), with 6.32% (December 2023: 3.03%) and BlackRock Inc., with 5.21% (December 2023: 5.18%). As at 31 December 2024, the SGS Group held 0.32% of the share capital of the Company (December 2023: 1.64%). During 2024, the Company has published regularly on the electronic platform of the Disclosure Office of the SIX Swiss Exchange Ltd all disclosure notifications received from shareholders of transactions subject to the disclosure obligations of Article 120, al. 1 of FinMIA. During 2024, the Company published a total of five reports regarding the composition of its significant shareholders to the Disclosure Office of the SIX Swiss Exchange Ltd. 1.3. Cross-shareholdings Neither SGS SA nor its direct and indirect subsidiaries have any cross-shareholding in any other entity, whether publicly traded or privately held. A group structure to serve clients locally and globally Chief Executive Officer Asia Pacific Europe North America Eastern Europe, Middle East and Africa Business Assurance Latin America Finance Legal & Compliance Information Technology Connectivity & Products Health & Nutrition Industries & Environment Natural Resources Testing and Inspection Certification Functions Global Business Development P&L Leaders Human Resources 32 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2. Capital structure 2.1. Issued share capital The share capital of SGS SA amounts to CHF 7 580 130.36 as of 31 December 2024 and comprises 189 503 259 fully paid-in, registered shares of a par value of CHF 0.04. On 31 December 2024, SGS SA held 609 870 treasury shares (2023: 3 064 685). 2.2. Conditional share capital SGS SA has conditionally increased its share capital by a nominal amount of CHF 1 100 000 divided into 27 500 000 registered shares with a par value of CHF 0.04 each. This conditional share capital increase is intended to obtain the shares necessary to meet the Company’s obligations with respect to employee equity- based remuneration plans and option or conversion rights of convertible bonds or similar equity-linked instruments that the Board is authorized to issue. If increased by the maximum amount of the conditional share capital, the existing share capital of 189 503 259 shares would increase by approximately 14.5% to 217 003 259 shares. The conditional capital is not limited in time. The right to subscribe to such conditional capital is reserved to beneficiaries of employee share option plans and holders of convertible bonds or similar debt instruments and therefore excludes shareholders’ preferential rights of subscription. The Board is authorized to determine the timing and conditions of such issues, provided that they reflect prevailing market conditions. The term of exercise of the options or conversion rights may not exceed 10 years from the date of issuance of the equity- linked instruments. Until 23 March 2023, the Company had an authorized share capital of CHF 500 000 which was not renewed beyond this term. 2.3. Changes in capital The share capital of the Company was increased in April 2024 to create dividend shares for distribution of the share dividend to eligible shareholders. In 2024, the shareholders approved an increase of the share capital by creation of 4 964 934 shares (corresponding to 2.6% of the share capital). The share capital of the Company was reduced in August 2024 to cancel shares purchased by application of share buyback programs initiated by the Company. In 2024, the shareholders approved a reduction of the share capital by cancellation of 2 837 475 shares (corresponding to 1.5% of the share capital). In 2023, the nominal value of the registered shares of the Company was divided by a factor of 25; consequently, the number of shares in issue was multiplied by 25, while the share capital remained unchanged. No other changes in the share capital of the Company have been made in the course of the last three years. 2.4. Shares and participation certificates All shares, other than treasury shares held by SGS SA, have equal rights to the dividends declared by the Company and have equal voting rights. Treasury shares owned directly or indirectly by the Company do not earn dividends. The Company has not issued any participation certificates (bons de participation/Partizipationsscheine). 2.5. Dividend-right certificates The Company has not issued any dividend-right certificates. 2.6. Limitations on transferability and admissibility of nominee registrations SGS SA does not limit the transferability of its shares. The registration of shares held by nominees is not permitted by the Company’s articles of association, except by special resolution of the Board of Directors. By decision of the Board, the Company’s shares can be registered in the name of a nominee acting in a fiduciary capacity for an undisclosed principal, provided, however, that shares registered in the names of nominees or fiduciaries may not exercise voting rights above a limit of 5% of the aggregate share capital of the Company. The Company has a single class of shares and no preferential rights have been granted to any shareholder. 2.7. Convertible bonds and warrants/options No convertible bonds have been issued by the Company or by any entity under its direct or indirect control. In 2024, no options or similar instruments have been issued by the Company or by any of the Group’s subsidiaries. 33 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3. Board of Directors Board members, key industry experience based on the Global Industry Classification Standard (GICS): Industrials Consumer discretionary Consumer staples Healthcare Financials Information technology Communication services Calvin Grieder Sami Atiya Phyllis Ka Yan Cheung Ian Gallienne Tobias Hartmann Jens Riedl Kory Sorenson Janet S. Vergis 3.1. Members of the Board of Directors This section presents the members of the Board of Directors of the Company with their functions in the Group, their professional backgrounds and all their material positions held outside the Group in governing and supervisory boards, management and consultancy functions, official tenures and political commitments, both in Switzerland and abroad. The Board of Directors is the highest governing body within the Group. It is the ultimate decision-making authority except for those decisions reserved by law for the Annual General Meeting. The Board of Directors has set out criteria for the selection of new Directors and has conducted a search which results in periodic changes to the composition of the Board of Directors. The aim of this exercise is to ensure that the Board is continuously in a position to provide leadership, strategic oversight and guidance, and contribute to setting ambitious targets for the Group and meeting long-term value creation objectives. The competencies sought by the Group for its Board of Directors include experience of senior executive leadership in international businesses, strategic planning, finance, technology and innovation. When selecting candidates for the Board of Directors, the Company has due regards to the experience, professional qualifications, areas of expertise, age, gender and national background as well as leadership style, so that at all times, the Board and its committees have the required skills. At the Annual Shareholders Meeting of March 2024, Shelby Du Pasquier did not stand for re-election. All other members were re-elected for a term of office of one year. Biographical information on former members of the Board of Directors is available in the corporate governance reports of prior years. The members of the Board of Directors as at 31 December 2024 were as follows: 34 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Calvin Grieder Nationality: Swiss Year of birth: 1955 Appointment: March 2019 Function in SGS • Chair: Board of Directors • Chair: Nomination Committee • Sustainability Committee Key experience • Automation and control technology (USA) • Food processing • Risk management • System engineering and services • Telecom and digital services Professional history 2001-2016: Bühler (CH); CEO 1999-2000: Swisscom (CH & DE) 1994-1998: SIG (CH) 1991-1994: Mikron (CH) 1984-1990: Bürkert (DE & USA) 1980-1983: Georg Fischer (CH & USA) Education • Master of Science in Process Engineering, ETH Zurich • Advanced Management Program (AMP), Harvard University Other activities and functions Givaudan SA*, Vernier (CH), Chairman of the Board Bühler Group AG, Uzwil (CH), Chairman of the Board Carivel7 AG, Zurich (CH), Owner Eraneos Group AG, Zurich (CH), Chairman of the Board Avenir Suisse, Zurich-Oerlikon (CH), Member of the Board of Trustees Advisory Board ETH – Department of Mechanical & Process Engineering (CH) Sami Atiya Nationality: German Year of birth: 1964 Appointment: March 2020 Function in SGS • Board of Directors • Nomination Committee • Chair: Remuneration Committee Key experience • Robotics • Automation • Medical technology • Risk management • Software and logistics • Transportation Professional history 2016-present: ABB Ltd (CH, SE); President and Exective Committee Member 1997-2014: Siemens Group 1995-1997: Harald Balzer & Partner 1994-1995: Robert Bosch – Blaupunkt 1988-1993: Fraunhofer Institute Karlsruhe Institute of Technology Education • Master of Business Administration (MBA), Massachusetts Institute of Technology (MIT), USA • Master’s degree in electrical engineering and automation, Karlsruhe Institute of Technology, Germany • PhD in Electrical Engineering (Robotics, Artificial Intelligence and Sensors), University of Wuppertal/Karlsruhe Institute for Technology, Germany Phyllis Ka Yan Cheung Nationality: Chinese Year of birth: 1970 Appointment: March 2022 Function in SGS • Board of Directors • Sustainability Committee Key experience • Change management • Digital and data-driven organization • Enterprise-level risk management • Growth in Asian markets • Retail and consumption • Talent and workforce management Professional history 2015-present: McDonald’s China; CEO 2012-2014: McDonald’s Singapore and Malaysia 2000-2011: McDonald’s China 1998-2000: Leo Burnett, Hong Kong 1997-1998: Momentum Strategy Consultant, India 1992-1997: Saatchi & Saatchi, J. Walter Thompson, Hong Kong Education • Bachelor of Arts, The University of Hong Kong, China • Executive MBA, The Chinese University of Hong Kong, China Other activities and functions Fellow, Aspen China Fellowship (CN) Member, Aspen Global Leadership Network (CN) * Listed company. 35 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Ian Gallienne Nationality: French, Belgian Year of birth: 1971 Appointment: March 2013 Function in SGS • Board of Directors • Remuneration Committee • Nomination Committee Key experience • Consumer/retail management strategy • Finance • M&A • Risk management Professional history 2012-present: Group Bruxelles Lambert; CEO 2005-2012: Ergon Capital Partners 1998-2005: Rhône Capital LLC Education • MBA from INSEAD, France Other activities and functions adidas* (DE), Vice Chairman of the Supervisory Board, Member of the General Committee Imerys*, Paris (FR), Member of the Board, Chairman of the Strategic Committee, Member of the Compensation Committee, Member of the Appointments Committee Pernod Ricard SA*, Paris (FR), Member of the Board, Member of the Strategic Committee, Member of the Remuneration Committee Carpar SA (BE), Member of the Board Compagnie Nationale à Portefeuille SA (BE), Member of the Board Financière De La Sambre SA (BE), Member of the Board Société Civile du Château Cheval Blanc (FR), Member of the Board Tobias Hartmann Nationality: German, American Year of birth: 1972 Appointment: March 2020 Function in SGS • Board of Directors • Audit Committee Key experience • Cybersecurity • eCommerce and marketplaces • IT • Logistics and operations • Retail • Risk management • Technology Professional history 2018-Feb 2025: Scout24 SE; CEO 2017-2018: HelloFresh SE 2011-2015: eBay Enterprise (part of eBay Inc.) Education • MBA, Clark University, USA • Bachelor of Arts (BA), Clark University, USA Jens Riedl Nationality: German Year of birth: 1973 Appointment: March 2023 Function in SGS • Board of Directors Key experience • Finance and financial risk management • Industrials and business services • M&A • Strategy • Transportation and logistics • TIC Professional history 2022-present: Groupe Bruxelles Lambert; Investment Partner and Head of DACH 2019-2021: Permira 1999-2018: Boston Consulting Group Education • MBA from University of St. Gallen, Switzerland • PhD in Finance from European Business School (EBS), Germany Other activities and functions GEA Group*, Düsseldorf (DE), Member of the Supervisory Board, Member of the Presiding Committee, Member of the Nomination Committee Sanoptis, Zug (CH)/Berlin (DE), Member of the Supervisory Board Canyon, Koblenz (DE), Observer to the Supervisory Board emarketing Munich (DE), Member of the Supervisory Board * Listed company. 36 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Kory Sorenson Nationality: British Year of birth: 1968 Appointment: March 2019 Function in SGS • Board of Directors • Remuneration Committee • Chair: Audit Committee • Chair: Sustainability Committee Key experience • Audit and control • Capital markets • Financial risk management • Governance • M&A • Remuneration (executive and wider workforce) • Sustainability Professional history 2005-2010: Barclays Capital; Managing Director 2001-2005: Credit Suisse 1998-2001: Lehman Brothers 1997-1998: Morgan Stanley 1995-1997: Commerz Financial Products 1992-1995: Total SA Education • Post-graduate (DESS) degree in corporate finance, l’Institut d’études politiques de Paris, France • Master’s in applied economics, University of Paris-Dauphine, France • Bachelor’s in econometrics and political science, American University, USA • Governance programs from Harvard Executive Education, INSEAD and the Stanford Graduate School of Business • Professional certificate IBM Cybersecurity Fundamentals Other activities and functions Pernod Ricard SA*, Paris (FR), Member of the Board and Chair of the Remuneration Committee, Member of the Audit Committee Bank Gutmann, Vienna (AU), privately owned, Member of the Supervisory Board Comgest, Paris (FR), Chair of the Board of Partners AA Limited, Jersey (UK), Member of the Board and Chair of Audit and Risk Committee Premium Credit Limited (UK), Member of the Board and Chair of Audit and Risk Committee Janet S. Vergis Nationality: American Year of birth: 1964 Appointment: March 2021 Function in SGS • Board of Directors • Audit Committee • Nomination Committee Key experience • Board governance and CPG knowledge • Healthcare (pharmaceuticals, biotechnology and devices) • M&A • R&D background • Strategy • US leadership across large, complex and heavily regulated businesses Professional history 2013-2019: various private equity firms 2010-2012: OraPharma, Inc.; CEO 1988-2009: Johnson & Johnson Education • Bachelor of Science in Biology, Pennsylvania State University, USA • Master of Science in Physiology, Pennsylvania State University, USA Other activities and functions Teva Pharmaceutical Industries* (USA), Member of the Board, Chair of Compliance Committee Member of the Human Resources/ Compensation Committee, Member of the Nominating and Governance Committee Dentsply Sirona* (USA), Member of the Board, Chair of the Science & Technology Committee, Member of the Compensation Committee Church and Dwight Company* (USA), Member of the Board, Chair of the Nomination and Governance Committee, Member of the Compensation and Human Capital Committee, Member of the Executive Committee * Listed company. 37 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The Board of Directors considers the following criteria to assess the independence of its members: 1. The Director must not have been employed by the Company in an executive capacity within the last five years 2. No family member of the Director is employed or was employed during the past three years by the Group in any management capacity 3. Neither the Director nor a family member has received any payments from the Group other than board remuneration approved by the Annual General Meeting 4. The Director is not acting (and must not be affiliated with a company that is acting in material manner) as an advisor or consultant to the Company or a member of the Company’s Executive Committee 5. The Director must not be affiliated with a significant customer or supplier of the Company 6. The Director must have no personal services contract(s) with the Company or a member of the Company’s Executive Committee 7. The Director must not be affiliated with a not-for-profit entity that receives significant contributions from the Company 8. The Director must not have been a partner or employee of the Company’s external auditor during the past three years 9. The Director must not have any other conflict of interest that the Board determines to mean they cannot be considered independent 10. Any Director who has served for more than 12 consecutive terms is no longer considered as independent The Board of Directors has concluded that its members are independent on the basis of these criteria, with the exception of Ian Gallienne and Jens Riedl (both being representatives of a significant shareholder owning more than 10% of the shares of the Company). None of the members of the Board of Directors exercise or have exercised an executive role or operational management tasks for the Company or any entity of the Group. None of them have any significant business connection with the Company or the Group. The remuneration of the members of the Board of Directors is detailed in the Remuneration Report. The Chair of the Board, jointly with members of the Board of Directors, assesses periodically the performance of the Board as a whole, of its committees and of each of its individual members. On the basis of this periodic assessment, changes to the composition of the board membership are regularly proposed to the Company’s Annual General Meeting. This periodic performance evaluation is designed to ensure that the Board is always in a position to provide an effective oversight and leadership role to the Group. 3.2. Other activities and vested interests Other activities and vested interests of the members of the Board of Directors are indicated in Section 3.1. 3.3. Limits on external mandates The Company’s articles of association limit the number of mandates permissible to members of the Board. These rules limit the number of mandates that members of the Board can accept to no more than 10 mandates as members of the top governing or administrative body in entities outside the Group, of which a maximum of five as member of the top governing or administrative body of listed companies. Mandates assumed at the request of a controlling entity do not count towards the maxima defined in the articles of association. In addition, the articles of association limit to 10, the permissible participations in boards of association, foundations and other non-profit organizations. All board members have confirmed that they comply with these rules. 3.4. Elections and terms of office The articles of association of SGS SA provide that each member of the Board of Directors, and among them the Chair of the Board of Directors and the members of the Remuneration Committee, is elected annually by the shareholders for a period ending at the next Annual General Meeting. Each member of the Board of Directors is individually elected. There is no limit to the number of terms a Director may serve. The initial date of appointment of each member of the Board is indicated in Section 3.1. 3.5. Internal organizational structure The duties of the Board of Directors and its committees are defined in the Company’s articles of association and in its internal regulations, which are reviewed periodically. They set out all matters for which a decision by the Board of Directors is required. In addition to the decisions required by Swiss company law, the Board of Directors approves the Group’s strategies and key business policies, investments, acquisitions, disposals and commitments in excess of delegated limits. 3.5.1. Allocation of tasks within the Board of Directors The Chair of the Board of Directors is elected by the Annual General Meeting. He or she plans and chairs the board meetings, defines the agenda of the meetings and conducts the deliberations of the Board of Directors. All members of the Board of Directors participate in deliberations of the Board and participate equally in its decisions. Within the limits permitted by law or by the articles of association, the Board of Directors can decide to delegate certain of its tasks to standing or ad-hoc committees. With the exception of the members of the Remuneration Committee, who are elected by the shareholders, the members of the committees are appointed by the Board of Directors. 38 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The Chair of the Board of Directors attends the meetings of the Remuneration and Audit Committee with a consultative vote. He chairs the Nomination Committee and is a member of the Sustainability Committee. Each committee acts within terms of reference established by the Board of Directors and set out in the internal regulations of the Company. The minutes of the committee meetings are available to all Directors. Remuneration Committee Members of the Remuneration Committee are elected individually by the Annual General Meeting, with the Chair of the Committee designated among them by the Board of Directors. The Remuneration Committee is focused on matters of executive remuneration. The Remuneration Committee acts in part in an advisory capacity to the Board of Directors, and in part as a decision-making body on matters that the Board of Directors has delegated to the Committee. The Committee advises the Board of Directors on matters regarding the remuneration of the members of the Board of Directors and the Executive Committee, and on general policies relating to remuneration applicable to the Group. The Committee defines the conditions of share-based remuneration plans and other variable compensation plans, issued from time to time by the Company. The Committee reviews and approves the contractual terms of the employment of the Chief Executive Officer and the other members of the Executive Committee. The Committee reviews regularly, at least once a year, the compensation of each member of the Executive Committee. The Committee drafts the SGS Remuneration report. Audit Committee The Audit Committee supports the Board of Directors in discharging its duties in relation to financial reporting, reporting on non-financial matters and internal controls. Such duties include consideration of the appropriateness of accounting policies, the adequacy of internal controls, risk management and legal and regulatory compliance. It exercises oversight over the major risks identified by the Board of Directors. This includes specifically the risks of cybersecurity. It receives regular reports on cybersecurity incidents and measures taken by management to address this risk. The Audit Committee is also responsible for the supervision of the internal and external auditors of the Group, each of which provides regular reports to the Committee on findings arising from their work. The Committee reports regularly to the Board of Directors on its findings. Sustainability Committee A dedicated Sustainability Committee was established in 2022 in response to the growing importance of sustainability to the Company and its stakeholders. The Committee plays an important role in supporting the Company to develop its sustainability plans and act accordingly and it assists the Board of Directors in fulfilling its responsibilities with respect to the impact of the Group activities on the environment and the communities in which it operates. The Committee also provides support and advice in the development of new sustainability services directed to customers The Committee oversees sustainability- related issues that may affect the Group and its customers, including reputational and non-financial risks. Nomination Committee The Nomination Committee assists the Board in the succession planning, selection and nomination of candidates on positions to the Board of Directors and on the Executive Committee of the Group. The Board of Directors and its committees hold physical meetings as well as meetings by video conference. The table below does not make any distinction between physical and remote meetings of the Board of Directors and its committees. Meetings of Annual frequency Average duration Board of Directors 6 times 4 hours Remuneration Committee 5 times 2 hours Audit Committee 4 times 3 hours Sustainability Committee 4 times 2 hours Nomination Committee 4 times 2 hours 3.5.2. Committee composition The following chart describes the committees and their membership as at 31 December 2024: Remuneration Audit Sustainability Nomination Calvin Grieder Sami Atiya Phyllis Ka Yan Cheung Ian Gallienne Tobias Hartmann Jens Riedl Kory Sorenson Janet S. Vergis Chair Member 39 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Attendance at board and committee meetings The Board of Directors expects its members to attend and participate actively in its meetings and the meetings of its committees and has set a minimum target of attendance at 75% of meetings. The chart below summarizes the attendance by each board member in 2024 at the meetings of the Board and the respective standing committees. Member Board meetings Remuneration Audit Sustainability Nomination Calvin Grieder 6/6 4/4 4/4 Sami Atiya 6/6 3/3 4/4 Phyllis Ka Yan Cheung 6/6 4/4 Ian Gallienne 6/6 3/3 4/4 Tobias Hartmann 6/6 4/4 Shelby R. du Pasquier1 2/6 Jens Riedl 6/6 Kory Sorenson 6/6 3/3 4/4 4/4 Janet S. Vergis2 6/6 4/4 1. Did not stand for re-election in 2024. 2. Elected to the Nomination Committee in March 2024. 3.5.3. Working methods of the Board and its committees The Board of Directors and each committee convene regularly scheduled meetings with additional meetings held as and when required, in person or by video conference. The Board of Directors and the committees may pass resolutions by written consent. Each board member has the right to request that a meeting be held or that an item for discussion and decision be included in the agenda of a meeting. Board and committee members receive supporting documentation in advance of the meetings and are entitled to request further information from management in order to assist them to prepare for the meetings. The Board of Directors and each of the committees can request the attendance of members of the management of the Group. The Board of Directors and each of the committees are authorized to hire external professional advisors to assist them in matters within their sphere of responsibility. To be adopted, resolutions need a majority vote of the members of the Board of Directors or committee, with the Chair having a casting vote. The Board of Directors and its committees convene as often as required. In principle. the Board of Directors meets at least four times a year, i.e. once every quarter. The Board Committees meet at least three times a year. 3.6. Definition of areas of responsibility The Board of Directors is responsible for the ultimate direction of the Group. The Board discharges all duties and responsibilities that are attributed to it by law. In particular, the Board: • Leads and oversees the conduct, management and supervision of the Group • Determines the organization of the Group • Assesses risks facing the business and reviews risk management and mitigation policies • Appoints and removes the Group’s Chief Executive Officer and other members of the Executive Committee • Defines the Group’s accounting and control principles • Decides on major acquisitions, investments and disposals • Discusses and approves the Group’s strategy, financial statements and annual budgets • Prepares the General Meetings of Shareholders and implements shareholders’ resolutions • Notifies the judicial authorities in the event of insolvency of the Company, as required by Swiss law Save as provided for in the Company’s internal regulations or otherwise mandated by law or by the Company’s articles of association, the management of the Group is delegated to the Chief Executive Officer, assisted in this task by the Executive Committee. The Chief Executive Officer exercises the executive authority and assumes global management responsibility of the Group. In the event of uncertainty on a particular issue regarding the separation of responsibility between the Board of Directors and management, the final decision is taken by the Chair of the Board. The Chair of the Board is regularly informed of the activities of the Executive Committee by the Chief Executive Officer, the Chief Financial Officer and the General Counsel. The Executive Committee is chaired by the Chief Executive Officer and consists of those individuals entrusted with the operational management of the Group’s activities. The composition, role and organization of the Executive Committee are detailed in Section 4. 40 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3.7. Information and control instruments vis-à-vis the management 3.7.1. Responsibility of the Board The Board of Directors has ultimate responsibility for the system of internal controls established and maintained by the Group and for periodically reviewing its effectiveness. Internal controls are intended to provide reasonable assurance against financial misstatement and/or loss, and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information and compliance with relevant legislation, regulation and industry practice. 3.7.2. Governance framework The Group has an established governance framework, which is designed to oversee its operations and assist the Company in achieving its objectives. The main principles of this framework include the definition of the role of the Board and its committees, an organizational structure with documented Group delegated authorities from the Board to management, and procedures for the approval of major investments, acquisitions and other capital allocations. The Chief Executive Officer and the General Counsel and Chief Compliance Officer attend all meetings of the Board of Directors and its committees. The Chief Financial Officer attends the meetings of the Board of Directors and the Audit Committee. The Chief People Officer attends the meetings of the Remuneration Committee and Nomination Committee. The other members of the Executive Committee and further members of the management only participate in the Board and committee meetings by invitation. The Board and each of its committees meet from time to time in private sessions, outside of the presence of management. 3.7.3. Information to the Board The Board of Directors is constantly informed about the operational and financial results of the Group by way of monthly management reports, which describe the performance of the Group and its business lines. During each Board meeting, the Chief Executive Officer and the Chief Financial Officer present a report to the Board of Directors on the operations and financial results, with an analysis of deviations from prior year and from current financial targets. During Board meetings, the Board is updated on important issues facing the Group. During Board meetings or committee meetings, board members can request any information concerning the Group. The Board reviews and monitors regularly and formally previous acquisitions and large investments as well as the implementation of related group strategies. The Group has a dedicated Internal Audit function reporting to the Chair of the Audit Committee, which assesses the effectiveness and appropriateness of the Group’s internal controls and risk management. The Audit Committee approves the annual audit plan of the Internal Audit, receives its reports and deliberates on audit findings and is updated on implementation of corrective actions identified by Internal Audit. 3.7.4. General Counsel and Chief Compliance Officer The Group has a compliance function, headed by the General Counsel and Chief Compliance Officer, who reports to the Audit Committee and the Board of Directors and has direct access to the Chair of the Board. The compliance function oversees the implementation of a compliance program based on the SGS Code of Integrity, available in 30 languages. The goal of the program is to ensure that the highest standards of integrity are applied to all of the Group’s activities worldwide in accordance with international best practices. The Audit Committee is informed on a regular basis about violations of compliance standards and the implementation of corrective actions, including disciplinary actions taken. 3.7.5. Risk assessment The Board conducts on a yearly basis an assessment of the risks facing the Group. This process is conducted with the active participation and input of management and the Group Risk Committee. Once identified, risks are assessed according to their likelihood, potential impact and mitigation. The Board deliberates on the adequacy of measures in place to mitigate and manage risks and assigns responsibility to designated managers for implementation of such measures. As part of this process, the ownership of and accountability for identified risks are approved by the Board. The risks identified and monitored by the Board fall broadly into three categories: first, environment risk, which includes circumstances outside the Group’s direct sphere of influence, such as competition and economic or political landscape; second, process risks that include risks linked to the operations of the business, the management of the Group and the integrity of its reputation in the marketplace; and third, risks associated with information and decision making. For each of the risk categories and within these categories, for each significant risk identified, the Board deliberates on proposed mitigation, risk avoidance or risk transfer measures and approves action plans designed to control such risks. 41 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 4. Executive Committee The management of the Group is entrusted to the Chief Executive Officer and the Executive Committee. The Executive Committee is composed of 13 members: • The Chief Executive Officer • Six P&L leaders responsible for the five regions of the Testing & Inspection division and the Certification division • Two heads of global business development • Four members responsible for the global functions Teymur Abasov Head of Eastern Europe, Middle East and Africa Nationality: Azerbaijani Year of birth: 1972 Joined SGS: 1994 Education Master’s Degree in electrical engineering Previous responsibilities 2007-2024: SGS of COO Eastern Europe & Middle East 2006-2007: Managing Director Nationality: French Year of birth: 1970 Joined SGS: 2023 Education MBA from the Superior School of Commerce of Reims, France Previous responsibilities 2018-2023: Holcim, Switzerland, Group CFO and member of the Executive Committee 2011-2018: Essilor, France, Group Chief Financial Officer and member of the Executive Committee Other activities and vested interests Member of the Board of Directors and Chair of the Audit Committee of Danone SA, France Derick Govender Head of North America Nationality: South African Year of birth: 1970 Joined SGS: 2002 Education Analytical Chemistry and Management Degrees Previous responsibilities 2020-2024: SGS, EVP of Natural Resources 2015-2020: SGS, EVP of Minerals Services Rafael Navazo Head of Latin America Nationality: Spanish Year of birth: 1977 Joined SGS: 2024 Education MSc in Management from HEC Paris Mining Engineer degree from Universidad Politécnica of Madrid Previous responsibilities 2020-2024: Vesuvius, Vice President of EMEA Flow Control 2016-2019: Imerys, GM and VP of EMEA & Asia Filtration division Steven Du Head of Asia Pacific Nationality: Chinese Year of birth: 1972 Joined SGS: 1999 Education MSc Logistics & Supply Chain Management Previous responsibilities 2021-2024: SGS, COO of North-East Asia Pacific 2019-2021: SGS, Managing Director of Mainland China and Hong Kong SAR Jeffrey McDonald Head of Business Assurance Nationality: Australian/American Year of birth: 1964 Joined SGS: 1995 Education Postgraduate Diploma in education Previous responsibilities 2015-2020: SGS, EVP of Certification and Business Enhancement 2007-2015: SGS, COO of North America Malcolm Reid Head of Europe Nationality: British Year of birth: 1963 Joined SGS: 1987 Education BSc Chemistry Previous responsibilities 2015-2024: SGS, COO of South-East Asia Pacific 2012-2015: SGS, EVP of Consumer Testing Services Géraldine Picaud Chief Executive Officer 42 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information During 2024, Frankie Ng, CEO; Olivier Merkt, General Counsel and Chief Compliance Officer; Olivier Coppey, EVP of Health & Nutrition; Fabrice Egloff, COO of Africa & Western Europe; Luis Felipe Elias, COO of Latin America; Stephen Nolan, COO of North America; Alim Saidov, EVP of Industries & Environment; Wim van Loon, COO of Northern & Central Europe and Jessica Sun, Head of Group Human Resources, left the Executive Committee and the Company. Biographical information on former members of the Executive Committee may be found in prior years’ Corporate Governance reports at www.sgs.com/en/investors/reports. 4.1. Limits on external mandates The articles of association of the Company limit the number of mandates permissible to members of the Executive Committee, to no more than four mandates as members of the top governing or administrative body of legal entities outside the Group, of which a maximum of one as members of the top governing or administrative body of listed legal entities. Mandates assumed at the request of a controlling entity do not count towards the maxima defined in the articles of association. In addition, the articles of association set limits to participations in boards of association and other not-for-profit organizations to no more than 10 such memberships. 4.2. Management contracts The Company is not party to any management contract delegating management tasks to companies or individuals outside the Group. Charles Ly Wa Hoi Head of Connectivity & Products and Health & Nutrition Nationality: French Year of birth: 1966 Joined SGS: 1992 Rejoined: 2008 Education Degree in electronics engineering from ENSEIRB-MATMECA Previous responsibilities 2021-2024: SGS, EVP of Connectivity & Products 2018-2020: SGS, Vice President of Retail Solutions and European Business Development, Consumer and Retail Egidijus Jokubauskas Head of Industries & Environment and Natural Resources Nationality: Lithuanian Year of birth: 1971 Joined SGS: 2006 Education Master’s degree in marine transport technologies from the University of Klaipeda, Lithuania Engineering degree in Marine Power Installations from the University of Klaipeda, Lithuania Previous responsibilities 2021-2024: VP, Mineral Commodities 2015-2021: VP, Energy Minerals James Roberts Chief People Officer Nationality: British Year of birth: 1971 Joined SGS: 2024 Education MSc in Organisation Development BA Business studies Previous responsibilities 2017-2024: Holcim UK, HR Director 2008-2016: Alstom Power/GE (Switzerland), VP HR of Energy Services David Plaza Chief Information Officer Nationality: Spanish Year of birth: 1975 Joined SGS: 2020 Education IT Engineer – graduated in Sport Science Previous responsibilities 2020-2024: SGS, Chief Information Officer 2018-2020: Adecco Group, Regional IT Head South Europe & EEMENA Martin Oesch Group General Counsel & Chief Compliance Officer Nationality: Swiss Year of birth: 1973 Joined SGS: 2024 Education Master’s degree in law from the University of Berne Master of Laws degree (LLM) from the University of Chicago Law School Previous responsibilities 2016-2024: Barry Callebaut, Switzerland, Group General Counsel & Corporate Secretary 2014-2015: Barry Callebaut, Switzerland, Head Legal & Compliance of EMEA Other activities and vested interests Member of the Board of Directors of Cocoa Horizons Foundation Marta Vlatchkova Chief Financial Officer Nationality: French/Bulgarian Year of birth: 1977 Joined SGS: 2024 Education Master’s degree in finance from the University of Paris II Pantheon-Assas, France Bachelor’s degree in international Economic Relations from the University of National & World Economy in Sofia, Bulgaria Previous responsibilities 2023-2024: Sandoz, Chief Accounting Officer 2018-2023: Holcim, Head of Group Accounting, Reporting and Financial Planning & Analysis 43 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5. Compensation, shareholdings and loans 5.1. Content and method of determining the compensation and the shareholding programs The Group’s overriding compensation policies are defined by the Board of Directors. The objectives of these policies are twofold: 1) to attract and retain the best talent available in the industry, and 2) to motivate employees and managers to create and protect value for shareholders by generating long-term sustainable financial achievements. In line with these principles, board members are entitled to a fixed fee, which takes into account their level of responsibility. Members of the Executive Committee receive a fixed remuneration and are entitled to a performance-related annual bonus and a Long-Term Incentive plan. The Annual General Meeting approves the compensation payable to the Board and the Executive Committee. The rules on the vote on pay applicable in the Group are explained below. The ultimate responsibility for defining remuneration policies and deciding on all matters relating to remuneration rests with the Board of Directors, subject to decisions that require binding resolutions of the Annual General Meeting. The Board of Directors is assisted in its work by the Remuneration Committee, whose members are elected by the Annual General Meeting. 5.2. Rules on approbation by the Annual Shareholders’ Meeting of executive pay 5.2.1. Rules on performance-related pay and allocation of equity-linked instruments The Company’s articles of association define the principles of the variable remuneration and the allocation of shares or equity-linked instruments to the members of the Executive Committee. Please refer to the Remuneration report, pages 61 to 64 for a description of the Company’s rules in the matter. In the event of changes in composition of the Executive Committee occurring after the approval by the Annual General Meeting of the remuneration of the executive team, the Board is authorized to increase up to a maximum of 40% the amount authorized by the shareholders for that purpose. 5.2.2. Rules on loans, credit facilities and post-employment benefits Loans granted to members of the governing bodies of the Company may not exceed one year of remuneration and must be granted at market conditions. As at 31 December 2024 (same as at 31 December 2023), no loan or advance has been granted by the Group to members of the Executive Committee. 5.2.3. Rules on vote on pay See section ‘3. Remuneration governance’ in the Remuneration report (page 56-57). 6. Shareholders’ participation rights All registered shareholders are informed of the half year and full year results upon the publication of such results by the Company. They can request a copy of the Company’s annual report and are personally invited to attend the Annual General Meeting. The Company’s annual report and press releases are publicly available on its website. 6.1. Voting rights and representation restrictions All registered shareholders can attend the General Meetings of Shareholders and exercise their right to vote. A shareholder may also elect to grant a power of attorney to an independent proxy appointed by the Company and elected in advance by the General Meeting of Shareholders or to any other representative holding a written power of attorney. There are no voting restrictions, subject to the exclusion of nominee shareholders representing undisclosed principals, as detailed in Section 2.6. 6.1.1. Rules on instructions to the independent proxy and electronic participation in the Annual Shareholders’ Meeting Shareholders have the opportunity to give general or specific voting instructions on all matters on the agenda of the General Meeting of Shareholders to the independent proxy, who is elected by the General Meeting of Shareholders. These instructions can be issued in written form or by electronic transmission. The voting of resolutions by electronic votes is authorized by the articles of association, within the modalities defined by the Board of Directors. 6.2. Statutory quorums The General Meeting of Shareholders can validly deliberate regardless of the number of shares represented at the meeting. Resolutions are adopted by the absolute majority of votes cast unless Swiss company law mandates a special majority. 6.3. Convocation of General Meetings of Shareholders The rules regarding the convocation of General Meetings of Shareholders are in accordance with Swiss company law. 6.4. Inclusion of items on the agenda The agenda of the Annual General Meeting is issued by the Board of Directors. Shareholders representing at least 0.5% of the Company’s share capital may request the inclusion of an item on the agenda of the Annual General Meeting, provided that such a request reaches the Company at least 40 days prior to the meeting. 6.5. Registration in the share register The Company maintains a share register for registered shares. The share register is closed approximately one week prior to the date of the Annual General Meeting of shareholders (the exact date is communicated in the invitation to the Annual General Meeting). 7. Change of control and defense measures No restriction on changes of control is included in the Company’s articles of association. 7.1. Duty to make an offer In the absence of any specific rules in the Company’s articles of association, any investor or group of investors acquiring more than 33.3% of the shares and voting rights of the Company has the duty to make a public offer in compliance with the applicable Swiss takeover rules. 7.2. Clauses on change of control There are no general plans or standard agreements offering specific protection to members of the Board of Directors or Executive Committee, or other employees of the Group in the event of a change of control, subject to the standard rules regarding termination of employment. However, long- term incentive plans issued by the Company may include rules allowing acceleration of vesting of benefits in the event of a change of control. 8. Auditors 8.1. Duration of the mandate and term of office of the lead auditor PwC was elected as auditors of the Company and the SGS Group. The auditors of the Company are subject to re-election at the Annual General Meeting every year. PwC took up office in 2021 in relation to the 2021 financial statements and has audited the Company’s and Group’s 2024 financial statements. The Company requires the lead auditor to be changed at the latest after completion of seven annual audit cycles, in line with Swiss law. The Audit Committee reviews annually the desirability to renew the annual mandate of its external auditors before proposing to the Board and the Annual General Meeting the re-election of the auditors. 8.2. Audit fees Total fees of PwC related to the audit of the Company and the Group 2024 financial statements amounted to CHF 5.7 million (2023: CHF 6.3 million). 44 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 8.3. Additional fees In addition, PwC other professional services fees amounted to CHF 1.0 million in 2024. These are mainly composed of tax compliance services and other assurance services. 8.4. Information instruments pertaining to the external audit The Audit Committee is responsible for evaluating the external auditor on behalf of the Board of Directors and conducts assessments of the audit services provided to the Group during its regular meetings. The Audit Chair meets with the auditor at least four times per year, including in private sessions without the presence of management. In 2024, the Audit Chair met five times with the external auditors. The Committee considers and approves the proposed audit plan, conducts assessment of the performance of the auditor and approves audit fees on the basis of the amount of work required to perform the audit. The Audit Committee reviews with the group auditors the significant financial statement risk areas arising from the audit, including the key audit matters referred to in the statutory auditor’s report. When evaluating the performance of the auditors, the Audit Committee assesses the effectiveness of the audit based on Swiss law, the auditors’ understanding of the business of the Group and how matters of significant importance for the group internal control and financial reporting are identified, reported and resolved. The Audit Committee reviews also how the group auditors interact with the component audit firms in charge of auditing the main subsidiaries of the Group, and the relevance and timeliness of issuance of statutory audits and management letters. The Audit Committee places great emphasis on the independence of the external auditors, and on the absence of conflict of interests, both at the group level and at the level of individual subsidiaries. It reviews carefully the type of other services which are provided by the auditors, in addition to the audit, to ensure that such ancillary services could not endanger the independence of the audits. The Audit Committee has issued a policy on non-audit services which defines restrictively the type of admissible services, excluding from the admissible scope most tax advisory services and services related to prospective acquisitions and disposal. The policy also sets an approval process requiring prior approval of the Audit Committee for any assignment for non-audit services above defined thresholds. The audit fees are approved on the basis of a negotiated budget agreed with the group auditors, taking into account the complexity of the audit, the structure of the Group and its internal control systems and the responsibility of the auditors. The duties of the Committee include consideration of the audit plan, regular assessment of the performance of the auditor and approval of audit fees on the basis of the amount of work required in order to perform the audit. The Audit Committee reviews with the group auditors the significant financial statement risk areas arising from the audit, including the key audit matters referred to in the statutory auditor’s report. The auditors regularly present their findings, both during the deliberations of the Audit Committee and in written reports for the attention of the Board of Directors that summarize key findings. 9. Information policy The policy of the Group is to provide individual and institutional investors, directly or through financial analysts, business journalists, investment consultants (financial community) and employees with financial and business information in a consistent, broad, timely and transparent manner. The Group website has a section fully dedicated to investor relations, where all financial information and presentations are available. SGS meets regularly with institutional investors, holds results presentations, roadshows and presentations at broker-sponsored country or industry conferences, and attends one-on- one meetings. The Group publishes consolidated full year audited results, half year unaudited results and quarterly unaudited sales updates in print and online formats. The annual report is published in English and is available upon order from the Group’s website. The current list of publication dates is available on the Group’s website. The Group acknowledges the directives on the independence of financial research issued by the Swiss Bankers Association. In addition, the Group complies with rules regarding information and reporting of the Federal Act on stock exchange and securities trading, and the ordinance on stock exchanges and securities trading. The address of SGS’s main registered office and contact details by phone and email can be found on page 200 of this report. 10. Non-trading periods Members of the Board of Directors, Executive Committee and other employees having access to material non-public information are banned from trading in SGS shares during non-trading periods, preceding publication of yearly, half yearly and quarterly results. These periods are set between 31 December until and including the date of publication of the full year results and respectively, between 31 March, 30 June and 30 September until and including the date of the publication of the half year results and quarterly sales updates. In addition to these regular non-trading periods, the Company may impose additional trading bans from time to time, prior to the release of material non-public information, such as major acquisitions or disposals, or trading updates. 11. Risk management 11.1. Risk governance The Board of Directors, through the Audit Committee and the Sustainability Committee, provides oversight of the SGS Risk Management and Internal Control processes. The Audit Committee’s mandate includes supervising Compliance and Risk Management activities, as well as reviewing management and internal audit reports on the effectiveness of the Internal Control process and the performance of the Enterprise Risk Management (ERM) framework. The organizational structure, supporting the effective implementation of the Risk Management and Internal Control processes, is built on the ‘three lines of defense’ model: • In the first line, local operational management holds ownership, responsibility, and accountability for identifying, assessing, managing, and mitigating risks. It is also responsible for ensuring effective deployment of the Minimum Control Standards established by the Group. To facilitate and coordinate the ERM process, a ‘Risk Champion’ is appointed in each country where the Group operates • The second line consists of Group Corporate functions, such as Legal, Compliance, Risk Management and Internal Control, Corporate Security, IT, Sustainability and Health and Safety. These functions, along with the designated ‘Global Risk Owners’ for each risk category, oversee and support the implementation of the effective ERM process and robust internal controls by operational management, ensuring the first line operates as intended. Additionally, they contribute to the development of policies and controls to enhance the overall risk management framework • The third line is Internal Audit, an independent function that provides the Audit Committee and the Executive Committee with assurance regarding the effectiveness of the first and second lines of defense, as well as the ERM process and the adherence to Minimum Control Standards The Group Risk Committee (GRCo), which reports to the Executive Committee and Audit Committee, convenes at least three times a year. Its primary responsibilities include supervising the ERM and Internal Control processes, and monitoring the activities of the assurance functions (as outlined under the second line of defense). The GRCo is composed of the Chief Financial Officer (CFO, Chair), Group General Counsel (GGC), Chief People Officer (CPO), Chief Information Officer (CIO), a Head of a Region, and a Head of a Business Line – all members of the Group Executive Committee – along with representatives from Risk Management and Internal Control, Group Compliance, Sustainability, and the Head of Internal Audit. 45 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The Executive Committee holds ultimate responsibility for identifying company risks and embedding risk considerations into all strategic decisions and key business planning processes. 11.2. Risk management framework A robust and comprehensive ERM and Internal Control process is implemented throughout the company, supported by effective governance and tools. Our risk assessment process is tailored to accommodate the size and profile of all affiliates, ensuring the framework’s global applicability and the active involvement of key and relevant markets and businesses. During the year, SGS has continued to identify and address the main prevailing risks facing our organization. A number of risks have been redefined, to emphasize where the focal points are and the resources needed to address these risks. The 2024 process was coupled with the implementation of a new dedicated Governance, Risk and Compliance (GRC) tool to enhance the overall risk management process, including risk assessment, mitigation action monitoring and annual certification. Dedicated recurring training sessions on risk management framework, risk management process and governance, as well as risk scoping and risk assessment methodology were conducted for key risk stakeholders in 2024 across SGS globally. In addition, SGS is making significant progress in integrating the Double Materiality Assessment (DMA) approach in its ERM process. The DMA, which is regulated by the European Corporate Sustainability Reporting Directive (CSRD), involves identifying and assessing the company’s Impacts, Risks, and Opportunities (IROs): • Impacts that SGS may cause on society and the environment (inside-out) • Risks that SGS may face with a negative financial effect (outside-in) • Opportunities that SGS may capture with a positive financial effect (outside-in) All material risks identified and reported below in the ‘Risk assessment results’ are included in the double-materiality analysis disclosed in the ‘Non-financial statements’ part, except for those of a purely financial nature. 11.3. Risk oversight To support our risk management framework, the Group conducts risk assessments, using a bottom-up approach (first line of defense), with identification of potential risks, coupled with design and implementation of mitigation actions and action plans at a local level, where appropriate. Additionally, at Group level, SGS applies a top-down approach (second line of defense) to evaluate and conclude on the country level results as well as to identify and assess risks from the global perspective. The ultimate risk assessment results are reviewed and endorsed by the Group Risk Committee and Executive Committee. Risks are identified and assessed based on their likelihood and potential impact, considering both financial and non-financial perspective. In defining and assessing risks, our organization takes into account risk appetite and tolerance levels. Risk appetite refers to the level of risk that we are willing to accept or take on in pursuit of our objectives and goals. Risk tolerance, however, is a more specific and quantitative measure that represents the actual ability of our organization to withstand losses or variations in the value of its investments or decisions. In 2024, an external audit firm, in collaboration with Internal Audit, conducted an independent assessment of the Group’s ERM framework and provided recommendations for further enhancement. Through an integrated approach that notably incorporates Enterprise Risk Management, Double Materiality Assessment, Minimum Control Standards, and Group Delegated Authorities, SGS ensures an optimal and effective risk oversight. Risk assessment Risk management Risk monitoring and reporting • Risk profiling and scoping • Bottom-up and top-down assessment • Financial and non-financial risks • Double Materiality Assessment (DMA) • Risk appetite and tolerance • Mitigation actions • Minimum Control Standards (MCS) • Continuous action plan follow-up • Presentation of the group risk map to the Audit Committee Board of Directors Audit Committee Executive Committee Group Risk Committee Risk Management and Other Assurance Functions Local Operational Management Independent internal/external ERM framework assessment Risk governance and oversight Risk management cycle 46 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 11.4. Risk assessment results Risk category Risk title Material topic* Summary of potential consequences Mitigation measures taken by the Group External Economy & sovereign Loss of revenue due to decrease in service demand/economy • Customer satisfaction • Target organic growth not fully achieved • The new IMPACT NOW for sustainability offering was launched to capitalize on the expanding sustainability megatrend • Continued development of our Digital Trust services, targeting growing sectors and industries • Ongoing strengthening of presence in North America and Europe through both organic growth and acquisitions Business impact due to commodities and financial market fluctuations N/A • Target organic growth and profitability not fully achieved • Balanced resource allocation established to ensure optimal business and geographical diversification Lack of capital availability to grow the business • Corporate culture • Target organic growth not fully achieved • Stagnation or decline in market share in certain strategic business units • Stricter financial discipline enforced on CAPEX, working capital, and M&A management • New Free Cash Flow KPI introduced as part of the management incentive plan • Successful implementation of a scrip dividend, with the dividend policy to be aligned with earnings levels moving forward Price pressure • Corporate culture • Target profitability increase not fully achieved • The new lean operating model has been implemented to align with SGS’s capacity and cost structure with market demand • Procurement savings initiatives have been accelerated to offset rising costs and enhance profitability Industry Crisis or structural industry decline impacting revenue growth and profitability N/A • Target organic growth and profitability not fully achieved • Weakening of SGS leadership • A clear end-market focus has been defined to drive growth in expanding strategic business units, such as Certification, ESG, Connectivity and Environment Customer needs Loss of revenue due to insufficient adoption to changes in customer demand • Sustainability services • Customer satisfaction • Loss of customers resulting from an inability to meet demand due to insufficient capacity or inadequate sales forecast planning • Market share stagnation or decrease in some strategic business units • Management structure realigned to focus on local customers for locally managed operations and global key account management for globally driven businesses, enhancing customer proximity and improving sales forecast accuracy and proactivity • Preserve or develop a global footprint for strategic activities, enabling laboratory backup and cross-country collaboration • Expansion of Global Business Services to enhance operational excellence and reduce Turnaround Time (TAT) KPIs * Risks of purely financial nature not considered in the double materiality analysis are marked as ‘N/A’. 47 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Risk category Risk title Material topic* Summary of potential consequences Mitigation measures taken by the Group Hostile civil or political environment risks Business disruption, harm to personnel or property from any form of civil strife • Health and safety • Increase in crime, particularly criminal damage and looting • The personal security of employees at risk, and disruption to transport infrastructure adversely affecting business operations • In extreme cases, SGS facilities may be forced to cease operations or even close • Increased country Managing Director awareness of this risk, especially via the efforts of business continuity initiatives, in order to improve preparedness and responsiveness • Work from home initiatives improving resilience for those activities that do not demand presence on site • Better physical and procedural security controls to protect premises Technological innovation Loss of technological innovation opportunities • Cybersecurity and data privacy • Difficulty in fully leveraging emerging technologies impacts operational efficiency, service quality and the ability to address talent shortages • Limited adoption of innovative solutions restrict opportunities to unlock new revenue streams, particularly in data-driven and digital trust services • Build on established partnerships with research institutes, tech leaders and startups to drive innovation and align solutions with evolving customer needs and market demands • Maintain a strong focus on digitalization, emphasizing customer-centric solutions and advanced technologies like AI to enhance service delivery and competitiveness • Continue fostering a culture of awareness and adaptability through agile teams, continuous project validation and proactive exploration of disruptive technology trends such as Generative AI and Agentic AI Cyberattack Cyberattacks • Cybersecurity and data privacy • Compromise on critical data, disruption of operations, and erosion of customer trust and SGS reputation • Continue to strengthen cybersecurity defenses, including firewalls, identity & access management, and intrusion detection systems. Maintain the current 24/7 monitoring levels of the Security Operations Center and Digital Forensic & Incident Response services Business Ethics Bribery and corruption Bribery and corruption • Health and safety • Incidents of corruption • Fines, loss of business, and reputational damage • Robust compliance framework, featuring comprehensive policies and processes on Third-Party Due Diligence, Anti-Corruption and Conflicts of Interest • Prevention: fostering a culture of integrity based on our Code of Integrity, reinforced through systematic and recurring training for all employees • Detection: Compliance Committee dedicated to ensuring ethical conduct and strict adherence to the Code of Integrity across all company operations and activities Information Technology Access Ineffective access controls resulting in security breach and business disruption • Cybersecurity and data privacy • Unauthorized access to sensitive information and disturbance of operational activities • Robust access management solutions to prevent lateral movements and privilege escalation • Regular audits of access permissions and enforcement of least-privilege principles * Risks of purely financial nature not considered in the double materiality analysis are marked as ‘N/A’. 48 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Risk category Risk title Material topic* Summary of potential consequences Mitigation measures taken by the Group Human Capital Talent management Lack of succession planning of key personnel • Training and skills development • Negative effect on business continuity and operational excellence • Key positions potentially remaining vacant for extended periods, causing unprepared successors, inefficiencies and potential loss of competitive advantage • Succession planning program and talent review process ensure a strong pipeline for critical roles by integrating these practices into daily leadership activities, fostering proactive talent management and organizational resilience. These efforts are supported by mySGS to streamline and enhance this process effectiveness Inefficient performance management • Training and skills development • Misaligned employee behaviors and eroded engagement due to unclear or unrealistic goals • Employee disengagement, resulting in lower productivity and unfulfilled KPIs, which can negatively impact organizational performance • Driving high performance through proactive goal- setting, regular feedback, and alignment of individual and organizational goals. Accountability and process efficiency supported by implemented technologies Lack of qualified and competent employees • Customer satisfaction • Training and skills development • Reduced customer satisfaction and reputational damage due to an insufficient pool of qualified employees • Missed business opportunities, decreased productivity and weakened organizational competitiveness resulting from a lack of qualified talent • SGS Campus is an established SGS online learning platform, and is integrated with mySGS to lay the foundation for progress tracking and targeted development outcomes • Strengthened leadership through access to courses from leading business schools, coupled with the planned launch of a new Leadership Program in 2025 aligned with Strategy 27 • The ‘Career Conversation’ framework facilitating the alignment of employee aspirations with organizational goals through actionable plans, supported by tools for follow-up and tracking Management information Tax Non-compliant, incorrect or late tax return filings/transfer pricing local file preparation and documentation, and tax payment N/A • Tax adjustments, penalties and interest in tax assessments • Increased tax audit activities and scrutiny from tax authorities • Increased efforts in terms of internal and external resources to mitigate exposure • Standard tax procedures to risk identification, evaluation and mitigation • Tax risk management guidelines and implementation of controls in the local tax processes • Central preparation of local transfer pricing documentation with local adaption • Skilled in-house resources and where required review or outsourcing to reputable tax advisors * Risks of purely financial nature not considered in the double materiality analysis are marked as ‘N/A’. 49 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 11.5. Emerging risks As part of our assessment process, we also identify emerging risks that are likely to affect our business in the long term: Loss of technological innovation opportunities Impact of the risk on SGS The convergence of emerging technologies such as Generative AI, IoT, quantum computing, digital twins and advanced connectivity poses long-term risks to SGS’s traditional Testing, Inspection, and Certification (TIC) model. Startups and established providers are accelerating disruption through innovations which may lead to the following impacts on SGS: • The expanding adoption of digital twin technology across industries in which SGS has a strong presence may reduce reliance on SGS’s need and utilization of physical testing facilities, as virtual environments gain the ability to fully simulate physical properties • Advances in Generative AI and robotics may lead to the emergence of “lab- in-the-box” solutions, allowing clients to perform highly automated, on-site testing, which could decrease demand for certain testing services currently outsourced to SGS • The convergence of technologies like IoT, high-speed connectivity and Generative AI may enable remote live monitoring solutions in a sophisticated way, potentially disrupting SGS’s traditional inspection and testing services with real-time, digital alternatives. The aforementioned convergence may lead to a wave of a substitution of the services provided by SGS in favor of automated solutions • Generative AI and Agentic AI solutions may facilitate real-time compliance automation on client premises, automating the entire workflow from gathering evidences, analyzing them and producing reports, which could reduce the reliance on SGS’s auditing and certification services • The growing need for trust in digital technologies and the emerging regulations in that space may require innovative digital trust solutions beyond the traditional TIC model. If not addressed, this shift may hinder SGS’s ability to maintain its strong position in the digital domain Mitigating actions • Building on established alliances with research institutes, tech leaders, and startups to drive innovation (especially in areas where standardization is still in early development) and align solutions with evolving customer needs and market demands • Emphasizing customer-centric solutions through advanced technologies like AI and digital twins to enhance service delivery and maintain competitiveness • Fostering a culture of continuous learning and adaptability by empowering agile teams, conducting proactive validation of emerging technologies such as Generative AI and Agentic AI, and staying ahead of disruptive trends • Developing hybrid (physical and virtual) testing models, advancing real-time monitoring platforms and integrating IoT capabilities to provide cutting-edge digital assurance Adoption of stricter regulations with regard to cybersecurity, data protection, and AI governance Impact of the risk on SGS The regulatory landscape is becoming increasingly stringent, with NIS2 and the EU AI Act regulations setting higher standards for cybersecurity, data protection and AI governance. These regulations are still evolving and enforcement will likely intensify over the next 5-10 years, making this a sustained emerging risk. The introduction of stricter regulatory frameworks may require significant changes in the Company’s operations and require additional efforts to ensure the efficient adoption, in particular impacting: • Internal processes related to cybersecurity, data protection, and the development and deployment of AI systems, potentially leading to increased costs and resource allocation • Incident response capabilities across affiliates and cross-border reporting mechanisms, requiring additional investments • AI-driven initiatives and their implementation, taking into account compliance complexities, directly impacting SGS’s ability to innovate and compete in the market Mitigating actions • Establishing a compliance task force to monitor and address emerging regulatory requirements • Conducting periodic gap analyses to be up to date and aligned with prevailing and new regulations • Strengthening training programs on compliance for all stakeholders • Engaging with legal experts and industry bodies to keep abreast of regulatory changes 50 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 12. Internal control SGS’s internal control framework is based on Minimum Control Standards clarifying and reinforcing the responsibilities of the operating companies and businesses across all countries. These standards are equally applicable at Group level. Clear guidance and consequence management are in place for situations where these standards are not fully met. The Minimum Control Standards are managed and independently reviewed by our Risk Management and Internal Control department, in collaboration with ‘Internal Control Champions’ and Control Owners across our global operations. The SGS Internal Control System is designed to provide the Board of Directors and management with reasonable assurance regarding the reliability of financial reporting, compliance with laws and internal regulations, and the effectiveness and efficiency of key company processes and controls. Every SGS employee plays a vital role in supporting the Internal Control System to ensure the successful implementation and ongoing effectiveness of internal controls. 12.1. Internal control environment SGS is committed to establishing an effective Internal Control System at all levels of responsibility and fostering a culture of strong internal controls, supported by the active engagement of the Board of Directors and management. Ongoing training is provided throughout the Company. The Minimum Control Standards serve as the baseline for mandatory compliance across the Group and are the primary reference for the SGS corporate governance framework. The following key documents are integral to the Minimum Control Standards and support the internal control environment: • The Group Delegated Authorities, which define approval authorities and thresholds within the Group • The Code of Integrity, which offers guidance and examples to assist employees in navigating challenging situations 12.2. Minimum control standards The Minimum Control Standards encompass the following core business processes, extending beyond controls related to financial reporting: • Corporate Governance and Compliance: Compliance with the Code of Integrity and reporting, Third party due diligence, Insider trading and management transaction, Sanctions compliance, Group insurance, Security risk management, Litigation disputes, Personal data protection, Delegation of authorities • Accounting and Financial Reporting: Estimates, provisions and manual journal entries, Month-end closing and management review, Accounts and systems reconciliation, Statutory financial statements, Review of intercompany agreements and balances • Fixed, Leased and Intangible Assets: Reconciliation of asset movements and depreciation rates, Assets additions/ disposals and Construction in progress, Physical verification of fixed assets, Lease contracts • Inventory: Inventory valuation and count • Order-to-Cash: Customer master data management, Collections and refunds, Provision for bad debts, Unbilled revenue and work-in-progress, Pricing, Jobs and sales orders, Revenue recognition, Customer creditworthiness • Pension: Pension management, Valuation of pension assets and liabilities • Procure-to-Pay: Vendor master data management, Procurement agreements, Purchase orders approval and invoices processing, Payment processing, Travel and expense claims • Segregation of Duties: Segregation of duties identification and monitoring • Tax: Tax risk assessment and reporting, Tax filings, compliance and payments, Transfer pricing, Non-income taxes, Other direct taxes – Withholding tax, Tax audits • Treasury: Bank accounts and cash reconciliation, Bank authorizations and signatories, Forex management • Information Technology: User access management, Identity management, Network security, Training and awareness, Incident management, Vulnerability management, Data backup, storage and restoration process • Human Resources: Employee onboarding and employment management, HR master data management, Payroll management, Employee off-boarding • Sustainability: Sustainability reporting, Human rights compliance • Health and Safety: Health & safety, Business continuity Internal control monitoring throughout the Group The Group is dedicated to upholding high standards of internal control and regularly tests and documents adherence to its Minimum Control Standards. These activities are implemented at both the country and group level and include: • A comprehensive outline of mandatory controls as defined in the Group’s Minimum Control Standards • Control tests to assess their operational effectiveness, with clear guidance and testing methodology provided by Risk Management and Internal Control department to each entity • An annual internal certification process to review ongoing action plans and confirm management’s responsibility, at both country, regional and group level, for the quality of internal controls and financial reporting The implementation of action plans identified through the activities outlined above, as well as through internal and external audits, is closely monitored by the relevant Senior Management. The results of these procedures are presented to the Audit Committee. Internal control is consistently monitored at all levels across the Group. 51 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Clinical Studies, USA Remuneration report The SGS Remuneration report provides an overview of the SGS remuneration principles and policies and the related governance framework. The report also includes details on the remuneration of the Board of Directors and the Executive Committee related to the 2024 business year. The SGS Remuneration report has been prepared in compliance with the new Code of Obligations, in effect as of 1 January 2023, the Swiss Exchange (SIX) Directive on Information Relating to Corporate Governance, revised on 29 June 2022 and in effect as of 1 January 2023, the Swiss Code of Best Practice for Corporate Governance of economiesuisse, revised on 14 November 2022, and according to the articles of association of SGS SA, as revised and approved by the shareholders at the Annual General Meeting in 2024. 52 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. Introduction by the 54 Remuneration Committee 2. Remuneration at a glance 55 3. Remuneration governance 56 4. Remuneration policy of the 58 Board of Directors 5. Remuneration policy of the 59 Executive Committee 5.1. General principles 59 5.2. Remuneration mix 60 5.3. Fixed remuneration: annual base salary 60 5.4. Fixed remuneration: benefits 60 5.5. Short-term variable remuneration 61 5.6. Long-term variable remuneration 63 5.7. Timeline of remuneration 64 6. Remuneration awarded to the 65 Board of Directors 6.1. AGM vote on remuneration 65 6.2. Details of remuneration (audited) 65 6.3. Other compensation, loans and credit facilities (audited) 66 6.4. Shares and options held (audited) 67 6.5. Gender representation (audited) 67 6.6. Other activities (audited) 68 7. Remuneration awarded to the 70 Executive Committee 7.1. AGM vote on remuneration 70 7.2. Total remuneration (audited) 70 7.3. Fixed remuneration (audited) 71 7.4. Short-term variable remuneration (audited) 72 7.5. Long-term variable remuneration 74 7.6. Remuneration mix (audited) 76 7.7. Other compensation, loans and credit facilities (audited) 76 7.8. Shares and options held (audited) 76 7.9. Gender representation (audited) 77 7.10. Other activities (audited) 77 8. Report of the statutory auditor 78 53 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. Introduction by the Remuneration Committee On behalf of the Remuneration Committee, I am pleased to present the SGS Remuneration report for the year ended in December 2024, a year of strategic transformation. As the market leader in testing inspection & certification globally, providing innovative services to their customers, SGS aims to be the employer of choice. This is supported by the Company’s remuneration framework that is designed to attract, motivate and retain the best talent needed to ensure our success and growth globally while providing excellent returns to you, our shareholders. In 2024, the group underwent significant organizational changes under the new leadership of Géraldine Picaud, CEO. The Company defined and launched Strategy 27: Accelerating growth, building trust. The central pillar of Strategy 27 is ‘People, Performance and Agility.’ SGS implemented a more agile management structure in 2024, which is the foundation of its performance culture. The Group streamlined the leadership team to provide clear accountability and focus on results. This new, agile organization now comprises of six organizations accountable for sales growth, profit and loss, and cash flow. Additionally, two Global Business Development teams were created to bring commercial expertise to our end-markets to further enhance sales growth over the entire product portfolio. These teams are supported by four central functions. To further reinforce the performance culture, the Group carried out a comprehensive revision of its reward strategy. Both short-term and long-term incentive plans have been redesigned with clear performance metrics to prioritize growth, margin improvement, and cash generation, while maintaining alignment with the shareholders’ interests and focus to environmental, social, and governance (ESG) matters. Detailed descriptions of the short-term and long-term incentive plan structures can be found in sections 5.5. and 5.6. of this report. In 2024, SGS sales grew organically by 7.5%, delivering an adjusted operating income margin on sales of 15.3% – marking a 60-basis point improvement compared to 2023 – and a free cash flow of CHF 748 million, 24% higher than the previous year. I am delighted with this outstanding business performance, which highlights the success of our new incentive schemes. Another outcome of the corporate simplification process is the dissolution of the senior management body, previously comprising the CEO, CFO and Group Legal Counsel. The newly formed Executive Committee, now consisting of 13 members, has absorbed the responsibilities previously held by senior management. Consequently, starting with this 2024 report, all remuneration reporting for the Executive Committee will be consolidated into two categories: total compensation for the Executive Committee, and the CEO. The change in CEO took place at the 2024 Annual General Meeting (AGM). In this report, we will outline the remuneration elements for the incoming CEO, Géraldine Picaud, which includes her compensation as CFO from 1 January to the AGM. On the following pages, you will find detailed information about our remuneration principles and policies, and the remuneration awarded to the Board of Directors and the Executive Committee related to the business year 2024. We have made significant strides in enhancing the clarity and transparency of this report. We trust that it will serve as a valuable resource for understanding and evaluating the group’s reward policies and strategies. I look forward to your support on the 2024 annual remuneration report at the AGM. Sami Atiya Chair of the Remuneration Committee 54 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2. Remuneration at a glance Board of Directors: summary of current remuneration system In order to compensate their activities and responsibilities as the highest governing body of the Group and to guarantee their independence in exercising their supervisory duties towards the executive management, members of the Board of Directors receive a fixed remuneration only in the form of cash and restricted shares. Annual mandate remuneration: (CHF thousand, gross) Cash Restricted shares Board of Directors Chair (Board retainer) 500 165 Board of Directors Member (Board retainer) 150 50 Audit Committee Chair 70 – Audit Committee Member 50 – Remuneration Committee Chair 40 – Remuneration Committee Member 30 – Nomination Committee Chair – – Nomination Committee Member 30 – Sustainability Committee Chair 40 – Sustainability Committee Member 30 – Board members are required to accumulate during their tenure a number of shares equivalent in value to two years of an annual Board retainer. Board of Directors: remuneration AGM 2024 to AGM 2025 The remuneration awarded to the Board of Directors for the mandate AGM 2024 to AGM 2025 was within the limits approved by the shareholders at the AGM 2024: (CHF thousand, gross) Approved amount Actual amount AGM 2024 to AGM 2025 2 700 2 470 Executive Committee: summary of current remuneration system In order to attract and retain top industry talent, drive performance excellence and foster long-term value creation, Executive Committee members receive a fixed remuneration and a variable remuneration linked to short-term and long-term results. Remuneration element Purpose Vehicle Base salary Pay for the position Cash Benefits Protect against risks, cover retirement Contributions Short-Term Incentive (STI) Drive and reward annual performance excellence Cash, Restricted shares Long-Term Incentive (LTI) Drive and reward long-term performance excellence, align with shareholders’ interests Performance share units (PSUs) Members of the Executive Committee are required to accumulate during their tenure a number of shares equivalent in value to three times the annual base salary for the CEO and two times the annual base salary for the other members of the Executive Committee. Executive Committee: remuneration 2024 (CHF thousand, gross) Fixed remuneration 2024 STI 2024 pay-out LTI 2024-2026 grant Total 2024 granted LTI 2022-2024 vesting Total 2024 realized CEO 1 393 2 772 2 083 6 248 0 4 165 Other ExCo 8 751 8 161 4 770 21 682 1 439 18 351 The fixed remuneration (base salary and benefits) awarded to the Executive Committee members in 2024 was within the limits approved by the shareholders at the AGM 2023: (CHF thousand, gross) Approved amount Actual amount Year 2024 12 500 10 144 The short-term pay-out for the performance year 2024 was 233% of target for the CEO and, on average, 150% of target for other members of the Executive Committee. The total pay-out, CHF 10 732 thousand, is submitted to the approval of the shareholders at the AGM 2025. The long-term incentive 2024-2026 grant was within the limits approved by the shareholders at the AGM 2024: (CHF thousand, gross) Approved amount1 Actual amount1 Year 2024 12 000 10 280 1. Value of the PSUs granted assessed at the maximum possible vesting level according to the plan rules (150%). The vesting level of the long-term incentive 2022-2024, related to the performance period 2022-2024, granted in 2022 and vested in early 2025, was 30% of target; 16 260 shares were allocated to the Executive Committee members with a value of CHF 1 439 thousand. 55 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3. Remuneration governance The general principles of remuneration of the members of the Board of Directors and the members of the Executive Committee are defined in the articles of association (Art. 28, Art. 29, Art. 30, Art. 31 and Art. 32). The maximum aggregate amounts of remuneration of the members of the Board of Directors and of the Executive Committee are subject to a binding vote at the AGM. In addition, the Remuneration Report is subject to a consultative vote at the AGM. Here below are the details of the AGM voting structure: • Consultative vote on the remuneration report • Binding vote on the prospective maximum remuneration amount of the Board of Directors until the next Annual General Meeting • Binding vote on the retrospective short-term variable remuneration amount of the Executive Committee members • Binding vote on the prospective maximum fixed remuneration amount of the Executive Committee members • Binding vote on the prospective maximum value of the grants awarded under the long-term incentive plan to the Executive Committee members The table below summarizes the votes of the Annual General Meeting on remuneration matters in the last five years. (% of votes for) 2024 2023 2022 2021 2020 Consultative vote on the remuneration report 95.53 95.41 83.94 92.70 93.05 Binding vote on the prospective maximum remuneration amount of the Board of Directors 99.06 98.10 97.81 95.51 98.13 Binding vote on the prospective maximum fixed remuneration amount of the Executive Committee members 98.14 95.34 96.11 94.37 95.58 Binding vote on the retrospective short-term variable remuneration amount of the Executive Committee members 97.68 98.16 97.02 96.95 97.39 Binding vote on the value of the grants awarded under the long-term incentive plan to the Executive Committee members1,2 97.74 90.90 96.08 96.88 96.40 – 1. Until 2020, the SGS Long-Term Incentive plan provided a grant every three years. 2. Until 2023, the AGM voted on the current-year Long-Term Incentive; the AGM 2024 voted on both the 2024 (current year) and 2025 (next year) Long-Term Incentive; effective 2025, the AGM will vote only on the next year Long-Term Incentive. Within the limits approved by the AGM, the Board of Directors is responsible for determining the remuneration of the Board Chair and the directors. It also decides on the remuneration and terms of employment of the CEO. In addition, the Board of Directors defines general executive remuneration policies, including the implementation and terms and conditions of long-term incentive plans, as well as the financial targets relevant to any incentive plan. The Board of Directors is assisted in its work by a Remuneration Committee (the Committee), which consists of non-executive Directors. The Committee acts in part in an advisory capacity to the Board of Directors, and in part as a decision-making body on matters that the Board of Directors has delegated to the Committee. The Committee reviews regularly, at least once a year, the compensation of each member of the Executive Committee (including the CEO) and decides on all matters relating to the remuneration of these executives. When reviewing and deciding on executive remuneration policies, the Committee and the Board of Directors have access to group human resources staff and may use third-party consultants that specialize in compensation matters. In 2024, neither the Committee nor the Board of Directors had recourse to such external advisors. 56 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The following chart summarizes the authorization levels for the main decisions relating to the compensation of the Board of Directors and the Executive Committee members. Subject matter CEO Remuneration Committee Board of Directors Annual General Meeting Aggregate remuneration amount of the Board of Directors Individual remuneration of the members of the Board of Directors including the Chair of the Board Aggregate fixed remuneration amount of the Executive Committee Aggregate short-term variable remuneration amount of the Executive Committee Setting of annual financial targets for short-term variable remuneration of Executive Committee members Establishment of Long-Term Incentive plans Setting of multi-year financial and non-financial targets for long- term variable remuneration of Executive Committee members Aggregate value of the grants awarded under the Long-Term Incentive plan to Executive Committee members Individual remuneration of the CEO Individual remuneration of the Executive Committee members Remuneration report Recommendation Approval Binding vote Consultative vote The following directors served on the Committee during their mandate from Annual General Meeting 2024 to 2025: • Sami Atiya (Chair) • Ian Gallienne • Kory Sorenson In 2024, the Committee met three times and handled several matters pertaining to remuneration outside scheduled meetings. The Chair of the Remuneration Committee reports to the Board of Directors after each meeting on the activities of the Committee. The minutes of the Committee meetings are available to the members of the Board of Directors. Generally, the Chair of the Board attends the meetings of the Committee, except when matters pertaining to his own compensation are being discussed. The CEO, selected members of the Executive Committee, the Chief People Officer and the Global Head of Reward may be asked to attend the meetings in an advisory capacity. They do not attend the meeting when their own compensation or performance are being discussed. In line with its anti-discrimination and dignity at work policy, SGS is committed to promoting equal opportunity for all employees and an environment in which all members of the workplace treat all individuals both in the workplace and in other work-related settings at all times with dignity, consideration and respect. All employment-related decisions, including compensation, benefits and promotions, will be solely made on the basis of an individual’s qualifications, performance and behavior or other legitimate business considerations. SGS does not tolerate any discriminatory practices, in particular based on age, civil partnership, disability, ethnicity, family status, gender, gender identity, ideological views, marital status, nationality, political affiliation, pregnancy, religion, sexual orientation, social origin or any other status that is protected as a matter of local law. 57 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Members of the Board of Directors are appointed by the AGM for a period of one year until the date of the next ordinary AGM. Their remuneration follows the following principles and structure. Objectives The remuneration of the members of the Board of Directors is defined with two main objectives: • To compensate their activities and responsibilities as the highest governing body of the Group and their participation in the committees established within the Board of Directors • To guarantee their independence in exercising their supervisory duties towards the executive management Method of determination of remuneration levels In determining the amounts of the compensation elements, the Board of Directors considers the prevailing practices of the Swiss publicly traded companies belonging to the SMI or SMIM indexes, with market capitalization of similar size (-50%/+100%), and not belonging to the capital markets, insurance, and pharmaceuticals sectors: Adecco Barry Callebaut BKW EMS-Chemie Geberit Lindt+Spruengli Logitech Lonza Schindler SIG Combibloc Sonova Straumann Swatch Swiss Prime Site Swisscom VAT Group Remuneration elements Fixed remuneration only: • Annual Board retainer • Committee fees (Board chair not eligible) Part of the remuneration of the Board Chair may be paid in the form of a representation fee (per agreement with tax authorities). Board members are not entitled to variable remuneration, benefit plans of the Company or any termination/severance agreements. The remuneration of the members of the Board of Directors is subject to employer social charges according to Swiss legislation. Remuneration vehicles 75% of the annual Board retainer and Committee fees is settled in cash and paid in two installments (June and December). 25% of the annual Board retainer is settled in shares restricted for three years, which are allocated after the AGM during which the Board member is elected. The number of restricted shares is determined by dividing the value of 25% of the annual Board retainer by the average closing share price during the 20-day period following the payment of the dividends after the AGM. Restricted shares may not be sold, donated, pledged, or otherwise disposed of to third parties during the three-year restriction period. In case of change of control or liquidation, or in case a member of the Board ceases to exercise their mandate following death or permanent disability, the restriction period of the shares lapses. The shares remain restricted in all other instances. Remuneration levels (CHF thousand, gross) Board retainer Audit Committee fee Remuneration Committee fee Nomination Committee fee Sustainability Committee fee Chairmanship 665 70 40 – 40 Membership 200 50 30 30 30 Share Ownership Guidelines (SOG) Board members are required to accumulate during their tenure a number of shares equivalent in value to two years of annual Board retainer. 4. Remuneration policy of the Board of Directors 58 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5.1. General principles The Company’s remuneration policy applicable to the Executive Committee members is defined by the Board of Directors in support of Strategy 27: Accelerating growth, building trust – and in line with its business principles: integrity, health, safety and environment, quality and professionalism, respect, sustainability, leadership. Objectives The remuneration policy for members of the Executive Committee is designed to achieve three key objectives: • Attract and retain top industry talent by offering competitive and fair compensation packages • Drive performance excellence by aligning incentives with the achievement of annual operating goals and long-term strategic priorities • Foster long-term value creation by encouraging sustainable outcomes that benefit shareholders and contribute positively to society Method of determination of remuneration levels (peer group) SGS is a global company, operating in a broad range of sectors; the determination of the remuneration levels of the Executive Committee members must consider both global and local practices. We periodically compare our compensation practices with those of other similar global organizations: • Main competitors in the TIC industry ALS Bureau Veritas Eurofins Intertek • The Swiss listed companies belonging to the Swiss Leader Index (SLI), not belonging to the capital markets, insurance and pharmaceuticals sectors, of comparable size (-50% / +100% in terms of sales): Alcon Givaudan Lindt+Spruengli Logitech Lonza Schindler Sika Sonova Swatch Swisscom The elements of executive remuneration benchmarked include annual base salary and benefits, short-term and long-term incentives. Since half of our Executive Committee members are based outside Switzerland, we use information published by reputable data providers, including Mercer and Willis Towers Watson, related to both the Swiss market and the other markets where the Executive Committee members are based. As a reference point, SGS targets the median compensation level of the peer group. Remuneration elements and vehicles The members of the Executive Committee receive a fixed remuneration and a variable remuneration linked to short-term and long-term results: • The fixed remuneration includes an annual base salary and benefits • The variable remuneration consists of a short-term incentive and a long-term incentive Element Purpose Drivers Performance measures Vehicle Base salary Pay for position Skillset and experience, market benchmark – Cash Benefits Protect against risks, cover retirement Market practices – Contributions Short-term incentive Drive and reward annual performance excellence Annual financial and individual performance Organic sales growth, profit margin, free cash flow (group, region, and business); Individual leadership 50% cash 50% restricted shares Long-term incentive Drive and reward long-term performance excellence; align with shareholders’ interests Three-year financial and ESG1 performance rTSR2, Group EPS3, ESG1 metrics Performance share units (PSUs) 1. ESG: environmental, social and governance. 2. rTSR: relative total shareholder return. 3. EPS: earnings per share. 5. Remuneration policy of the Executive Committee 59 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Employment contracts of the Executive Committee members have no fixed term and can be terminated at any time by either party, provided that a notice period of six months is respected. For the CEO, the notice period is 12 months. The executive contracts do not provide for any severance payments (beyond the minimum legally required in the country of employment) and are subject to applicable legislation in the country of employment. They include non-competition provisions in the countries where such provisions are enforceable. The remuneration of the members of the Executive Committee is subject to employer social charges, according to the legislation in force in their country of employment. Share Ownership Guidelines (SOG) Members of the Executive Committee are required to own at least a certain multiple of their annual base salary in SGS shares, as follows: • CEO: three times the annual base salary • Other members of the Executive Committee: two times the annual base salary Executive Committee members have five years to comply with the SOG requirements. Until the obligation is met, restrictions on the sale of shares allocated through short-term incentive plan settlements and upon the vesting of long-term incentive plans will apply, with the exception of transactions made to cover income tax liabilities. In the event of a substantial drop in the share price, the Board of Directors has the discretion to modify the SOG. The determination of equity amounts against the SOG is defined to include vested shares allocated under the short-term and long-term incentive plans and other shares that are owned by the Executive Committee member directly or indirectly (by ‘closely related persons’). The Remuneration Committee reviews compliance with the SOG on an annual basis. 5.2. Remuneration mix The part of remuneration at risk (short-term incentive and long-term incentive) for the CEO represents, at target, 73% of her total remuneration. The part of remuneration settled in equity instruments (restricted shares and PSUs) represents, at target, 59% of her total remuneration. For the other members of the Executive Committee, the part or remuneration at risk represents, on average, 64% of their total remuneration. The part of remuneration settled in equity instruments represents, on average, 51% of their total remuneration. The part of the fixed remuneration linked to benefits is not considered in this analysis. The charts below show the remuneration mix for the CEO and the other members of the Executive Committee in three cases: at minimum (both short-term and long-term incentives at zero pay-out), at target (both short-term and long-term incentives at 100% pay-out) and at maximum (both short-term and long-term incentives at maximum pay-out). Remuneration mix for the CEO and other Executive Committee members in three cases (%) CEO Base salary (cash) Minimum Target Maximum Minimum Target Maximum 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Other Executive Committee members (on average) Short-term incentive (cash) Short-term incentive (restricted shares) Long-term incentive (PSUs) 5.3. Fixed remuneration: annual base salary The base salaries of the CEO and each Executive Committee member are reviewed annually based on market data for similar positions in those companies and geographies against which the Group benchmarks itself. In addition to individual performance and contribution, business performance and results, the deciding body considers the scope and complexity of the areas of responsibility of the position, and the skillsets and experience required to perform the job. 5.4. Fixed remuneration: benefits Benefits include the employer’s contributions to pension plans, the employer’s contributions to insurances for health, life, disability and other risks, allowances and benefits in kind. They are awarded in accordance with prevailing practices in the country of employment of the members of the Executive Committee. Swiss-based Executive Committee members participate, on the same basis as other Swiss employees of the Group, in the Company’s pension scheme. 60 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5.5. Short-term variable remuneration The CEO and the other members of the Executive Committee are eligible for a performance-related annual incentive plan (the short-term incentive). The short-term incentive is designed to reward the CEO and the other members of the Executive Committee for: • The annual financial performance of the Group and its businesses • The demonstration of leadership behaviors in line with the Group’s business strategy and sustainability ambitions The short-term incentive plan is reviewed annually to ensure its alignment with the Group’s business strategy and value to society ambitions. For the 2024 business year, the structure of the short-term incentive plan has been revised to align with Strategy 27: Accelerating growth, building trust. Incentive opportunity CEO Other Executive Committee members Target incentive opportunity 110% of base salary 60% – 80% of base salary Maximum incentive opportunity 275% of base salary 150% – 200% of base salary Performance objectives1 Growth Profitability Cash generation Purpose Measure the Company’s ability to grow organically Measure the Company’s operational profitability Measure the Company’s ability to generate cash Definition Organic sales growth vs. prior year (Group, Regions, Business) Adjusted Operating Income margin on sales (Group, Regions, Business) Free cash flow before restructuring (Group, Regions) Weighting CEO, corporate functions 30% Group 35% Group 35% Group Heads of regions 25% Region 25% Group 25% Region 25% Region Head of Business Assurance 35% Business Assurance 25% Group 40% Business Assurance – Heads of business support functions 20% Group 40% Business 20% Group 20% Group 2024 targets (Group) Threshold 4.5% 14.7% 561 CHF million Target 6.1% 15.0% 611 CHF million Stretch 6.7% 15.5% 661 CHF million Pay-out formula Pay-out 250% Threshold Target Stretch Achievement 50% 150% 200% 100% 0% 1. Refer to alternative performance measures of this report. 61 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Leadership multiplier The members of the Executive Committee are also rewarded for the demonstration of leadership behaviors in line with the Group’s business strategy and sustainability ambitions. The leadership multiplier is determined for each executive based on an assessment of their behaviors and performance against: • The leadership competency model of SGS in the areas of innovation, people management and change management • ESG metrics aligned with the Group’s sustainability ambitions, in the areas of energy consumption, sustainable supply chain, diversity, equity and inclusion, employee training, customer satisfaction, integrity The assessment of the CEO is conducted at year end by the Board of Directors, while the assessment of the other members of the Executive Committee is conducted by the CEO and approved by the Remuneration Committee. The assessment leads to a leadership multiplier that can range between 70% and 125%. Settlement vehicles Once the final incentive amount is determined, it is settled 50% in cash and 50% in restricted shares, to strengthen the link between the compensation of executives and the interests of the shareholders. The cash component is paid and the restricted shares are allocated after the shareholders’ approval at the AGM of the following year. The number of restricted shares to be allocated is determined by dividing 50% of the final incentive amount by the average closing share price during the 20-day period following the payment of the dividends after the AGM. They are restricted for a period of three years during which they may not be sold, donated, pledged, or otherwise disposed of to third parties. The Group does not issue new shares to be allocated to employees for equity-based compensation plans, but uses treasury shares instead, acquired through share buyback programs. Detailed information on the overhang and burn rate is disclosed in note 27 of the consolidated financial statements. Clawback provisions A clawback policy applies to any variable remuneration awarded to the members of the Executive Committee. Under this policy, the Company may reclaim the value of any variable incentives paid, in cash or shares, in the following cases: • Any fraud, negligence or intentional misconduct was a significant contributing factor to the Company having to restate all or a portion of its financial statements • A serious violation of the SGS internal regulations and/or Code of Integrity • Any violation of law within the scope of employment at the Company Provisions in case of termination of employment In case of termination of employment during the business year, “bad” leavers (voluntary resignation, termination for cause) lose their award, while “good” leavers (all other termination reasons) receive it on a pro-rata basis for their time of employment during the year. The table below details the rules applicable to the award in the different cases of termination of employment during the business year and between the end of the business year and the next AGM. The table below details the rules applicable to the award in the different cases of termination of employment during the business year and between the end of the business year and the next AGM. Termination reason Last day of employment before 31 December Last day of employment between 31 December and AGM Incentive opportunity (target incentive) Incentive pay-out Payment date Payment vehicle Incentive opportunity (target incentive) Incentive pay-out Payment date Payment vehicle Termination for cause Zero Zero – – Zero Zero – – Resignation Zero Zero – – Full Based on actual performance After AGM approval 100% cash Death or disability Pro-rated on calendar days Based on estimated performance Shortly after the termination date 100% cash Full Based on actual performance Shortly after the termination date 100% cash Change in control or liquidation Pro-rated on calendar days Based on actual performance After AGM approval 100% cash Full Based on actual performance After AGM approval 100% cash Retirement, termination not for cause Pro-rated on calendar days Based on actual performance After AGM approval 100% cash Full Based on actual performance After AGM approval 100% cash 62 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5.6. Long-term variable remuneration The CEO and the other members of the Executive Committee are eligible to a performance-related long-term incentive (the long-term incentive). The long-term incentive is designed to: • Motivate the leadership team to achieve the long-term objectives of the Group • Align their remuneration with the interests of the shareholders The long-term incentive consists of a grant of performance share units (PSUs). The PSUs granted under the long-term incentive vest after a performance period of three years, conditionally upon the achievement of pre- defined performance objectives and subject to continuity of employment of the beneficiaries during the vesting period; at vesting, shares are allocated to the participants according to the performance achievements. The long-term incentive plan is reviewed annually to ensure its alignment with the Group’s business strategy and value to society ambitions. For the 2024-2026 performance period, the long-term incentive plan has been revised to ensure alignment with Strategy 27: Accelerating growth, building trust. Incentive opportunity CEO Other Executive Committee members Target incentive opportunity 167% of base salary 100% of base salary Maximum incentive opportunity 250% of base salary 150% of base salary Performance objectives rTSR vs. TIC main competitors rTSR vs. SLI companies Earnings Per Share (EPS) growth ESG metrics Performance period 3 years: 2024-2026 Purpose Measure the Company’s ability to outperform its four main competitors (ALS, Bureau Veritas, Eurofins, Intertek) Measure the Company’s ability to outperform the 30 largest and most liquid securities in the Swiss equity market Measure the Company’s ability to grow profitably and sustainably Support the Company’s ongoing commitment to advancing ESG initiatives as part of its long-term strategy; align the interests of our leadership with our long-term sustainability goals Definition TSR: (ending stock price – beginning stock price) + sum of all dividends distributed during the three-year performance period Average year-over-year growth of the adjusted basic EPS during the three- year performance period Diversity & Inclusion: % of women in leadership positions Health and safety: Lost Time Incident Rate (LTIR) Environment protection: GHG emissions (each metric accounting for one third of the weighting) Weighting 30% 20% 30% 20% Vesting formula Vesting is based on the ranking of SGS against the peer groups. It is 0% below median, 50% at median, 100% at upper quartile, 150% at top ranking Vesting is based on the Company performance against threshold, target, stretch pre-defined achievement levels Vesting is based on the Company’s performance against pre-defined achievement levels for the three metrics 63 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Malus and clawback provision A malus and clawback policy applies to any long-term incentive grant awarded to the members of the Executive Committee. Under this policy, the Company may forfeit any unvested equity compensation and/or reclaim the value of any vested equity compensation granted under a long-term incentive plan, in the following cases: • Any fraud, negligence or intentional misconduct that was a significant contributing factor in the Company having to restate all or a portion of its financial statements • A serious violation of the SGS internal regulations and/or Code of Integrity • Any violation of law within the scope of employment at the Company Provisions in case of termination of employment In case of termination of employment, all unvested PSUs are as a rule immediately forfeited without value and without any compensation, with the exception of the cases outlined in the table below. Termination reason Vesting rule Vesting time and shares allocation Vesting level Retirement or disability Vesting on a pro-rata basis At regular vesting date Based on actual performance Death Vesting on a pro-rata basis Immediate Based on an estimation of performance by the Board of Directors Corporate transaction or liquidation Full vesting Immediate Based on an estimation of performance by the Board of Directors Other reasons1 Forfeiture – – 1. In case of company-initiated termination not for cause, if the termination date occurs during the last 12 months of the vesting period, and subject to the Board of Directors approval, PSUs unvested at the termination date may vest on a pro-rata basis. 5.7. Timeline of remuneration The following chart outlines the timeline of payment of each remuneration element that was earned in 2024: • The annual base salary is paid during 2024 • The cash portion of the short-term incentive is paid shortly after the 2025 AGM • The share portion of the short-term incentive is allocated in Q2 2025 and will be unblocked in Q2 2028 • The PSUs granted under the long-term incentive in 2022 were earned over the performance period from 2022 to 2024, and vested, subject to performance conditions and continuity of employment, on 1 February 2025; shares will be allocated to the participants in Q1 2025 • The PSUs granted under the long-term incentive in 2024 will be earned over the performance period from 2024 to 2026 and will vest, subject to performance conditions and continuity of employment, in Q1 2027 Timeline of remuneration Timeline (performance period, time of payment) Performance KPIs 2022 Long-term incentive grant Vesting 2023 Long-term incentive grant Vesting Relative TSR (50%) EPS growth (30%) ESG metrics (20%) Group organic sales growth, adjusted operating income margin, free cash flow Role specific organic sales growth, adjusted operating income margin, free cash flow Leadership multiplier 2022 2023 2024 2025 2026 2027 2028 Shareholding Ownership Guideline 2024 Long-term incentive grant Vesting 2024 Short-term incentive Annual base salary and benefits Unblocking 50% in restricted shares 50% in cash 64 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6. Remuneration awarded to the Board of Directors 6.1. AGM vote on remuneration The table below summarizes the vote of the AGM 2024 on the remuneration of the members of the Board of Directors for the mandate AGM 2024 to AGM 2025. AGM Remuneration element Vote type Period Approved amount CHF thousand Actual amount CHF thousand 2024 Aggregate total remuneration Prospective AGM 2024 to AGM 2025 2 700 2 470 The actual remuneration for the mandate AGM 2024 to AGM 2025 was within the approved amount. The table below summarizes the proposed amount for the vote at the 2025 AGM. AGM Remuneration element Vote type Period Proposed amount CHF thousand 2025 Aggregate total remuneration Prospective AGM 2025 to AGM 2026 2 700 6.2. Details of remuneration (audited) Remuneration awarded for the mandate AGM 2024 to AGM 2025 The table below details the remuneration elements and the settlement vehicle of the Directors for the mandate AGM 2024 to 2025. (CHF thousand, gross) Chairmanship Board membership Audit Committee membership Remuneration Committee membership Nomination Committee membership Sustainability Committee membership Total remuneration To be settled in cash To be settled in restricted shares1 Calvin Grieder 665 – – – – – 665 500 165 Sami Atiya – 200 – 40 30 – 270 220 50 Phyllis Ka Yan Cheung – 200 – – – 30 230 180 50 Ian Gallienne – 200 – 30 30 – 260 210 50 Tobias Hartmann – 200 50 – – – 250 200 50 Jens Riedl – 200 – – – – 200 150 50 Kory Sorenson – 200 70 30 – 30 330 280 50 Janet S. Vergis – 200 50 – 15 – 265 215 50 Total 665 1 400 170 100 75 60 2 470 1 955 515 1. Restricted shares were granted during financial year 2024. The table below details the remuneration elements and the settlement vehicle of the Directors for the mandate Annual General Meeting 2023 to 2024. (CHF thousand, gross) Chairmanship Board membership Audit Committee membership Remuneration Committee membership Nomination Committee membership Sustainability Committee membership Total remuneration To be settled in cash To be settled in restricted shares1 Calvin Grieder 665 – – – – – 665 500 165 Sami Atiya 200 – 40 30 – 270 220 50 Phyllis Ka Yan Cheung 200 – – – 30 230 180 50 Ian Gallienne 200 – 30 30 – 260 210 50 Tobias Hartmann 200 50 – – – 250 200 50 Shelby R. du Pasquier 200 – – – – 200 150 50 Jens Riedl 200 – – – – 200 150 50 Kory Sorenson 200 70 30 – 30 330 280 50 Janet S. Vergis 200 50 – – – 250 200 50 Total 665 1 600 170 100 60 60 2 655 2 090 565 1. Restricted shares were granted during financial year 2023. 65 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Remuneration awarded for the financial year 2024 The following table details the remuneration elements granted to each of the directors for their tenure in financial year 2024. It includes both pro-rata temporis elements of remuneration for the mandate AGM 2023 to 2024 and pro-rata temporis elements of remuneration for the mandate AGM 2024 to 2025. The remuneration of the Board of Directors is subject to employer social charges according to Swiss legislation. (CHF thousand, gross) Board retainer Representation fees Committee fees Total remuneration Cash Restricted shares value2 Restricted shares NB Employer social charges Calvin Grieder 668 – – 668 503 165 2 000 11 Sami Atiya 201 – 70 271 221 50 606 23 Phyllis Ka Yan Cheung 201 – 30 231 181 50 606 19 Ian Gallienne 201 – 60 261 211 50 606 22 Tobias Hartmann 201 – 50 251 201 50 606 – Shelby R. du Pasquier1 36 – – 36 36 – – 3 Jens Riedl 201 – – 201 151 50 606 17 Kory Sorenson 201 – 131 332 282 50 606 27 Janet S. Vergis 201 – 58 259 209 50 606 22 Total 2 111 – 399 2 510 1 995 515 6 242 144 1. Until the AGM 2024. 2. Based on the average closing share price of the 20 trading days preceding the grant date. The following table details the remuneration elements granted to each of the directors for their tenure in financial year 2023. It includes both pro-rata temporis elements of remuneration for the mandate AGM 2022 to 2023 and pro-rata temporis elements or remuneration for the mandate AGM 2023 to 2024. (CHF thousand, gross) Board retainer Representation fees Committee fees Total remuneration Cash Restricted shares value3 Restricted shares NB Employer social charges Calvin Grieder 667 – – 667 502 165 2 003 10 Sami Atiya 201 – 70 271 221 50 607 23 Phyllis Ka Yan Cheung 201 – 30 231 181 50 607 19 Paul Desmarais, Jr.1 37 – – 37 37 – – 2 Ian Gallienne 201 – 60 261 211 50 607 22 Tobias Hartmann 201 – 50 251 201 50 607 – Shelby R. du Pasquier 201 – – 201 151 50 607 17 Jens Riedl2 164 – 164 114 50 607 14 Kory Sorenson 201 – 130 331 281 50 607 27 Janet S. Vergis 201 – 50 251 201 50 607 21 Total 2 275 – 390 2 665 2 100 565 6 859 155 1. Until the AGM 2023. 2. As of the AGM 2023. 3. Based on the average closing share price of the 20 trading days preceding the grant date. The overall remuneration paid to the Board of Directors in 2024 is lower than the overall remuneration paid in 2023 because the AGM 2024 appointed eight Board members, while in the previous mandate there were nine. 6.3. Other compensation, loans and credit facilities (audited) In 2024 no other payment was made to any member or former member of the Board of Directors (unchanged from prior year). As at 31 December 2024, no loan, credit or outstanding advance was due to the Group from members or former members of the Board of Directors or related parties (unchanged from prior year). 66 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.4. Shares and options held (audited) The following table shows the shares held by members of the Board of Directors as at 31 December 2024: Name Shares C. Grieder 16,712 S. Atiya 4,032 P. Cheung 1,732 I. Gallienne 1,713 T. Hartmann 1,688 J. Riedl 1,238 K. Sorenson 3,946 J. S. Vergis 1,732 No options were held by members of the Board of Directors as at 31 December 2024. The following table shows the shares held by members of the Board of Directors as at 31 December 2023: Name Shares C. Grieder 14,128 S. Atiya 3,382 P. Cheung 1,082 I. Gallienne 1,082 T. Hartmann 1,082 S.R. du Pasquier 2,257 J. Riedl 607 K. Sorenson 3,207 J. S. Vergis 1,082 No options were held by members of the Board of Directors as at 31 December 2023. 6.5. Gender representation (audited) The following table shows the gender representation in the Board of Directors for the mandate from AGM 2024 to 2025 and for the previous mandate. Period Female Male Number % Number % AGM 2024 to AGM 2025 3 37.5% 5 62.5% AGM 2023 to AGM 2024 3 33.3% 6 66.7% 67 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.6. Other activities (audited) The functions of the members of the Board of Directors in other undertakings in 2024 are detailed in the table below. Name Undertaking Function exercised C. Grieder Givaudan SA Chair of the Board Bühler Group AG Chair of the Board Eranoes Group AG Chair of the Board Carivel7 AG Owner Avenir Suisse Member of the Board of Trustees ETH Zurich – Department of Mechanical & Process Engineering Member of the Advisory Board S. Atiya ABB Ltd Member of the Group Executive Committee and President of ABB’s Robotic & Discrete Automation business Ph. Cheung McDonald’s China CEO Aspen China Fellowship Fellow Aspen Global Leadership Network Member I. Gallienne Groupe Bruxelles Lambert CEO adidas Vice Chairman of the Supervisory Board, Member of the General Committee Imerys Member of the Board, Chairman of the Strategic Committee and Member of the Compensation Committee, Member of the Remuneration Committee Pernod Ricard SA Member of the Board, Member of the Strategic Committee and Member of the Remuneration Committee Carpar SA Member of the Board Compagnie Nationale à Portefeuille SA Member of the Board Financière De La Sambre SA Member of the Board Société Civile du Château Cheval Blanc Member of the Board T. Hartmann Scout24 SE CEO J. Riedl Groupe Bruxelles Lambert Investment Partner GEA Group Member of the Supervisory Board, Member of the Presiding and Sustainable Committee, Member of the Nomination Committee (until April 2024) Sanoptis Member of the Supervisory Board Canyon Koblenz Observer to the Supervisory Board EMarketing Munich Member of the Supervisory Board (until June 2024) K. Sorenson Pernod Ricard SA Member of the Board and Chair of the Remuneration Committee, Member of the Audit Committee Bank Gutmann Member of the Supervisory Board Comgest Chair of the Board of Partners AA Limited Member of the Board and Chair of Audit and Risk Committee Premium Credit Limited Member of the Board and Chair of Audit and Risk Committee J. S. Vergis Teva Pharmaceutical Industries Member of the Board, Chair of Compliance Committee and Member of the Human Resources/Compensation Committee Dentsply Sirona Member of the Board, Chair of the Science & Technology Committee Church and Dwight Company Member of the Board, Chair of the Governance Committee, and Member of the Compensation and Human Capital Committee 68 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The functions of the members of the Board of Directors in other undertakings in 2023 are detailed in the table below. Name Undertaking Function exercised C. Grieder Givaudan SA Chair of the Board Bühler Group AG Chair of the Board Eranoes Group AG Chair of the Board Carivel7 AG Owner Avenir Suisse Member of the Board of Trustees ETH Zurich – Department of Mechanical & Process Engineering Member of the Advisory Board S. Atiya ABB Ltd Member of the Group Executive Committee and President of ABB’s Robotics & Discrete Automation business Ph. Cheung McDonald’s China CEO Aspen China Fellowship Fellow Aspen Global Leadership Network Member I. Gallienne Groupe Bruxelles Lambert CEO adidas Vice Chairman of the Supervisory Board, Member of the General Committee Imerys Member of the Board, Chairman of the Strategic Committee, Member of the Compensation Committee, Member of the Appointments Committee Pernod Ricard SA Member of the Board, Member of the Strategic Committee and Member of the Remuneration Committee Carpar SA Member of the Board Compagnie Nationale à Portefeuille SA Member of the Board Financière De La Sambre SA Member of the Board Société Civile du Château Cheval Blanc Member of the Board Marnix French ParentCo (Webhelp group) Chair of the Board T. Hartmann Scout 24 SE CEO S.R. du Pasquier Lenz & Staehelin Partner Swiss National Bank Member of the Board, Chair of the Risk Committee Pictet and Cie Group SCA Chairman of the Supervisory Board J. Riedl Groupe Bruxelles Lambert Investment Partner GEA Group Member of the Supervisory Board, Member of the Presiding and Sustainable Committee, Member of the Nomination Committee Sanoptis Member of the Supervisory Board Canyon Koblenz Observer to the Supervisory Board SecureSystem Munich Member of the Advisory Board EMarketing Munich Member of the Supervisory Board K. Sorenson Phoenix Group Holdings PLC Member of the Board and Chair of the Remuneration Committee, Member of the Risk and Sustainability Committees Pernod Ricard SA Member of the Board and Chair of the Remuneration Committee, Member of the Audit Committee Bank Gutmann Member of the Supervisory Board Comgest Chair and an independent member of the Board of Partners AA Limited Member of the Board and Chair of Audit and Risk Committee Premium Credit Limited Member of the Board and Chair of Audit and Risk Committee J. S. Vergis Teva Pharmaceutical Industries Member of the Board, Chair of Compliance Committee, Member of the Human Resources/Compensation Committee, and Member of the Nominating and Governance Committee Dentsply Sirona Member of the Board, Chair of the Science & Technology Committee Church and Dwight Company Member of the Board, Chair of Governance Committee, and Member of the Compensation and Human Capital Committee The Pennsylvania State University Biotechnology Advisory Board Chair; Corporate Engagement Advisory Board Vice-Chair 69 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information This section sets out the remuneration that was paid to the Executive Committee as a whole and to the CEO in 2024. All amounts disclosed in this section include the short-term incentive cash amount and restricted shares that will be granted in Q2 2025 with respect to performance in 2024 (disclosure according to the accrual principle). 7.1. AGM votes on remuneration The table below summarizes the votes of the AGM 2024 and of the AGM 2023 pertinent to financial year 2024 and 2025 on the remuneration of the members of the Executive Committee. AGM Remuneration element Vote type Period Approved amount CHF thousand Actual amount CHF thousand 2023 Aggregate fixed remuneration Prospective Calendar year 2024 12 500 10 144 2024 Aggregate short-term variable remuneration Retrospective Performance year 2023 (paid after the 2024 AGM) 4 956 4 956 2024 Aggregate long-term variable remuneration1 Prospective Calendar year 2024 (transition) 12 000 10 280 2024 Aggregate long-term variable remuneration1 Prospective Calendar year 2025 12 956 Will be reported in the 2025 Remuneration Report 2024 Aggregate fixed remuneration Prospective Calendar year 2025 10 500 Will be reported in the 2025 Remuneration Report 1. Value of PSUs at the time of the grant assessed at the maximum possible vesting level under the plan rules (150%). The actual remuneration in 2024 was within the approved amounts, and the statutory additional amount was not made use of accordingly. The table below summarizes the proposed amounts for the votes at the 2025 AGM. AGM Remuneration element Vote type Period Proposed amount CHF thousand 2025 Aggregate short-term variable remuneration Retrospective Performance year 2024 (paid after the 2025 AGM) 10 933 2025 Aggregate long-term variable remuneration1 Prospective Calendar year 2026 13 000 2025 Aggregate fixed remuneration Prospective Calendar year 2026 10 500 1. Value of Performance Share Units at the time of the grant assessed at the maximum possible vesting level under the plan rules (150%). 7.2. Total remuneration (audited) The tables below present all components of the remuneration earned in 2024 and 2023 by the Executive Committee and the CEO. The employer social charges are reported separately in the last column of the table. Total remuneration 2024 (CHF thousand, gross) Total fixed remuneration Total short-term variable remuneration Total remuneration before LTI Total long-term variable remuneration Total remuneration Employer social charges Executive Committee (including CEO)1 Cash (including allowances) 9 078 7 364 16 442 – 16 442 Contributions and benefits in kind 1 066 – 1 066 – 1 066 1 813 Equity – 3 569 3 569 6 853 10 422 – Total 10 144 10 933 21 077 6 853 27 930 1 813 Chief Executive Officer Cash (including allowances) 1 283 1 386 2 669 2 669 – Contributions and benefits in kind 110 – 110 110 114 Equity – 1 386 1 386 2 083 3 469 – Total 1 393 2 772 4 165 2 083 6 248 114 1. 16 FTE (full-time equivalent). 7. Remuneration awarded to the Executive Committee 70 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Total remuneration 2023 (CHF thousand, gross) Total fixed remuneration Total short-term variable remuneration Total remuneration before LTI Total long-term variable remuneration Total remuneration Employer social charges Executive Committee (including CEO)1 Cash (including allowances) 8 726 2 737 11 463 – 11 463 – Contributions and benefits in kind 1 047 – 1 047 – 1 047 1 222 Equity – 2 219 2 219 8 727 10 946 – Total 9 773 4 956 14 729 8 727 23 456 1 222 Chief Executive Officer Cash (including allowances) 1 263 492 1 755 – 1 755 – Contributions and benefits in kind 125 – 125 – 125 156 Equity – 492 492 2 000 2 492 – Total 1 388 984 2 372 2 000 4 372 156 1. 17 FTE (full-time equivalent). 7.3. Fixed remuneration (audited) The table below summarizes the fixed remuneration paid to the Executive Committee and the CEO in 2024. (CHF thousand, gross) Base salary Other cash allowances Contributions to pension plans Other contributions and benefits in kind Total fixed remuneration Executive Committee (including CEO) Cash (including allowances) 7 930 1 148 - - 9 078 Contributions and benefits in kind - - 762 304 1 066 Equity - - - - - Total 7 930 1 148 762 304 10 144 Chief Executive Officer Cash (including allowances) 1 190 93 - - 1 283 Contributions and benefits in kind - - 106 4 110 Equity - - - - - Total 1 190 93 106 4 1 393 The table below summarizes the fixed remuneration paid to the Executive Committee and the CEO in 2023. (CHF thousand, gross) Base salary Other cash allowances Contributions to pension plans Other contributions and benefits in kind Total fixed remuneration Executive Committee (including CEO) Cash (including allowances) 7 753 973 – – 8 726 Contributions and benefits in kind – – 755 292 1 047 Equity – – – – – Total 7 753 973 755 292 9 773 Chief Executive Officer Cash (including allowances) 1 200 63 – – 1 263 Contributions and benefits in kind – – 116 9 125 Equity – – – – – Total 1 200 63 116 9 1 388 71 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 7.4. Short-term variable remuneration (audited) The short-term variable remuneration of the members of the Executive Committee is determined by the achievement of financial targets and by their leadership behaviors. In 2024, the achievement of financial targets at group level, in the businesses and in the regions ranges from 62.9% to 174.3% (2023: 63.8% to 126.7%). The chart below summarizes the 2024 performance achievements against targets for the financial objectives (sales, profit margin, free cash flow) used in the short-term incentive. The overall short-term incentive pay-out amounts to 233.0% of the target incentive opportunity for the CEO (2023: 82.0%) and ranges from 97.1% to 192.2% of the target incentive opportunity for the other members of the Executive Committee (2023: 48.3% to 142.7%). For the purpose of the short-term incentive, targets and performance achievement are measured at constant currency exchange rates. The table below details the 2024 short-term incentive for the CEO. CEO 2024 STI pay-out KPI description Metric Group financial KPIs Pay-out Organic sales growth (%) Adjusted operating income margin on sales (%) Free cash flow* (CHF million) Threshold 4.5% 14.7% 561 Target 6.1% 15.0% 611 Stretch 6.7% 15.5% 661 Actual 7.5% 15.3% 792 Pay-out % 200.0% 161.1% 200.0% Weight 30% 35% 35% Financial KPIs pay-out % 186.4% Leadership multiplier 125.0% Total pay-out % 233.0% Pay-out (CHF thousand, gross) 2 772 *Excluding the impact of CHF 44 million restructuring expenses paid in 2024 The table below details the 2023 short-term incentive for the CEO. CEO 2023 STI pay-out KPI description Group financial KPIs Pay-out Sales (CHF million) NPAT (CHF million) ROIC (organic) (%) FCF (CHF million) Target 6 475 606 26 612 Actual 6 622 553 22 604 Actual vs. target % 102.3% 91.2% 87.5% 98.8% Pay-out % 111.4% 55.8% 37.3% 93.8% Weight 25% 25% 25% 25% Financial KPIs pay-out % 74.6% Leadership multiplier 110% Total pay-out % 82.0% Pay-out (CHF thousand, gross) 984 * Excluding the impact of CHF 44 million restructuring expenses paid in 2024 2024 performance achievements against targets Organic sales growth Group Regions and businesses Adjusted operating income margin Group Regions and businesses Free cash flow* Group Regions Threshold Target Stretch The 2024 Group organic sales growth was 7.5% compared with a target of 6.1%, which corresponds to a pay-out factor of 200%. The regional and business organic sales growth was mixed, with two regions below threshold (0% pay-out factor), two regions and one business above stretch (200% pay-out factor), one region between target and stretch, and two businesses between threshold and target. The 2024 Group AOI margin was 15.3% compared with a target of 15.0%, which corresponds to a pay-out factor of 161%. The regional and business local contribution/business profit margin was above stretch for one region (200% pay- out factor), between target and stretch for two regions, and between threshold and target for two regions and one business. The 2024 Group free cash flow (excluding the impact of restructuring expenses paid in 2024) was CHF 792 million, compared with a target of CHF 611 million, which corresponds to a pay-out factor of 200%. The regional free cash flow was above threshold for all the regions (200% pay-out factor), except one between target and stretch. 72 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information In settlement of the equity portion of the short-term incentive 2024, SGS restricted shares will be allocated to the members of the Executive Committee in Q2 2025, after the approval of the total short-term incentive amount by the AGM (in Q2 2024, 26 914 restricted shares were granted in settlement of the equity portion of the short-term incentive 2023). The number of restricted shares to be allocated is calculated by dividing the equity portion of the short-term incentive by the average closing price of the share during a 20-trading-day period following the payment of the dividends after the AGM, rounded up to the nearest integer, and are restricted for a period of three years. The table below summarizes the short-term variable remuneration awarded to the Executive Committee and the CEO for the 2024 performance year, and its comparison with the incentive opportunity. (CHF thousand, gross) Minimum Target Maximum Actual short-term variable remuneration Executive Committee (including CEO) Cash (including allowances) – 4 500 11 250 7 364 Contributions and benefits in kind – – – – Equity – 1 995 4 988 3 569 Total – 6 495 16 238 10 933 Chief Executive Officer Cash (including allowances) – 595 1 488 1 386 Contributions and benefits in kind – – – – Equity – 595 1 488 1 386 Total – 1 190 2 975 2 772 The total short-term remuneration amount will be submitted for approval to the AGM of 2025, and the settlement for both the cash and the equity part will be implemented shortly after. The table below summarizes the short-term variable remuneration awarded to the Executive Committee and the CEO for the 2023 performance year, and its comparison with the incentive opportunity. (CHF thousand, gross) Minimum Target Maximum Actual short-term variable remuneration Executive Committee (including CEO) Cash (including allowances) – 3 195 7 988 2 737 Contributions and benefits in kind – – – – Equity – 2 500 6 250 2 219 Total – 5 695 14 238 4 956 Chief Executive Officer Cash (including allowances) – 600 1 500 492 Contributions and benefits in kind – – – – Equity – 600 1 500 492 Total – 1 200 3 000 984 The total 2023 short-term remuneration amount was approved by the AGM of 2024, and the settlements for both the cash and the equity part were implemented shortly after. The increase in short-term variable remuneration compared with 2023 reflects the higher pay-out achieved against the financial targets in 2024 compared with 2023. 73 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 7.5. Long-term variable remuneration 7.5.1. 2024-2026 PSUs long-term incentive grant (audited) In 2024, the Group implemented a long-term incentive plan for the performance period 2024-2026. Under the long-term incentive plan 2024- 2026, a total of 82 831 PSUs were granted to the members of the Executive Committee; this includes 25 183 PSUs granted to the CEO. The PSUs awarded under the long-term incentive 2024-2026 vest after the three-year performance period 2024-2026, in early 2027, subject to the performance conditions (rTSR, EPS growth, ESG metrics; see Section 5.6 of this report for detailed explanations on the performance conditions) and to continuity of employment of the beneficiaries during the vesting period. The number of PSUs granted is calculated dividing the value of the grant, as disclosed in Section 5.6 of this report, by the average closing price of the share during a 20-trading-day period preceding the grant date, rounded up to the nearest integer. In 2023, the Group implemented a long-term incentive plan for the performance period 2023-2025. Under the long-term incentive plan 2023- 2025, a total of 105 045 PSUs were granted to the members of the Executive Committee; this includes 24 074 PSUs granted to the CEO. The table below summarizes the value of the long-term variable remuneration awarded to the Executive Committee and the CEO in 2024. Number of PSUs granted Total value of the grant1 (CHF thousand) Executive Committee (including CEO) Cash (including allowances) – – Contributions and benefits in kind – – Equity 82 831 6 853 Total 82 831 6 853 Chief Executive Officer Cash (including allowances) – – Contributions and benefits in kind – – Equity 25 183 2 083 Total 25 183 2 083 1. The value of the grant for the equity part is defined as the number of PSUs granted multiplied by the average closing price of the share during a 20-trading-day period preceding the grant date. The table below summarizes the value of the long-term variable remuneration awarded to the Executive Committee and the CEO in 2023. Number of PSUs granted1 Total value of the grant2 (CHF thousand) Executive Committee (including CEO) Cash (including allowances) – – Contributions and benefits in kind – – Equity 105 045 8 727 Total 105 045 8 727 Chief Executive Officer Cash (including allowances) – – Contributions and benefits in kind – – Equity 24 074 2 000 Total 24 074 2 000 1. After the share split implemented on 12 April 2003. 2. The value of the grant for the equity part is defined as the number of PSUs granted multiplied by the average closing price of the share during a 20-trading day period preceding the grant date. 74 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 7.5.2. Vesting of the 2022-2024 PSUs long-term incentive plan On 1 February, 2025, the 2022-2024 PSUs and long-term incentive plan vested, according to their performance conditions: • 80% rTSR of SGS against seven listed competitors in the TIC sector (ALS, Applus+, Bureau Veritas, Eurofins, Intertek, Mistras, Team) • 20% ESG metrics (Women in leadership, LTIR, CO2 emissions intensity) The assessment of the performance conditions has been performed by the Board of Directors, based on the recommendation of the Remuneration Committee. The charts below show the achievements on rTSR and ESG metrics. Relative TSR 8th 7th 5th 4th 3rd 2nd 1st Vesting % Relative TSR Ranking 150% 125% 100% 75% 50% 25% 0% 6th ESG metrics Vesting % 150% 125% 100% 75% 50% 25% 0% 2 or all 3 metrics below target 2 metrics at target all 3 metrics at target (or 2 metrics above target) all 3 metrics at max The table below presents the details of the vesting. Weight Vesting level rTSR 80% 0% ESG metrics GHG emissions 20% 150% LTIR Women in leadership Total 100% 30% The table below details the vesting of the 2022-2024 PSUs and long-term incentive plan for the Executive Committee and the former CEO. Number of PSUs granted in 2022 Value at grant1 (CHF thousand) Number of PSUs outstanding at vesting date1 Number of shares allocated Value at vesting2 (CHF thousand) Executive Committee (including CEO) Cash (including allowances) – – – – – Contributions and benefits in kind – – – – – Equity 84 125 8 757 54 188 16 260 1 439 Total 84 125 8 757 54 188 16 260 1 439 Chief Executive Officer3 Cash (including allowances) – – – – – Contributions and benefits in kind – – – – – Equity – – – – – Total – – – – – 1. Based on the average closing share price of the 20 trading days preceding the grant date. 2. Based on the closing share price at vesting date. 3. The CEO was not present in 2022 and therefore did not receive any grant of PSUs 75 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 7.6. Remuneration mix (audited) In 2024, the part of remuneration at risk (short-term incentive and long-term incentive) for the CEO represents 80% of the total remuneration (2023: 71%); the part of remuneration settled in equity instruments (restricted shares and PSUs) represents 57% of the total remuneration (2023: 60%). For the other members of the Executive Committee, the part of remuneration at risk represents, on average, 65% of the total remuneration (2023: 62%); the part of remuneration settled in equity instruments represents, on average, 36% of the total remuneration (2023: 49%). The part of the fixed remuneration linked to benefits is not considered in this analysis. The charts below show the remuneration mix for the CEO and for the other members of the Executive Committee in 2024 and 2023. Base salary (cash) 2023 2024 2023 2024 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 80 90 100 Short-term incentive (cash) Short-term incentive (restricted shares) Long-term incentive (PSUs) Remuneration mix of the CEO and other Executive Committee members (%) CEO Other Executive Committee members (on average) 7.7. Other compensation, loans and credit facilities (audited) According to the legislation in force in their countries of employment, severance payments for a total amount of CHF 1 278 000 were made in 2024 to two members of the Executive Committee who left the Group in 2024, (2023: severance payment for a total amount of CHF 194 000 to one member of the Executive Committee), according to the legislation in force in his country of employment. As at 31 December 2024, no loan, credit or outstanding advance was due to the Group from members or former members of the Executive Committee or related parties (unchanged from prior year). 7.8. Shares and options held (audited) The following table shows the shares and restricted shares held by Executive Committee members as at 31 December 2024: Name Corporate responsibility Restricted shares Shares G. Picaud Chief Executive Officer 192 920 T. Abasov Head of Eastern Europe, Middle East & Africa 5 001 22 964 S. Du Head of Asia Pacific 4 211 3 668 D. Govender Head of North America 4 653 13 651 E. Jokubauskas Head of Industries & Environment and Natural Resources – 2 504 C. Ly Wa Hoi Head of Connectivity & Products and Health & Nutrition 3 982 7 644 J. McDonald Head of Business Assurance 5 356 10 023 R. Navazo Head of Latin America – – M. Oesch Group General Counsel – – D. Plaza Chief Information Officer – – M. Reid Head of Europe 4 590 40 416 J. Roberts Chief People Officer – – M. Vlatchkova Chief Financial Officer – – No options were held by Executive Committee members as at 31 December 2024. 76 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The following table shows the shares and restricted shares held by former senior management as at 31 December 2023: Name Corporate responsibility Restricted shares Shares F. Ng 14 726 95 000 G. Picaud – 500 O. Merkt 3 001 8 750 7.9. Gender representation (audited) The following table shows the gender representation in the Executive Committee as at 31 December 2024 and 31 December 2023. Period Female Male Number % Number % 31 December 2024 2 15.4% 11 84.6% 31 December 2023 2 12.5% 14 87.5% 7.10. Other activities (audited) The functions of the members of the Executive Committee in other undertakings in 2024 are disclosed in the table below. Name Undertaking Function exercised G. Picaud Danone SA Member of the Board of Directors and Chair of the Audit Committee Conseillers du Commerce Extérieur de la France (CCEF) Member of the Committee T. Abasov – – S. Du – – D. Govender – – E. Jokubauskas – – C. Ly Wa Hoi – – J. McDonald – – R. Navazo – – M. Oesch Cocoa Horizons Foundation Member of the Board of Directors D. Plaza – – M. Reid – – J. Roberts – – M. Vlatchkova – – The functions of the members of the former senior management in other undertakings in 2023 are detailed in the table below. Name Undertaking Function exercised F. Ng Logitech SA Member of the Board of Directors and Chair of the Compensation Committee O. Merkt – – G. Picaud Danone SA Member of the Board of Directors and Chair of the Audit Committee Conseillers du Commerce Extérieur de la France (CCEF) Member of the Committee 77 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information PricewaterhouseCoopers SA, Avenue Giuseppe-Motta 50, 1202 Genève Téléphone : +41 58 792 91 00, www.pwc.ch PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Report of the statutory auditor to the General Meeting of SGS SA, Geneva Report on the audit of the remuneration report Opinion We have audited the remuneration report of SGS SA (the Company) for the year ended 31 December 2024. The audit was limited to the information pursuant to article 734a-734f of the Swiss Code of Obligations (CO) in the tables marked 'audited' in sections 6 and 7 (pages 65 to 77) of the remuneration report. In our opinion, the information pursuant to article 734a-734f CO in the remuneration report for the tables marked 'audited' in sections 6 and 7 complies with Swiss law and the Company’s articles of incorporation. Basis for opinion We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the remuneration report' section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the tables marked 'audited' in the remuneration report, the consolidated financial statements, the financial statements and our auditor’s reports thereon. Our opinion on the remuneration report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the remuneration report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the remuneration report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board of Directors’ responsibilities for the remuneration report The Board of Directors is responsible for the preparation of a remuneration report in accordance with the provisions of Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a remuneration report that is free from material misstatement, whether due to fraud or error. It is also charged with structuring the remuneration principles and specifying the individual remuneration components. Auditor’s responsibilities for the audit of the remuneration report Our objectives are to obtain reasonable assurance about whether the information pursuant to article 734a-734f CO is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this remuneration report. 78 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2 SGS SA | Report of the statutory auditor to the General Meeting As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement in the remuneration report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. PricewaterhouseCoopers SA Guillaume Nayet Mario Berckmoes Licensed audit expert Licensed audit expert Auditor in charge Geneva, 10 February 2025 79 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Financial statements Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Construction Site Inspection, Portugal 80 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. Financial and business Highlights 82 2. SGS Group consolidated 86 financial statements Consolidated income statement 86 Consolidated statement of comprehensive income 86 Consolidated statement of financial position 87 Consolidated statement of cash flows 88 Consolidated statement of changes in equity 89 Notes to consolidated financial statements 90 1. Activities of the Group 90 2. Significant accounting policies and exchange rates 90 3. Segment information 96 4. Sales from contracts with customers 98 5. Other operating expenses 99 6. Financial income 99 7. Financial expenses 99 8. Taxes 100 9. Earnings per share and dividend per share 101 10. Acquisitions and divestments 102 11. Property, plant and equipment 103 12. Right-of-use assets and lease liabilities 104 13. Goodwill 105 14. Other intangible assets 106 15. Other non-current assets 107 16. Trade receivables 107 17. Other receivables and prepayments 108 18. Cash and cash equivalents 108 19. Cash flow statement 108 20. Financial risk management 109 21. Share capital and treasury shares 113 22. Loans and other financial liabilities 114 23. Defined benefit obligations 115 24. Provisions 121 25. Trade and other payables 121 26. Contingent liabilities 121 27. Equity compensation plans 122 28. Related-party transactions 123 29. Significant shareholders 124 30. Approval of financial statements 124 31. Subsequent events 124 Report on the audit of the 125 consolidated financial statements 3. SGS SA financial statements 130 Income statement 130 Statement of financial position 131 Notes 132 1. Significant accounting policies 132 2. Subsidiaries 132 3. Corporate bonds 132 4. Total equity 133 5. Share capital 133 6. Financial income and financial expenses 134 7. Extraordinary losses 134 8. Guarantees and comfort letters 134 9. Remuneration 134 10. Shares and options held by members 134 of governing bodies 11. Significant shareholders 135 12. Approval of financial statements and 135 subsequent events Report on the audit of the 136 financial statements 4. Historical Data 140 SGS Group – five-year statistical data 140 consolidated income statements SGS Group – five-year statistical data 141 consolidated statements of financial position SGS Group – five-year statistical share data 142 SGS Group share information 142 Closing prices for SGS and the SMI 2023-2024 143 5. List of significant subsidiaries 144 6. Alternative performance 146 measures 81 SGS | 2024 Integrated Report 1. Financial and business highlights Financial review (CHF million) 2024 2023 Change in % Change in organic1 % Sales 6 794 6 622 2.6 7.5 Adjusted operating income1 1 040 971 7.1 14.0 Adjusted operating income margin1 15.3% 14.7% Operating income (EBIT) 904 857 5.5 Operating income margin 13.3% 12.9% Profit attributable to equity holders of SGS SA 581 553 5.1 Basic EPS (CHF) 3.10 3.00 3.3 Free cash flow1 748 604 23.8 Return on invested capital1 24% 22% Net debt1 2 670 2 839 • Sales reached a record level of CHF 6 794 million in 2024, up 2.6% compared to prior year. A strong organic¹ growth of 7.5% was delivered across all operations, and more than offset the adverse foreign exchange effect of -4.8%. The successful M&A program relaunch resulted in 11 acquisitions contributing to growth in 2024, partially compensating 2023 disposals and resulting in a net scope effect of -0.1%. • Adjusted operating income¹ reached CHF 1 040 million, an increase of 7.1% compared to prior year. The adjusted operating income margin¹ on sales improved by 60 basis points, to 15.3%. Full speed execution of Strategy 27 resulted in CHF 50 million savings already accounted for (70 basis points margin improvement), while negative foreign exchange effect reduced in comparison to prior year to 30 basis points. • Profit attributable to equity holders was CHF 581 million, an increase of 5.1%, despite restructuring costs of CHF 82 million. It resulted in a basic earnings per share of CHF 3.10, against CHF 3.00 in 2023. • Free cash flow¹ generation was outstanding, up 23.8% to reach CHF 748 million. It marked a significant improvement compared to CHF 604 million in prior year, driven by lower net working capital requirements and focused cash allocation. • Net debt¹ at 31 December 2024 amounted to CHF 2 670 million including lease liabilities, a decrease of CHF 169 million compared to December 2023. It led to a reduction in leverage¹, from x2.0 to x1.8. 1. Refer to alternative performance measures of this report. Sales in CHF million Leverage Net debt/Adjusted EBITDA Adjusted operating income margin in % of sales Free cash flow in CHF million 2022 2023 2024 6 794 6 642 6 622 2022 2023 2024 15.3% 15.4% 14.7% 2022 2023 2024 748 481 604 39% 49% 62% 2022 2023 2024 1.8 1.9 2.0 Cash conversion x x x 82 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Business highlights Testing & Inspection: Industries & Environment (CHF million) 2024 2023 Sales 2 261 2 190 Total change 3.2% of which organic1 8.3% of which scope –0.2% of which FX –4.9% Adjusted operating income1 287 248 Adjusted operating income margin1 12.7% 11.3% Testing & Inspection: Natural Resources (CHF million) 2024 2023 Sales 1 612 1 583 Total change 1.8% of which organic1 7.6% of which scope 0.0% of which FX –5.8% Adjusted operating income1 238 228 Adjusted operating income margin1 14.8% 14.4% Delivered an organic growth of 8.3% and an adjusted operating income margin of 12.7%: • Continued double-digit growth in Environment boosted by PFAS with strong performance in North America and Europe • Double-digit growth in Safety services supported by increased demand for global safety solutions • High single-digit growth in Projects & Advisory driven by large railway and mining projects in Latin America and supply chain for Eastern Europe, Middle East & Africa • Continued strong growth in Industrial Testing partly offset by completion of low-margin contracts in non-destructive testing Delivered an organic growth of 7.6% and an adjusted operating income margin of 14.8%: • Minerals boosted by strong trade and double-digit growth in critical battery metals testing in the Americas • High single-digit growth in Oil, Gas and Chemicals supported by inspection and laboratory testing services • Strong growth in Agriculture testing and inspection services, despite slowdown in Europe from the new crop season • Strong momentum for services supporting the energy transition 1. Refer to alternative performance measures of this report. 83 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Testing & Inspection: Connectivity & Products (CHF million) 2024 2023 Sales 1 282 1 246 Total change 2.9% of which organic1 8.2% of which scope –0.7% of which FX –4.6% Adjusted operating income1 268 262 Adjusted operating income margin1 20.9% 21.0% Testing & Inspection: Health & Nutrition (CHF million) 2024 2023 Sales 878 857 Total change 2.5% of which organic1 5.2% of which scope 0.9% of which FX –3.6% Adjusted operating income1 94 80 Adjusted operating income margin1 10.7% 9.3% Delivered a strong organic growth of 8.2% and an adjusted operating income margin of 20.9%: • High single-digit growth in Connectivity driven by product safety in Asia Pacific and wireless in North America • Double-digit growth in Softlines led by strong volumes and sustainability • High single-digit growth in Hardlines fueled by new regulations and capabilities expansion • Strong organic growth in Government Services in Eastern Europe, Middle East & Africa and Asia Pacific Delivered an organic growth of 5.2% and an adjusted operating income margin of 10.7%: • Double-digit organic growth in Food with strong performance in all markets supported by regulation and food safety • Strong recovery in Pharma in H2 driven by bio-safety and bio-analysis testing in Europe and Asia Pacific • Cosmetics delivered solid performance supported by recovery in North America and Europe in H2 • Expansion of laboratory activities in Food, Pharma and Cosmetics, in particular in North America 1. Refer to alternative performance measures of this report. 84 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Certification: Business Assurance (CHF million) 2024 2023 Sales 761 746 Total change 2.0% of which organic1 6.2% of which scope 0.0% of which FX –4.2% Adjusted operating income1 153 153 Adjusted operating income margin1 20.1% 20.5% 1. Refer to alternative performance measures of this report. Delivered an organic growth of 6.2% and an adjusted operating income margin of 20.1%: • Double-digit growth in Certification, supported by medical devices and digital trust • Double-digit growth in ESG, driven by non-financial reporting assurance, social audits and greenhouse gas emissions verification • Temporary slowdown in Training in Asia Pacific • Consulting impacted by a high comparable 85 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Consolidated Income Statement For the years ended 31 December (CHF million) Notes 2024 2023 Sales 4 6 794 6 622 Salaries and wages –3 427 –3 316 Subcontractors’ expenses –414 –400 Depreciation, amortization and impairment 11 to 14 –476 –545 Gain on business disposals 10 – 7 Other operating expenses 5 –1 573 –1 511 Operating income (EBIT)1 3 904 857 Financial income 6 34 29 Financial expenses 7 –94 –86 Share of profit of associates and joint ventures 3 2 Profit before taxes 847 802 Taxes 8 –222 –205 Profit for the period 625 597 Profit attributable to: Equity holders of SGS SA 581 553 Non-controlling interests 44 44 Basic earnings per share (in CHF) 9 3.10 3.00 Diluted earnings per share (in CHF) 9 3.09 2.99 1. Refer to note 3 for analysis of non-recurring items. Consolidated statement of comprehensive income For the years ended 31 December (CHF million) Notes 2024 2023 Actuarial (losses)/gains on defined benefit plans 23 –3 50 Income tax on actuarial (losses)/gains 8 2 –8 Items that will not be subsequently reclassified to income statement –1 42 Exchange differences 12 –238 Items that may be subsequently reclassified to income statement 12 –238 Other comprehensive income/(loss) for the period 11 –196 Profit for the period 625 597 Total comprehensive income for the period 636 401 Attributable to: Equity holders of SGS SA 590 364 Non-controlling interests 46 37 2. SGS Group consolidated financial statements 86 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Consolidated statement of financial position At 31 December (CHF million) Notes 2024 2023 Assets Non-current assets Property, plant and equipment 11 837 823 Right-of-use assets 12 548 506 Goodwill 13 1 783 1 636 Other intangible assets 14 304 275 Investments in joint ventures, associates and other companies 19 16 Deferred tax assets 8 213 185 Other non-current assets 15 199 191 Total non-current assets 3 903 3 632 Current assets Assets classified as held for sale 11 17 – Inventories 55 57 Unbilled sales and work in progress 4 247 223 Trade receivables 16 991 940 Other receivables and prepayments 17 217 213 Current tax assets 109 127 Cash and cash equivalents 18 1 210 1 569 Total current assets 2 846 3 129 Total assets 6 749 6 761 Equity and liabilities Capital and reserves Share capital 21 8 7 Reserves 844 723 Treasury shares –55 –271 Equity attributable to equity holders of SGS SA 797 459 Non-controlling interests 80 69 Total equity 877 528 Non-current liabilities Loans and other financial liabilities 22 2 700 3 040 Lease liabilities 12 409 384 Deferred tax liabilities 8 73 73 Defined benefit obligations 23 64 66 Provisions 24 101 91 Total non-current liabilities 3 347 3 654 Current liabilities Trade and other payables 25 624 634 Contract liabilities 4 261 221 Current tax liabilities 186 176 Loans and other financial liabilities 22 612 841 Lease liabilities 12 159 143 Provisions 24 72 41 Other creditors and accruals 611 523 Total current liabilities 2 525 2 579 Total liabilities 5 872 6 233 Total equity and liabilities 6 749 6 761 87 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Consolidated statement of cash flows For the years ended 31 December (CHF million) Notes 2024 2023 Profit for the period 625 597 Non-cash and non-operating items 19.1 799 824 Decrease/(increase) in working capital 19.2 28 –55 Taxes paid –228 –243 Cash flow from operating activities 1 224 1 123 Purchase of property, plant and equipment and other intangible assets –251 –298 Disposal of property, plant and equipment and other intangible assets 12 15 Acquisition of businesses 10 –193 –12 Proceeds from disposal of businesses – 22 Cash paid on other non-current assets –3 –1 Proceeds received from investments in joint ventures, associates and other companies 1 8 Interest received 37 24 Proceeds from marketable securities 4 – Cash flow used by investing activities –393 –242 Dividends paid to equity holders of SGS SA –207 –590 Dividends paid to non-controlling interests –40 –44 Transaction with non-controlling interests – –34 Cash paid on treasury shares –50 –10 Proceeds from corporate bonds 19.3 – 500 Repayment of corporate bonds 19.3 –250 –501 Interest paid –98 –82 Payment of lease liabilities 19.3 –176 –178 Proceeds from borrowings 19.3 7 105 Repayment of borrowings 19.3 –380 –5 Cash flow used by financing activities –1 194 –839 Effects of exchange rate changes on cash and cash equivalents 4 –96 (Decrease)/increase in cash and cash equivalents –359 –54 Cash and cash equivalents at beginning of year 1 569 1 623 (Decrease)/increase in cash and cash equivalents –359 –54 Cash and cash equivalents at end of year 18 1 210 1 569 88 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Consolidated statement of changes in equity For the years ended 31 December Attributable to: (CHF million) Share capital Treasury shares Share- based payment reserve Cumulative translation adjustments Cumulative (losses)/gains on defined benefit plans net of tax Retained earnings and Group reserves Equity holders of SGS SA Non- controlling interests Total equity Balance at 1 January 2023 7 –279 144 –1 485 –205 2 500 682 81 763 Profit for the period – – – – – 553 553 44 597 Other comprehensive income for the period – – – –231 42 – –189 –7 –196 Total comprehensive income for the period – – – –231 42 553 364 37 401 Dividends paid – – – – – –590 –590 –44 –634 Share-based payments – – 24 – – – 24 – 24 Movement in non-controlling interests – – – – – –25 –25 –5 –30 Movement in treasury shares – 8 –4 – – – 4 – 4 Balance at 31 December 2023 7 –271 164 –1 716 –163 2 438 459 69 528 Balance at 1 January 2024 7 –271 164 –1 716 –163 2 438 459 69 528 Profit for the period – – – – – 581 581 44 625 Other comprehensive income for the period – – – 10 –1 – 9 2 11 Total comprehensive income for the period – – – 10 –1 581 590 46 636 Dividends distributed1 – – – – – –590 –590 –40 –630 Scrip effect on dividend distributed1 1 – – – – 383 384 – 384 Share-based payments – – 19 – – – 19 – 19 Movement in non-controlling interests – – – – – –18 –18 5 –13 Cancellation of treasury shares2 – 250 – – – –250 – – – Movement in treasury shares – –34 –34 – – 21 –47 – –47 Balance at 31 December 2024 8 –55 149 –1 706 –164 2 565 797 80 877 1. Refer to alternative performance measures of this report. On 22 April 2024, SGS announced that 64.87% of the dividend for the financial year 2023 was elected to be paid in the form of new SGS shares, while the remaining 35.13% was to be paid out in cash. On 25 April 2024, the 2023 dividend, totalling CHF 590 million, was distributed as follow: – CHF 207 million in cash – CHF 383 million in new shares. 4 964 934 new SGS shares were created, generating an increase of share capital of CHF 0.2 million, as disclosed in note 21. 2. On 30 August 2024, 2 837 475 shares were cancelled (CHF 250 million). 89 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Notes to consolidated financial statements 1. Activities of the Group SGS SA and its subsidiaries (‘the Group’) operate around the world under the name SGS. The Group head office is located in Geneva, Switzerland. SGS is the global leader in testing, inspection and certification (TIC) services supporting international trade in agriculture, minerals, petroleum and consumer products. These services are provided to governments, international institutions and customers engaged in the industrial, environmental and life science sectors. 2. Significant accounting policies and exchange rates Basis of preparation of the financial statements The consolidated financial statements of the Group are stated in millions of Swiss Francs (CHF million). They are prepared from the financial statements of the individual companies within the Group with all significant companies having a year end of 31 December 2024. The consolidated financial statements comply with the accounting and reporting requirements of the IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB) and Swiss law. The accounting conventions and accounting policies are the same as those applied in the 2023 consolidated financial statements, except for the Group’s adoption of new IFRSs effective 1 January 2024. Several new amendments and interpretations were adopted effective 1 January 2024 but have no material impact on the Group’s consolidated financial statements. There are no IFRS standards or interpretations which are not yet effective and which would be expected to have a material impact on the Group. The financial statements are prepared on an accruals basis and under the historical cost convention, modified as required for the revaluation of certain financial instruments. Scrip dividend The company’s Annual General Meeting held on 26 March 2024, had offered its shareholders the possibility to receive the 2023 dividend in cash or in new SGS shares. Final terms were announced on 22 April 2024: • The scrip dividend take-up rate was 64.87% with the remaining 35.13% paid out in cash • The reference share price was of CHF 82.00 and discount rate was 6% leading to a distribution value of CHF 77.08 • 4 964 934 new shares were created Delivery of the new shares and payment of the total CHF 207 million cash dividend took place on 25 April 2024. Basis of consolidation Subsidiaries The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Group. Control is achieved when the Group: • Has power over the investee • Is exposed, or has the right, to variable return from its involvement with the investee; and • Has the ability to use its power to affect its return The Company reassesses whether or not the Group controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. The principal operating companies of the Group are listed on pages 144 to 145. Non-controlling interests Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Initially they are measured at the non-controlling interest’s proportionate share of the fair value of the acquiree’s identifiable net assets. Subsequent to the acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Associates Associates are entities over which the Group has significant influence but no control, or joint control, over the financial and operating policies. The consolidated financial statements include the Group’s share of associates’ earnings on an equity accounting basis from the date that significant influence commences until the date that significant influence ceases. Joint ventures A joint venture is a contractual arrangement over which the Group exercises joint control with partners and where the parties have rights to the net assets of the arrangement. The consolidated financial statements include the Group’s share of the earnings and net assets on an equity accounting basis of joint ventures that it does not control, effective from the date that joint control commences until the date that joint control ceases. Joint operations A joint operation is an arrangement whereby the parties that have joint control have separable specific rights to the assets and liabilities within the arrangement. When a group entity undertakes its activities under joint operations, the Group as a joint operator recognizes in relation to its interest in a joint operation: • Its assets, including its share of any assets held jointly • Its liabilities, including its share of any liabilities incurred jointly • Its revenue from the sale of its share of the output arising from the joint operation • Its share of the revenue from the sale of the output by the joint operation; and • Its expenses, including its share of any expenses incurred jointly Investments in companies not accounted for as subsidiaries, associates or jointly controlled entities Investments in companies not accounted for as subsidiaries, associates or jointly controlled entities (normally below 20% shareholding levels) are stated at fair value through profit and loss. Dividends received from these investments are included in financial income. Transactions eliminated in consolidation All intra-group balances and transactions, and any unrealized gains and losses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains and losses arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group’s interest in those entities. 90 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Foreign currency transactions Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the foreign exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the period or in previous financial statements, are recognized in the income statement. Consolidation of foreign companies All assets and liabilities of foreign companies that are consolidated are translated using the exchange rates in effect at the balance sheet date. Income and expenses are translated at the exchange rate at the average exchange rate for the year, or at the rate on the date of the transaction for significant items. Translation differences resulting from the application of this method are recognized in other comprehensive income and reclassified to profit or loss on disposal. Average exchange rates are used to translate the cash flows of foreign subsidiaries in preparing the consolidated statement of cash flows. Sales recognition IFRS 15 Revenue from Contracts with Customers establishes a five-step model to account for sales arising from contracts with customers. Under IFRS 15, sales are recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring services to a customer. The standard requires entities to exercise judgment, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The Group recognizes sales based on two main models: services transferred at a point in time and services transferred over time: • The majority of SGS’ sales are transferred at a point in time and recognized upon completion of performance obligations and measured according to the transaction price agreed in the contract. Once services are rendered, e.g. a report issued, the customer is invoiced and payment is due • Services transferred over time mainly concern long-term contracts, where sales are recognized based on the measure of progress. When the Group has a right to consideration from a customer at the amount corresponding directly to the customer’s value of the performance completed to date, the Group recognizes sales in the amount to which it has a right to invoice. In all other situations, the measure of progress is either based on observable output methods (usually the number of tests or inspections performed) or based on input methods such as the time incurred to date relative to the total expected hours to the satisfaction of the performance obligation. These invoices are usually issued per contractually agreed installments and prices. Payments are due upon invoicing Segment information In line with Strategy 27: Accelerating growth, building trust, the Group changed its operating segments in 2024, with Testing & Inspection and Business Assurance results now being reported separately. This change reflects the way the Group chief operating decision maker (i.e. the Executive Committee) currently reviews the operating results and allocates resources. All segment sales reported are from external customers. Segment sales and operating income are attributed to countries based on the location in which the services are rendered. Capital additions represent the total cost incurred to acquire land, buildings and equipment as well as other intangible assets. Goodwill In the case of business acquisitions, the acquired identifiable assets, liabilities and contingent liabilities are recorded at fair value. The difference between the purchase price and the fair value is classified as goodwill and recorded in the statement of financial position as an intangible asset. Goodwill arising from business combinations is measured at cost less any accumulated impairment losses. The goodwill is allocated to a cash-generating unit or a group of cash-generating units (CGUs), that are expected to benefit, among others, from the synergies of the business combination. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected amounts recognized at that date. Goodwill arising on the acquisition of a foreign entity is recorded in the relevant foreign currency and is translated using the end of period exchange rate. On disposal of part or all of a business that was previously acquired, and which gave rise to the recording of acquisition goodwill, the relevant amount of goodwill is included in the determination of the gain or loss on disposal. Goodwill acquired as part of business combinations is tested for possible impairment annually and whenever events or changes in circumstances indicate their value may not be fully recoverable. For the purpose of impairment testing, the Group has adopted a uniform method for assessing goodwill recognized under the acquisition method of accounting. These assets are allocated to a cash generating unit or a group of cash generating units (CGU) which are expected to benefit from the business combination. The recoverable amount of a CGU or group of CGUs is determined through a value-in-use calculation. If the value-in-use of the CGU or group of CGUs is less than the carrying amount of its net operating assets, then a fair value less costs to sell valuation is also performed with the recoverable amount of the CGU or the group of CGUs being the higher of its value-in-use and the fair value less costs to sell. The key assumptions for the value-in-use calculations are those regarding the discount rates, growth rates, operating margins and expected changes to selling prices or direct costs during the period. Pre-tax discount rates used are based on the Group’s weighted average cost of capital, adjusted for specific risks associated with the CGUs or group of CGUs’ cash flow projections. The growth rates are based on industry growth forecasts. Expected changes in selling prices and direct costs are based on past practices and expectations of future changes in the market. For all CGUs or groups of CGUs, a value-in-use calculation is performed using cash flow projections covering the next five years and including a terminal growth assumption. These cash flow projections take into account the most recent financial results and outlook approved by management. If the recoverable amount of the CGU or of the group of CGUs is less than the carrying amount of the unit’s net operating assets, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period. Even if the initial accounting for an intangible asset acquired in the reporting period is only provisional, this asset is tested for impairment in the year of acquisition. 91 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Property, plant and equipment Land is stated at historical cost and is not depreciated. Buildings and equipment are stated at historical cost less accumulated depreciation. Subsequent expenditures are capitalized only if they increase the future economic benefits embodied in the related item of property and equipment. All other expenditures are expensed as incurred. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: • Buildings 12–40 years • Machinery and equipment 5–10 years • Other tangible assets 5–10 years Right-of-use assets The Group recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses. They are adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred and lease payments made at or before the commencement date, less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. Lease liabilities At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The Group elected to use the practical expedient to account for each lease component and any non-lease components as a single lease component. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. In the case that the implicit rate cannot be readily determined, the Group uses an incremental borrowing rate considering the country and the lease duration. The rate is estimated by the combination of the reference rate, the financing spread and any asset-specific adjustment when required. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interests and reduced for the lease payments made. Subsequently, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset. The Group applies the short-term lease and low-value recognition exemptions. Lease payments on short-term leases and leases of low-value assets are recognized as expenses on a straight-line basis over the lease term. Other intangible assets Intangible assets, including software, licenses, trademarks and customer relationships are capitalized and amortized on a straight- line basis over their estimated useful lives, normally not exceeding 20 years. The following useful lives are used in the calculation of amortization: • Trademarks 5–20 years • Customer relationships 2–20 years • Computer software 3–5 years Other intangible assets acquired as part of an acquisition of a business are capitalized separately from goodwill if their fair value can be measured reliably. Internally generated intangible assets are recognized if the asset created can be identified, it is probable that future economic benefits will be generated from it, the related development costs can be measured reliably and sufficient financial resources are available to complete the development. These assets are amortized on a straight-line basis over their useful lives, which usually do not exceed five years. All other development costs are expensed as incurred. Impairment of assets excluding goodwill At each balance sheet date, or whenever there is an indication that an asset may be impaired, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether they have suffered an impairment loss. If indications of impairment are present, the assets are tested for impairment. If impaired, the carrying value of the asset is reduced to its recoverable value. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the CGU to which the asset belongs. The recoverable amount of an asset is the greater of the fair value less cost of sale and its value-in-use. In assessing its value-in-use, the pre-tax estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time-value of money and the risks specific to the asset. Reversal of impairment losses Where an impairment loss on assets other than goodwill subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but not in excess of the carrying amount that would have been recorded had no impairment loss been recognized. A reversal of an impairment loss is recognized as income immediately. Trade receivables Trade receivables are recognized and carried at original invoice amount less an allowance for any non-collectible amounts. An expected credit loss allowance is made in compliance with the simplified approach using a provision matrix (expected credit loss model). This provision matrix has been developed to reflect the country risk, the credit risk profile, as well as available forward looking and historical data. The Group considers a trade receivable to be credit impaired when one or more detrimental events have occurred such as: • Significant financial difficulty of the customer; or • It is becoming probable that the customer will enter bankruptcy or other financial reorganization Unbilled sales and work in progress Unbilled sales are recognized for services completed but not yet invoiced and are valued at net selling price. Work in progress is recognized for the partially finished performance of obligations under a contract. The measure of progress is either based on observable output methods or based on input methods. A margin is recognized based on actual costs incurred, provided that the project is expected to be profitable once completed. Similarly to receivables, an allowance for unbilled sales and work in progress is made in compliance with the simplified approach using a provision matrix (expected credit loss model). Cash and cash equivalents Cash and cash equivalents include cash and deposits held with banks, with an original maturity of three months or less, and are subject to an insignificant risk of changes in value. Bank overdrafts are included within current loans. 92 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Derivative financial instruments and hedging The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for trading purposes. Derivatives are accounted for on a fair value basis. Derivative financial instruments are initially recognized at fair value and subsequently remeasured at fair value through the income statement (FVTPL). The fair value of forward exchange contracts is determined with reference to market prices at the balance sheet date. Corporate bonds The corporate bonds issued by the Group are measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The effective interest method is a method of calculating the amortized cost of a financial liability and allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability to the net carrying amount on initial recognition. The Group may use financial instruments to economically hedge interest rate risks relating to its corporate bonds. The changes in fair value of finance instruments is recognized in the income statement. Liabilities related to put options granted to holders of non-controlling interests Written put options in favor of holders of non-controlling interests give rise to the recognition of a financial liability at the present value of the expected cash outflow. The present value is determined by management’s best estimate of the cash outflow required to settle the obligation on exercise of the option, discounted by the Group’s cost of debt. The financial liability is initially recorded with the corresponding entry within equity and in the absence of specific guidance in IFRS, subsequent changes in the valuation of the liability shall be recognized directly in equity attributable to owners, including the unwinding of the discount. Fair value measurement Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. • Level 1 fair value measurements are those derived from the quoted price in active markets • Level 2 fair value measurements are those derived from inputs other than quoted prices that are observable for the asset and liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) • Level 3 fair value measurements are those derived from valuation techniques as they cannot be derived from publicly available information. The assumptions and inputs used in the model take into account externally verifiable inputs. However, such information is by nature subject to uncertainty, particularly where comparable market-based transactions often do not exist. External valuers are involved for valuation for significant assets and liabilities Capital management Capital comprises equity attributable to equity holders, loans and other financial liabilities, lease liabilities and cash and cash equivalents. The Board of Directors’ policy is to maintain a strong capital base in order to maintain investor, creditor and market confidence, and to sustain the future development of the business. The Board recommends the level of dividends to be distributed to ordinary shareholders on an annual basis. The Group maintains sufficient liquidity at the Group and subsidiary level to meet its working capital requirements, fund capital purchases and small and medium-sized acquisitions. Treasury shares are intended to be used to cover the Group’s employee equity participation plan. Decisions to buy or sell are made on an individual transaction basis by management. There were no changes in the Group’s approach to capital management during the year. The Group is not subject to any externally imposed capital requirements. Earnings per share Basic earnings per share are calculated by dividing the Group’s profit by the weighted average number of shares outstanding during the year, excluding treasury shares. For diluted earnings per share, the weighted average number of shares outstanding is adjusted assuming conversion of all potential dilutive shares. Group profit is also adjusted to reflect the after-tax impact of conversion. Treasury shares Treasury shares are reported as a deduction to equity. The original cost of treasury shares and the proceeds of any subsequent sale are recorded as movements in equity. Employee benefits Pension plans The Group maintains several defined benefit and defined contribution pension plans in accordance with local conditions and practices in the countries in which it operates. Defined benefit pension plans are based on an employee’s years of service and remuneration earned during a predetermined period. Contributions to these plans are normally paid into funds which are managed independently of the Group, except in rare cases where there is no legal obligation to fund. In such cases, the liability is recorded in the Group’s consolidated statement of financial position. The Group’s obligations towards defined benefit pension plans and the annual cost recognized in the income statement are determined by independent actuaries using the projected unit credit method. Remeasurement gains and losses are immediately recognized in the consolidated statement of financial position with the corresponding movement being recorded in the consolidated statement of comprehensive income. Past service costs are immediately recognized as an expense. Net interest expense is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. The retirement benefit obligation recognized in the statement of financial position represents the present value of the defined benefit obligation reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the plan. Payments to defined contribution plans are recognized as an expense in the income statement as incurred. 93 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Post-employment plans other than pensions The Group operates some non-pension post-employment defined benefit schemes, mainly healthcare plans. The method of accounting and the frequency of valuations are similar to those used for defined benefit pension plans. Equity compensation plans The Group provides additional benefits to certain senior executives and employees through equity compensation plans. An expense is recognized in the income statement for shares and equity-linked instruments granted to senior executives and employees under these plans. Trade payables Trade payables are recognized at an amortized cost that approximates the fair value. Provisions The Group records provisions when: it has an obligation, legal or constructive, to satisfy a claim; it is probable that an outflow of Group resources will be required to satisfy the obligation; and a reliable estimate of the amount can be made. In the case of litigation and claims relating to services rendered, the amount that is ultimately recorded is the result of a complex process of assessment of a number of variables, and relies on management’s informed judgment about the circumstances surrounding the past provision of services. It also relies on expert legal advice and actuarial assessments. Changes in provisions are reflected in the income statement in the period in which the change occurs. Contract liabilities Contract liabilities arise upon advance payments from clients and issuance of upfront invoices. Restructuring costs The Group recognizes costs of restructuring against operating income in the period in which management has committed to a formal plan, the costs of which can be reliably estimated, and has raised a valid expectation in those affected that the plan will be implemented and the related costs incurred. Where appropriate, restructuring costs include impairment charges arising from the implementation of the formal plan. Taxes Income taxes include all taxes based upon the taxable profits of the Group, including withholding taxes payable on the transfer of income from Group companies and tax adjustments from prior years. Taxes on income are recognized in the income statement except to the extent that they relate to items directly charged or credited to equity or other comprehensive income, in which case the related income tax effect is recognized in equity or other comprehensive income. Provisions of income and withholding taxes that could arise on the remittance of subsidiary retained earnings are only made where there is a current intention to remit such earnings. Other taxes not based on income, such as property taxes and capital taxes, are included within operating expenses. Deferred taxes are provided using the full liability method. They are calculated on all temporary differences that arise between the tax base of an asset or liability and the carrying values in the consolidated financial statements except for non-tax-deductible goodwill and for those differences related to investments in subsidiaries where their reversal will not take place in the foreseeable future. Deferred income tax assets relating to the carry-forward of unused tax losses and tax credits are recognized to the extent that it is probable that future taxable profits will be available against which they can be used. Current income tax assets and liabilities are offset where there is a legally enforceable right to offset. Deferred tax assets and liabilities are determined based on enacted or substantively enacted tax rates in the respective jurisdictions in which the Group operates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Dividends Dividends are reported as a movement in equity in the period in which they are approved by the shareholders. Significant accounting estimates and judgments Use of estimates The key assumptions concerning the future, and other key sources of estimation, at the balance sheet date that may have a risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year. Business combinations In a business combination, the determination of the fair value of the identifiable assets acquired, particularly intangibles, requires estimations which are based on all available information and in some cases on assumptions with respect to the timing and amount of future sales and expenses associated with an asset. The purchase price is allocated to the underlying acquired assets and liabilities based on their estimated fair value at the time of acquisition. The excess is reported as goodwill. As a result, the purchase price allocation impacts reported assets and liabilities, future net earnings due to the impact on future depreciation and amortization expense and impairment charges. The purchase price allocation is subject to a maximum adjustment period of 12 months, in conformity with IFRS 3. Expected Credit Losses Trade receivables, unbilled sales and work in progress are presented net of expected credit loss allowance. These allowances for potential uncollected amounts are estimated in compliance with the simplified approach using a provision matrix (expected credit loss model), which has been developed to reflect the country risk, the credit risk profile, as well as available historical data. In addition, an allowance is estimated based on individual client analysis when collection is no longer probable. Impairment of goodwill The Group determines whether goodwill is impaired at a minimum on an annual basis. This requires identification of CGUs and an estimation of the value-in-use of the CGUs to which the goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of expected future cash flows from the CGU or group of CGUs that holds the goodwill at a determined discount rate in order to calculate the present value of those cash flows. Estimations of employee post-employment benefits obligations The Group maintains several defined benefit pension plans in accordance with local conditions and practices in the countries in which it operates. The related obligations recognized in the statement of financial position represent the present value of the defined benefit obligations calculated annually by independent actuaries. These actuarial valuations include assumptions such as discount rates, salary progression rates and mortality rates. These actuarial assumptions vary according to the local prevailing economic and social conditions. 94 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Income taxes The Group is subject to income taxes in numerous jurisdictions and there are many transactions and calculations for which the ultimate tax determination is uncertain. In assessing how an uncertain tax treatment may affect the determination of the taxable profit (tax loss), the Group assumes that a taxation authority will examine amounts and have full knowledge of all related information. If the Group concludes it is not probable that a taxation authority will accept a particular tax treatment, the Group reflects the effect of each uncertainty in determining the taxable profit (tax loss) by using one of the following methods: • The single most likely amount • The sum of probability-weighted amount in a range of possible outcomes The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due, including estimated interest and penalties where appropriate. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Legal and warranty claims on services rendered The Group is subject to litigation and other claims. Management bases its judgment on the circumstances relating to each specific event, internal and external legal advice, knowledge of the industries and markets, prevailing commercial terms and legal precedent, and evaluation of applicable insurance cover where appropriate. The process of estimation is complex, dealing with uncertainty, requiring the use of informed estimates, actuarial assessment, evaluation of the insurance cover where appropriate and the judgment of management. The timing of cash outflows from pending litigation and claims is uncertain since it depends, in the majority of cases, on the outcome of administrative and legal proceedings. The Group’s legal and warranty claims are reviewed, at a minimum, on a quarterly basis by a cross-functional representation of management. Any changes in these estimates are reflected in the income statement in the period in which the estimates change. Judgments In the process of applying the entity’s accounting policies described above, management has made the following judgment that has a significant effect on the amounts recognized in the financial statements. Lease termination of contracts with renewal and exit options The Group determines the lease term as the non-cancellable term of the lease together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has the option, for some of its leases, to lease the assets for additional terms. The Group applies judgment in evaluating whether it is reasonably certain to exercise the option to renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the renewal. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise (or not to exercise) the option to renew. Exchange rates The most significant currencies for the Group were translated at the following exchange rates into Swiss Francs: Statement of financial position period-end rates Income statement period average rates 2024 2023 2024 2023 Australia AUD 100 56.24 57.38 58.10 59.73 Canada CAD 100 62.63 63.53 64.29 66.59 Chile CLP 100 0.09 0.10 0.09 0.11 China CNY 100 12.36 11.83 12.23 12.70 Eurozone EUR 100 94.03 93.02 95.26 97.17 Korea KRW 100 0.06 0.06 0.06 0.07 United Kingdom GBP 100 113.45 107.16 112.49 111.69 Russia RUB 100 0.87 0.94 0.95 1.07 Taiwan TWD 100 2.75 2.74 2.74 2.89 USA USD 100 90.19 84.11 88.04 89.87 95 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3. Segment information Description of segments and principal activities In line with Strategy 2027: Accelerating growth, building trust, the Group has changed its operating segments in 2024, with Testing & Inspection and Certification results being presented separately. This change reflects the way the Group chief operating decision maker (i.e. the Executive Committee) now reviews the operating results and allocates resources. The information presented is disclosed by operating segment and focuses on sales, operating income, depreciation and amortization, capital expenditures, and salaries and wages because these are the performance measures used by the Group chief operating decision maker (i.e. the Executive Committee) to assess segment performance. Analysis of operating income (CHF million) 2024 2023 Adjusted operating income1 1 040 971 Amortization and impairment of acquired intangibles –30 –55 Restructuring costs –82 –21 Goodwill impairment – –18 Gain on business disposals – 7 Transaction and integration costs –12 –5 Other non-recurring items –12 –22 Operating income 904 857 Sales and operating income by segment 2024 (CHF million) Sales Adjusted operating income1 Amortization and impairment of acquired intangibles Restructuring costs Transaction and integration costs Other non-recurring items Operating income by segment Testing & Inspection 6 033 887 –28 –75 –11 –12 761 Certification 761 153 –2 –7 –1 – 143 Total 6 794 1 040 –30 –82 –12 –12 904 2023 restated (CHF million) Sales Adjusted operating income1 Amortization and impairment of acquired intangibles Restructuring costs Goodwill impairment Gain on business disposals Transaction and integration costs Other non-recurring items Operating income by segment Testing & Inspection 5 876 818 –52 –20 –18 7 –5 –20 710 Certification 746 153 –3 –1 – – – –2 147 Total 6 622 971 –55 –21 –18 7 –5 –22 857 2023 published (CHF million) Sales Adjusted operating income1 Amortization and impairment of acquired intangibles Restructuring costs Goodwill impairment Gain on business disposals Transaction and integration costs Other non-recurring items Operating income by business Industries & Environment 2 190 248 –15 –11 –18 3 –2 –16 189 Natural Resources 1 583 228 –1 –6 – – – –2 219 Connectivity & Products 1 246 262 –5 –1 – 4 –1 –2 257 Health & Nutrition 857 80 –31 –2 – – –2 – 45 Business Assurance 746 153 –3 –1 – – – –2 147 Total 6 622 971 –55 –21 –18 7 –5 –22 857 1. Refer to alternative performance measures of this report. 96 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Restructuring costs The Group incurred a pre-tax restructuring charge of CHF 82 million (2023: CHF 21 million). Total restructuring costs comprised personnel reorganization of CHF 62 million (2023: CHF 15 million), as well as a fixed asset impairment of CHF 6 million (2023: CHF 2 million) and other charges of CHF 14 million (2023: CHF 4 million). Other non-recurring items The Group reported as non-recurring items a charge of CHF 12 million in 2024 (2023: CHF 22 million), including fixed assets impairment of CHF 2 million and other charges of CHF 10 million (2023: CHF 16 million intangible impairment and other charges for CHF 6 million). Other disclosure by segment (CHF million) 2024 2023 Salaries & wages Depreciation, amortization and impairment Capital addition Salaries & wages Depreciation, amortization and impairment Capital addition Testing & Inspection 3 063 459 246 2 966 526 291 Certification 364 17 5 350 19 7 Total 3 427 476 251 3 316 545 298 Disclosure by business lines Services delivered by the Group across its two operating segments continue to be organized by business lines, reflecting their end-markets. The Testing & Inspection operating segment includes the following business lines: • Industries & Environment (I&E): end-markets include Field Services and Inspection, Technical Assessment and Advisory, Industrial and Public Health & Safety, Environmental Testing and Public Mandates • Natural Resources (NR): end-markets include Trade and Inspection of Minerals, Oil and Gas and Agricultural Commodities, Laboratory Testing, Metallurgy and Consulting and Market Intelligence • Connectivity & Products (C&P): end-markets include Electrical and Electronic goods, Softlines, Hardlines and Trade Facilitation • Health & Nutrition (H&N): end-markets include Food, Crop Science, Health Science and Cosmetics & Hygiene The Certification operating segment is one business line: Business Assurance (BA): end-markets include Management System Certification, Customized Audits, Consulting and Academy. (CHF million) 2024 2023 Sales Adjusted operating income1 Adjusted operating income margin1 Sales Adjusted operating income1 Adjusted operating income margin1 Industries & Environment 2 261 287 12.7% 2 190 248 11.3% Natural Resources 1 612 238 14.8% 1 583 228 14.4% Connectivity & Products 1 282 268 20.9% 1 246 262 21.0% Health & Nutrition 878 94 10.7% 857 80 9.3% Total Testing & Inspection 6 033 887 14.7% 5 876 818 13.9% Certification – Business Assurance 761 153 20.1% 746 153 20.5% Total 6 794 1 040 15.3% 6 622 971 14.7% 1. Refer to alternative performance measures of this report. Sales from external customers by geographical area (CHF million) 2024 % 2023 % Asia Pacific 2 324 34 2 279 34 Europe 2 231 33 2 163 33 North America 827 12 817 12 Eastern Europe, Middle East and Africa 808 12 774 12 Latin America 604 9 589 9 Total 6 794 100 6 622 100 Sales in Switzerland from external customers for 2024 amounted to CHF 161 million (2023: CHF 155 million). No country represented more than 20% of sales from external customers in either 2024 or 2023. Major customer information In 2024 and 2023, no external customer represented 5% or more of the Group’s total sales. 97 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Specific non-current assets by geographical area Specific non-current assets directly attributable to geographical segment mainly include property, land and equipment, right-of-use assets, goodwill and other intangible assets: (CHF million) 2024 % 2023 % Asia Pacific 596 17 593 18 Europe 1 907 53 1 841 56 North America 755 21 579 17 Eastern Europe, Middle East and Africa 137 4 133 4 Latin America 169 5 164 5 Total specific non-current assets 3 564 100 3 310 100 Specific non-current assets in Switzerland for 2024 amounted to CHF 150 million (2023: CHF 155 million). No country represented more than 20% of non-current assets in either 2024 or 2023. Reconciliation with total non-current assets (CHF million) 2024 2023 Specific non-current assets as above 3 564 3 310 Deferred tax assets 213 185 Retirement benefit assets 138 133 Non-current loans to third parties 5 4 Total 3 920 3 632 Average number of Full Time Equivalents (FTEs) by geographical area (Average number of FTEs) 2024 2023 Asia Pacific 38 230 37 845 Europe 21 823 21 932 North America 5 699 5 726 Eastern Europe, Middle East and Africa 17 984 18 055 Latin America 15 446 14 987 Total 99 182 98 545 Number of FTEs at year end 99 483 99 589 4. Sales from contracts with customers As presented in note 3, since the redefinition of its operating segments in 2024, the Group discloses two operating segments: Testing & Inspection and Certification. The comparative information is restated accordingly. Group’s sales from contracts with customers by timing of recognition 2024 2023 restated (CHF million) Services transferred at a point in time Services transferred over time Services transferred at a point in time Services transferred over time Testing & Inspection 80% 20% 80% 20% Certification 93% 7% 89% 11% Total 82% 18% 81% 19% 2023 published (CHF million) Services transferred at a point in time Services transferred over time Industries & Environment 71% 29% Natural Resources 84% 16% Connectivity & Products 86% 14% Health & Nutrition 84% 16% Business Assurance 89% 11% Total 81% 19% 98 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Assets and liabilities related to contracts with customers (CHF million) 2024 2023 Unbilled sales and work in progress 247 223 Trade receivables 991 940 Contract liabilities 261 221 Sales evolution, timing and project maturity are the main factors impacting assets and liabilities related to contracts with customers. In 2024, SGS has recognized sales of CHF 178 million related to contract liabilities at 31 December 2023. In 2023, the sales recognized from contract liabilities at 31 December 2022 amounted to CHF 170 million. Sales recognized from performance obligations satisfied in previous periods were immaterial in 2024 and 2023. The remaining performance obligations (unsatisfied or partially satisfied) expected to be recognized for long-term contracts amount to CHF 1 356 million at 31 December 2024, of which CHF 675 million are expected to be recognized in sales within one year, CHF 380 million between one year and two years and CHF 301 million after the next two years. As at 31 December 2024, the Group has unbilled sales and work in progress of CHF 247 million (2023: CHF 223 million) which is net of an allowance for expected credit losses of CHF 36 million (2023: CHF 20 million). SGS is applying the practical expedient IFRS 15.121 and does not disclose unsatisfied or partially unsatisfied performance obligations from contracts with an original duration of one year or less, or where SGS may recognize sales from the satisfaction of the performance obligation in accordance with IFRS 15.B16. This paragraph permits as a practical expedient to exclude contracts where SGS has a right to payment for performance completed to date. Assets recognized from costs to fulfill a contract in 2024 and 2023 were not significant, while amortization and impairment losses were nil. 5. Other operating expenses (CHF million) 2024 2023 Consumables, repairs and maintenance 547 546 Travel costs 329 333 Rental expense, insurance, utilities and sundry supplies 153 166 External consultancy fees 122 116 IT expenses 136 135 Communication costs 42 48 Allowance for expected credit losses 22 11 Gain on disposal of property, plant and equipment –2 –3 Miscellaneous operating expenses 224 159 Total 1 573 1 511 6. Financial income (CHF million) 2024 2023 Interest income 27 20 Foreign exchange gains/(losses) 3 2 Other financial income 4 6 Net financial income on defined benefit plans – 1 Total 34 29 7. Financial expenses (CHF million) 2024 2023 Interest expense 73 70 Fair value losses on derivatives 18 13 Other financial expenses 3 3 Total 94 86 99 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 8. Taxes Major components of tax expense (CHF million) 2024 2023 Current taxes 255 262 Deferred tax (credit) relating to the origination and reversal of temporary differences –33 –57 Total 222 205 The Group has operations in various countries that have different tax laws and rates. Consequently, the effective tax rate on consolidated income varies from year to year. A reconciliation between the reported income tax expense and the amount that would arise using the weighted average statutory tax rate of the Group is as follows: Reconciliation of tax expense (CHF million) 2024 2023 Profit before taxes 847 802 Tax at statutory rates applicable to the profits earned in the country concerned/rate 163 19% 147 18% Tax effect of non-deductible or non-taxable items 10 13 Tax effect on losses not currently treated as being recoverable in future years 17 18 Tax effect on losses previously considered irrecoverable, now expected to be recoverable –1 – Non-creditable foreign withholding taxes 43 41 Minimum taxes 5 5 Prior period adjustments –4 24 Rate changes 1 1 Other1 –12 –44 Tax charge/rate 222 26% 205 26% 1. Other includes the tax impact of an internal legal reorganization and some write-offs. Deferred tax after netting (CHF million) 2024 2023 Deferred tax assets 213 185 Deferred tax liabilities –73 –73 Total 140 112 Components of deferred income tax balances 2024 2023 (CHF million) Assets Liabilities Assets Liabilities Right of use assets – 114 – 109 Fixed assets 46 6 41 8 Trade receivable, unbilled sales and work in progress 23 10 21 8 Defined benefit obligation 7 24 6 22 Provisions and other2 145 16 105 16 Lease liabilities 117 – 111 – Intangible assets 3 71 3 66 Tax losses carried forward 40 – 54 – Deferred income taxes 381 241 341 229 2. Other includes the tax impact of an internal legal reorganization. 100 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Net change in deferred tax assets/(liabilities) (CHF million) Total Net deferred income tax asset (liability) at 1 January 2023 74 Acquisition of subsidiaries –1 (Charged)/credited to the income statement 57 (Charged)/credited to other comprehensive income –8 Exchange differences and other –10 Net deferred income tax asset (liability) at 31 December 2023 112 Acquisition of subsidiaries –5 (Charged)/credited to the income statement 33 (Charged)/credited to other comprehensive income 2 Exchange differences and other –2 Net deferred income tax asset (liability) at 31 December 2024 140 Unrecognized tax losses carryforwards (CHF million) 2024 2023 Expiring in the next 3 years 37 14 Expiring in 4-10 years 26 40 Available without limitation 269 193 Total unrecognized tax losses 332 247 At 31 December 2024, the unrecognized deferred tax assets amount to CHF 84 million (2023: CHF 66 million). At 31 December 2024, the retained earnings of subsidiaries and foreign incorporated joint ventures consolidated by the Group include approximately CHF 2 190 million (2023: CHF 2 212 million) of undistributed earnings that may be subject to tax if remitted to the parent company. Pillar Two The Group is subject to income taxes in numerous jurisdictions and monitors developments which could affect the Group’s tax liability. In particular, the Organisation for Economic Co-operation and Development (OECD) published the Global Anti-Base Erosion Model Rules (Pillar Two). The Pillar Two model framework introduced a global minimum tax rate concept of 15%, which is achieved through a system of top-up taxes in jurisdictions where tax rate would be lower. The legislation was previously enacted in certain jurisdictions where the Group operates and is effective since 1 January 2024. In line with the assessment carried out in 2023, Pillar Two legislation has no material impact on the Group tax charge. At 31 December 2024, current tax expense included less than CHF 1 million of top-up tax. In accordance with IAS 12 requirements, the Group applied the mandatory exception from accounting for deferred tax arising from Pillar Two. 9. Earnings per share and dividend per share Basic earnings per share are calculated as follows: 2024 2023 Profit attributable to equity holders of SGS SA (CHF million) 581 553 Weighted average number of shares (million) 188 184 Basic earnings per share (CHF) 3.10 3.00 Diluted earnings per share are calculated as basic earnings per share except that the weighted average number of shares only includes the dilutive effect of the Group’s equity compensation plans detailed in note 27. For the year ended 31 December 2024, the Group calculated 523 052 dilutive potential shares (2023: 742 208): 2024 2023 Profit attributable to equity holders of SGS SA (CHF million) 581 553 Diluted weighted average number of shares (million) 188 185 Diluted earnings per share (CHF) 3.09 2.99 The SGS Board of Directors will recommend to the Annual General Meeting (to be held on 26 March 2025) the approval of an optional scrip dividend of CHF 3.20 per share (2023: optional scrip dividend of CHF 3.20 per share). 101 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 10. Acquisitions and divestments Acquisitions 2024 In 2024, the Group completed the following business combinations for a total purchase price of CHF 213 million. • 100% of ArcLight Wireless Inc., a world-class leader in systems engineering, network services, technical outsourcing and field testing for the wireless industry, based in North Carolina, USA (effective 1 May 2024) • 100% of Gossamer, a world-class provider of cybersecurity evaluation, testing and consulting services for connected services, headquartered in Maryland, USA (effective 1 August 2024) • 100% of AQM and Cromanal, two key players in the Colombian pharmaceutical testing industry, headquartered in Bogota (effective 1 October 2024) • 96.05% of Institut d’Expertise Clinique, a leading cosmetics Clinical Research Organization active in the field of advanced clinical testing solutions, headquartered in Lyon, France (effective 1 October 2024) • 100% of Hazgo and Express Solutions, two Belgium-based companies specializing in supply chain services for sensitive products, including pharmaceuticals, chemical samples and dangerous goods (effective 1 October 2024) • 100% of Beta Analytic, the global leader in Carbon 14 testing for governmental, academic and commercial organizations worldwide. Beta Analytic is based in Miami, Florida, USA (effective 1 November 2024) • 100% of AMA Analytical Services, a Maryland-based specialist in environmental testing, with a focus on asbestos, metals and microbial analysis (effective 1 November 2024) • 67.6% of CertX, a Swiss-based certification specialist in cybersecurity, artificial intelligence (AI), and functional safety (effective 1 December 2024) • 100% of MP Machinery Testing, a company based in State College, Pennsylvania, USA, and active in the field of high material testing and analysis, specializing in the nuclear sector (effective 1 December 2024) These companies were acquired for CHF 213 million and the total goodwill recognized on these transactions amounted to CHF 114 million. All the above transactions contributed CHF 18 million in sales and CHF 4 million in operating income in 2024. Had all acquisitions been effective 1 January 2024, the sales for the period from these acquisitions would have been CHF 71 million and the operating income would have been CHF 18 million. Acquisitions 2023 In 2023, the Group completed two business combinations for a total purchase price of CHF 9 million. • 100% of Seafood Testing Business, from Asmecruz, a cooperative of mussels producers in Spain (effective 17 March 2023) • 60% of Nutrasource, a company providing clinical trial management, full regulatory support, testing services as well as product development R&D in Canada and USA (effective 1 May 2023) These companies were acquired for CHF 9 million and the total goodwill generated on these transactions amounted to CHF 9 million. All the above transactions contributed CHF 7 million in sales and CHF nil million in operating income in 2023. Had all acquisitions been effective 1 January 2023, the sales for the period from these acquisitions would have been CHF 11 million and the operating income would have been CHF 1 million. None of the goodwill arising on the 2023 acquisitions is expected to be tax deductible. Assets and liabilities arising from acquisitions (CHF million) Beta Analytic fair value Fair value on other acquisitions Total fair value on acquisitions December 2024 Total fair value on acquisitions December 2023 Property, plant and equipment 7 14 21 – Right-of-use assets – 3 3 2 Intangible assets 24 45 69 4 Trade receivable 2 12 14 2 Other current assets 6 4 10 2 Cash and cash equivalents 1 16 17 – Current liabilities –4 –22 –26 –3 Non-current liabilities – –8 –8 –7 Non-controlling interests – –1 –1 – Net assets acquired 36 63 99 – Goodwill 32 82 114 9 Total purchase price 68 145 213 9 Acquired cash and cash equivalents –1 –16 –17 – Consideration receivable/(payable) 1 –11 –10 – Payment on prior year acquisitions – 7 7 3 Net cash outflow on acquisitions 68 125 193 12 In compliance with IFRS 3, fair value on acquisition remains provisional for a 12-month period following the date of acquisition, during which the Group can finalize the purchase price allocation. The goodwill arising on these acquisitions relates mainly to the value of expected synergies and the value of the qualified workforce that do not meet the criteria for recognition as separable intangible assets. CHF 75 million (2023: nil) of the goodwill recognized is expected to be tax deductible. Consideration payable relates mainly to environmental and commercial warranty clauses and the fair value of contingent future earn-out payments. 102 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The Group incurred transaction-related costs of CHF 12 million (2023: CHF 2 million) related to external legal fees and due diligence expenses. These expenses are reported within other operating expenses in the consolidated income statement. Divestments 2024 There were no disposals in 2024. Divestments 2023 In 2023, the Group completed three divestments, for a total consideration of CHF 22 million, resulting in a gain on disposal of CHF 7 million: • Subsurface Consultancy business, in the Netherlands (effective 1 March 2023) • Automotive Asset Assessment and Retail Network Services operations, in multiple countries (effective 1 July 2023) • Powertrain Testing Operations, in North America (effective 1 October 2023) In December 2023, SGS signed an agreement to divest its crop science operations to Eurofins. In 2024, despite both parties’ efforts, not all closing conditions were satisfied by the agreed long-stop date. Consequently, SGS decided to make use of its right to terminate the agreement. Eurofins challenges the termination and has initiated arbitration proceedings, which are ongoing. 11. Property, plant and equipment (CHF million) Land & buildings Machinery & equipment Other tangible assets Total 2024 At cost At 1 January 427 2 188 659 3 274 Additions 25 129 76 230 Acquisition of subsidiaries 14 7 8 29 Disposals –6 –130 –46 –182 Assets classified as held-for-sale –46 – – –46 Exchange differences and other 11 82 –27 66 At 31 December 425 2 276 670 3 371 Accumulated depreciation and impairment At 1 January 251 1 738 462 2 451 Depreciation 14 169 49 232 Impairment –6 4 1 –1 Acquisition of subsidiaries 2 3 3 8 Disposals –5 –128 –45 –178 Assets classified as held-for-sale –29 – – –29 Exchange differences and other 5 36 10 51 At 31 December 232 1 822 480 2 534 Net book value at 31 December 2024 193 454 190 837 (CHF million) Land & buildings Machinery & equipment Other tangible assets Total 2023 At cost At 1 January 460 2 340 702 3 502 Additions 14 138 108 260 Disposals –18 –79 –36 –133 Disposals from subsidiaries –7 –31 –4 –42 Exchange differences and other –22 –180 –111 –313 At 31 December 427 2 188 659 3 274 Accumulated depreciation and impairment At 1 January 269 1 837 489 2 595 Depreciation 16 173 50 239 Impairment – 3 – 3 Disposals –11 –78 –33 –122 Disposals from subsidiaries –6 –25 –3 –34 Exchange differences and other –17 –172 –41 –230 At 31 December 251 1 738 462 2 451 Net book value at 31 December 2023 176 450 197 823 103 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Included in the other tangible assets are leasehold improvements, office furniture and IT hardware, as well as construction-in-progress assets amounting to CHF 33 million (2023: CHF 47 million). At 31 December 2024, the Group had commitments of CHF 3 million (2023: CHF 3 million) for the acquisition of land, buildings and equipment. 12. Right-of-use assets and lease liabilities Right-of-use assets Total Lease liabilities (CHF million) Land & buildings Machinery & equipment Other tangible assets At 1 January 2024 431 69 6 506 527 Additions 143 66 3 212 203 Acquisition of subsidiaries 3 – – 3 3 Depreciation expense –131 –47 –3 –181 – Interest expense – – – – 19 Payment of lease liabilities and interests – – – – –193 Exchange difference and other 8 – – 8 9 At 31 December 2024 454 88 6 548 568 Analyzed as: 2024 Current liabilities 159 Non-current liabilities 409 Total 568 Right-of-use assets Total Lease liabilities (CHF million) Land & buildings Machinery & equipment Other tangible assets At 1 January 2023 502 69 6 577 604 Additions 103 48 3 154 147 Acquisition of subsidiaries 2 – – 2 2 Depreciation expense –135 –42 –3 –180 – Interest expense – – – – 17 Payment of lease liabilities and interests – – – – –193 Exchange difference and other –41 –6 – –47 –50 At 31 December 2023 431 69 6 506 527 Analyzed as: 2023 Current liabilities 143 Non-current liabilities 384 Total 527 Included in machinery & equipment are mainly vehicles for CHF 83 million (2023: CHF 63 million). 104 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The following table summarizes the main foreign currencies of the lease liabilities: (CHF million) 2024 2023 Euro (EUR) 236 219 US Dollar (USD) 71 71 Chinese Renminbi (CNY) 64 52 Australian Dollar (AUD) 24 19 Taiwan Dollar (TWD) 22 21 Canadian Dollar (CAD) 20 16 British Pound Sterling (GBP) 14 7 Indian Rupee (INR) 11 11 Chilean Peso (CLP) 7 6 Korean Won (KRW) 7 9 Swedish Krona (SEK) 6 6 Turkish Lira (TRY) 5 4 Malaysian Ringgit (MYR) 5 4 New Zealand Dollar (NZD) 4 5 Other 72 77 Total 568 527 (CHF million) 2024 2023 IFRS 16 Other quantitative information Expense relating to short-term leases 4 3 Expense relating to leases of low value assets 2 2 Total expense recognized in income statement 6 5 The Group leases mainly offices, laboratory spaces and vehicles. During the year ended 31 December 2024, an additional CHF 6 million (2023: CHF 5 million) was recognized as an expense in the income statement. 13. Goodwill (CHF million) 2024 2023 At cost At 1 January 1 636 1 755 Additions 114 9 Impairment – –18 Exchange differences 33 –110 At end of the period 1 783 1 636 In 2023, for the Vehicle Compliance Spain CGU, the recoverable amount, determined based on a value-in-use calculation, was CHF 122 million and fell below the carrying amount by CHF 18 million, resulting in a goodwill impairment in 2023 for the same amount. This was mainly driven by discount rate increase (+1.9 percentage points, to 10.9%) and unfavorable market conditions. Impairment test for goodwill As a result of the change of the operating segments in 2024, disclosed in note 3, the Group chief operating decision maker (i.e. the Executive Committee) regularly reviews operating results and assesses its performance at operating segment level (Testing & Inspection and Certification). As part of its goodwill monitoring exercise, the Group chief operating decision maker implemented a monitoring on business line level (Industries & Environment (I&E), Natural Resources (NR), Connectivity & Products (C&P), Health & Nutrition (H&N) and Business Assurance). As a consequence, the Group changed the level of goodwill impairment testing to a business line level for the purpose of the preparation of the 2024 consolidated financial statements. The five business lines reflect the level of which the goodwill is monitored since 2024. At the date of changing the level of monitoring goodwill for impairment testing purposes, the Group performed an impairment testing based on the prior year’s level of monitoring, which resulted in no impairment. Similarly, the impairment test at business line level did not result in any impairment either. 105 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information A business line-level summary of the goodwill allocation is presented below: Allocation of goodwill to CGUs or group of CGUs Goodwill allocated to the main CGUs or groups of CGUs, as of 31 December is broken down as follows: (CHF million) 2024 2023 Industries & Environment 896 833 Natural Resources 104 105 Connectivity & Products 196 155 Health & Nutrition 488 452 Business Assurance 99 91 Total 1 783 1 636 Pre-tax discount rate used in 2024 for the main CGUs or group of CGUs impairment testing 2024 2023 Industries & Environment1 7.4% 8.4%-10.9% Natural Resources 7.6% 8.6% Connectivity & Products 7.6% 8.9% Health & Nutrition 7.1% 8.5% Business Assurance1 7.2% 7.4%-8.8% 1. In accordance with the methodology of the Group for the identification of CGUs for the purpose of goodwill impairment testing in 2023, Industries & Environment and Business Assurance had several CGUs and therefore we disclose the range of the discount rates applicable for these CGUs. The Group tests goodwill for impairment on an annual basis. For the 2024 and 2023 reporting periods, the recoverable amount of the cash-generating units (CGUs) was determined based on value in use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period. For the subsequent years, the Group assumes a long-term growth rate of 1%, in line with market long-term inflation rates projections (2023: range of 1%-1.7%), and stable operating margins depending on each CGU or group of CGUs. 14. Other intangible assets Computer software and other assets (CHF million) Trademarks and other Customer relationships Internally generated Purchased Total 2024 At cost At 1 January 84 406 235 191 916 Additions – – 7 14 21 Acquisition of subsidiaries 5 62 – 2 69 Disposals –3 –1 –9 –5 –18 Exchange differences and other 2 7 9 –7 11 At 31 December 88 474 242 195 999 Accumulated amortization and impairment At 1 January 69 217 197 158 641 Amortization 4 25 18 11 58 Impairment – – 2 3 5 Disposals –3 –1 –9 –5 –18 Exchange differences and other 2 5 – 2 9 At 31 December 72 246 208 169 695 Net book value at 31 December 2024 16 228 34 26 304 106 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Computer software and other assets (CHF million) Trademarks and other Customer relationships Internally generated Purchased Total 2023 At cost At 1 January 89 446 220 205 960 Additions – – 17 21 38 Acquisition of subsidiaries – 4 – – 4 Disposals – –3 –10 –21 –34 Disposals of subsidiaries – –17 – – –17 Exchange differences and other –5 –24 8 –14 –35 At 31 December 84 406 235 191 916 Accumulated amortization and impairment At 1 January 68 199 176 167 610 Amortization 7 27 21 13 68 Impairment – 21 14 2 37 Disposals – –3 –10 –21 –34 Disposals of subsidiaries – –14 – – –14 Exchange differences and other –6 –13 –4 –3 –26 At 31 December 69 217 197 158 641 Net book value at 31 December 2023 15 189 38 33 275 15. Other non-current assets (CHF million) 2024 2023 Non-current loans or amounts receivable from third parties 5 4 Pension fund assets 138 133 Other non-current assets 56 54 Total 199 191 Other non-current assets are measured at fair value through profit and loss except, non-current loans or amounts receivable from third parties that are measured at amortized cost. Depending on the nature of the balances, currency and date of maturity, interest rates on long-term balances or loans to third parties range mainly between 0.0% and 3.1%. In 2024, other non-current assets included deposits for guarantees and restricted cash of CHF 37 million (2023: CHF 34 million). Typical examples of restricted cash are cash deposits for performance bonds, rentals and other operating obligations. At 31 December 2024 and 2023, the fair value of the Group’s other non-current assets approximates their carrying value. 16. Trade receivables (CHF million) 2024 2023 Trade receivables 1 123 1 078 Allowance for expected credit losses –132 –138 Total 991 940 The movement of allowance for expected credit losses is analyzed as follows: (CHF million) 2024 2023 At 1 January –138 –161 Acquisition of subsidiaries –1 –1 (Increase) in allowance recognized in the income statement –9 –9 Utilizations 14 16 Exchange differences 2 17 Total at 31 December –132 –138 107 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 17. Other receivables and prepayments (CHF million) 2024 2023 Accrued income, prepayments 96 83 Derivative assets 3 17 Other receivables 118 113 Total 217 213 The Group has no significant concentration of credit risk, with exposure spread over a large number of counterparties. Other receivables consist mainly of sales taxes and other taxes recoverable, as well as advances to suppliers. 18. Cash and cash equivalents (CHF million) 2024 2023 Cash and short-term deposits 1 210 1 569 Total 1 210 1 569 19. Cash flow statement 19.1. Non-cash and non-operating items (CHF million) Notes 2024 2023 Depreciation of property, plant and equipment 11 232 239 Impairment of property, plant and equipment and other intangible assets 11 and 14 4 40 Depreciation/impairment right-of-use asset 12 181 180 Amortization of intangible assets 14 58 68 Impairment of goodwill 13 – 18 ECL1 on trade receivables, unbilled sales and work in progress 23 11 Net financial expenses 6 and 7 60 57 Increase/(decrease) in provisions and employee benefits 5 –6 Share-based payment expenses 19 24 Gain on disposals 10 – –7 Gain on disposals of property, land and equipment –2 –3 Share of results from associates and other entities –3 –2 Taxes 8 222 205 Non-cash and non-operating items 799 824 1. Expected Credit Losses. 19.2. (Increase)/decrease in working capital (CHF million) 2024 2023 (Increase) in unbilled sales and inventories –36 –43 (Increase) in trade receivables –32 –66 (Increase)/decrease in other receivables and prepayments –14 7 (Decrease)/increase in trade and other payables –21 33 Increase in other creditors and accruals 75 13 Increase in contract liabilities 31 12 Increase/(decrease) in other provisions 25 –11 (Increase) in working capital 28 –55 108 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 19.3. Changes in liabilities arising from financing and investing activities Cash impact Non cash impact (CHF million) 1 January Financing cash flows Investing cash flows Equity movement Acquisition and disposals New leases Other movements¹ 31 December 2024 Corporate bonds 3 269 –250 – – – – 8 3 027 Bank loans 558 –373 – – 9 – 15 209 Put options on acquisitions 24 – – 16 – – – 40 Lease liabilities 527 –176 – – 3 203 11 568 Other financial liabilities 22 – –7 – 11 – –3 23 Total 4 400 –799 –7 16 23 203 31 3 867 Cash impact Non cash impact (CHF million) 1 January Financing cash flows Investing cash flows Equity movement Acquisition and disposals New leases Other movements¹ 31 December 2023 Corporate bonds 3 310 –1 – – – – –40 3 269 Bank loans 469 100 – – 5 – –16 558 Put options on acquisitions 29 –12 – 7 – – – 24 Lease liabilities 604 –178 – – 2 147 –48 527 Other financial liabilities 26 – –3 – – – –1 22 Total 4 438 –91 –3 7 7 147 –105 4 400 1. Other movements mainly include currency effects. 20. Financial risk management Risk management framework The Group’s activities expose it primarily to market, credit and liquidity risk. Market risk includes foreign exchange, interest rate and equity price risks. A robust and comprehensive Enterprise Risk Management (ERM) and Internal Control process is implemented throughout the Group, supported by effective systems and monitoring. The Audit Committee oversees how management monitors compliance with the Group’s risk management framework and is assisted in its oversight role by Internal Audit. Risk management activities The Group uses foreign exchange contracts to manage the Group’s exposure to fluctuations in foreign currency exchange rates. These activities are carried out in accordance with the Group’s policies and objectives in areas such as counterparty exposure and economic hedging practices. Counterparties to these agreements are major international financial institutions with high credit ratings and positions are monitored using market value and sensitivity analyses. The associated credit risk is therefore limited. These agreements generally include the exchange of one currency for a second currency at a future date. The following table summarizes foreign exchange contracts outstanding at year end. The notional amount of derivatives summarized below represents the gross amount of the contracts and includes transactions, which have not yet matured. Therefore, the figures do not reflect the Group’s net exposure at year end. The market value approximates the costs to settle the outstanding contracts. These market values should not be viewed in isolation but in relation to the market values of the underlying hedged transactions and the overall reduction in the Group’s exposure to adverse fluctuations in foreign exchange rates. 109 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Currently, the Group has certain exposure to interest and credit risks and no exposure to equity price risk. Notional amount Market value (CHF million) 2024 2023 2024 2023 Foreign exchange forward contracts Currency: Australian Dollar (AUD) –11 –9 – – Brazilian Real (BRL) –3 –5 – – Canadian Dollar (CAD) –12 –13 – – Chilean Peso (CLP) –3 –33 – –1 Chinese Renminbi (CNY) –28 –22 – 1 Colombian Peso (COP) –24 –10 – – Euro (EUR) 182 392 – 1 British Pound Sterling (GBP) –128 –114 – – Hong Kong Dollar (HKD) 29 17 – – Japanese Yen (JPY) –2 –4 – – Kenyan Shilling (KES) – –2 – – New Zealand Dollar (NZD) –5 –6 – – Peruvian Sol (PEN) 19 8 – – Philippines Peso (PHP) –8 –11 – – Polish Zloty (PLN) –6 –6 – – Taiwan Dollar (TWD) –27 –23 1 –1 Turkish Lira (TRY) 4 3 – – US Dollar (USD) –435 –307 –11 9 South African Rand (ZAR) 6 –4 – – Other –12 –19 – – Total –464 –168 –10 9 Credit risk management Credit risk arises from the possibility that customers may not be able to settle their obligations as agreed. It arises principally from the Group’s commercial activities. Trade receivable, unbilled sales and work in progress are subject to a policy of active risk management which focuses on the assessment of country risk, credit limits and approval procedures. Due to its large geographic base and number of customers, the Group is not exposed to material concentrations of credit risk on its trade receivable, unbilled sales and work in progress. As at 31 December 2024, the Group has unbilled sales and work in progress of CHF 247 million (2023: CHF 223 million) which is net of an allowance for expected credit losses of CHF 36 million (2023: CHF 20 million). Receivables are recognized and carried at original invoice amount less an allowance for any non-collectible amounts. A credit loss allowance is made in compliance with the simplified approach using a provision matrix (expected credit loss model). This provision matrix has been developed to reflect the country risk, the credit risk profile and available historical data. Similarly to receivables, an allowance for unbilled sales and work in progress is made using a provision matrix. Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix based on aging of trade receivables as of invoice date at 31 December 2024: (CHF million) Expected credit loss range Gross carrying amount Expected credit loss 0 - 90 days 0%-5% 929 4 91 - 120 days 10%-25% 41 8 121 - 180 days 20%-50% 36 14 181 - 240 days 35%-75% 16 10 241 - 300 days 50%-75% 13 9 301 - 360 days 75%-100% 8 7 > 360 days 100% 80 80 Total 1 123 132 110 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision matrix based on aging of trade receivables as of invoice date at 31 December 2023: (CHF million) Expected credit loss range Gross carrying amount Expected credit loss 0 - 90 days 0%-5% 866 3 91 - 120 days 10%-25% 46 9 121 - 180 days 20%-50% 39 14 181 - 240 days 35%-75% 20 11 241 - 300 days 50%-75% 14 9 301 - 360 days 75%-100% 9 8 > 360 days 100% 84 84 Total 1 078 138 As part of financial management activities, the Group enters into various types of transactions with international banks, usually with a credit rating of at least A. Exposure to these risks is closely monitored and kept within predetermined parameters. The Group does not expect any non-performance from these counterparties. The maximum credit risk to which the Group is theoretically exposed at 31 December 2024 is the carrying amount of financial assets including derivatives. In addition, the Group has issued CHF 188 million (2023: CHF 166 million) financial guarantees to certain financial institutions that have provided credit facilities and foreign exchange lines to its subsidiaries. Management believes the likelihood that a material payment will be required under these guarantees is remote. Analysis of financial assets by class and category at 31 December 2024: Fair value Amortized cost At fair value through equity At fair value through P&L Total (CHF million) Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Cash and cash- equivalents 1 210 1 210 – – – – 1 210 1 210 Trade receivables 991 991 – – – – 991 991 Other receivables¹ 123 123 – – – – 123 123 Unbilled sales and work in progress 247 247 – – – – 247 247 Loans to third parties – non-current 5 5 – – – – 5 5 Derivatives – – – – 3 3 3 3 Total financial assets 2 576 2 576 – – 3 3 2 579 2 579 1. Excluding VAT and other tax related items. Analysis of financial assets by class and category at 31 December 2023: Fair value Amortized cost At fair value through equity At fair value through P&L Total (CHF million) Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Cash and cash- equivalents 1 569 1 569 – – – – 1 569 1 569 Trade receivables 940 940 – – – – 940 940 Other receivables¹ 123 123 – – – – 123 123 Unbilled sales and work in progress 223 223 – – – – 223 223 Loans to third parties – non-current 4 4 – – – – 4 4 Derivatives – – – – 17 17 17 17 Total financial assets 2 859 2 859 – – 17 17 2 876 2 876 1. Excluding VAT and other tax related items. Derivative assets (2024: CHF 3 million; 2023: CHF 17 million) consist of foreign currency forward contracts that are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contract. All outstanding derivative instruments qualify as Level 2 fair value measurement category, in accordance with the fair value hierarchy. 111 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Liquidity risk management The objective of the Group’s liquidity and funding management is to ensure that all its foreseeable financial commitments can be met when due. Liquidity and funding are primarily managed by Group Treasury in accordance with practices and limits set in the risk management policies and objectives approved by the Board of Directors. The nature of the Group’s business requires keeping a significant part of the cash reserves in the operating units. Due to the significant cash position, liquidity risk is limited. The Group has various committed and uncommitted bilateral credit facilities with its banks. Analysis of financial liabilities by class and category at 31 December 2024: Fair value Amortized cost At fair value through equity At fair value through P&L Total (CHF million) Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Trade payables 310 310 – – – – 310 310 Other payables¹ 120 120 – – – – 120 120 Loans and other financial liabilities 3 247 3 264 40 40 12 12 3 299 3 316 Lease liabilities 568 568 – – – – 568 568 Derivatives – – – – 13 13 13 13 Total financial liabilities 4 245 4 262 40 40 25 25 4 310 4 327 1. Excluding VAT and other tax related items. The corporate bonds qualify as fair value Level 1, which amounts to CHF 3 044 million (2023: CHF 3 205 million). Other financial liabilities include CHF 40 million qualifying as fair value Level 3 (2023: CHF 24 million), which represents the estimated present value of the redemption amount to acquire the remaining non-controlling interests of acquisitions if the put/call option is exercised. Subsequent changes in the valuation of the redemption amount to acquire the remaining non-controlling interests of acquisitions if the put/call option is exercised shall be recognized directly in equity attributable to owners, including the unwinding of the discount. The remaining financial liabilities qualify as Level 2, determined in accordance with generally accepted pricing models. Analysis of financial liabilities by class and category at 31 December 2023: Fair value Amortized cost At fair value through equity At fair value through P&L Total (CHF million) Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Carrying amount Fair value Trade payables 335 335 – – – – 335 335 Other payables¹ 123 123 – – – – 123 123 Loans and other financial liabilities 3 842 3 778 24 24 7 7 3 873 3 809 Lease liabilities 527 527 – – – – 527 527 Derivatives – – – – 8 8 8 8 Total financial liabilities 4 827 4 763 24 24 15 15 4 866 4 802 1. Excluding VAT and other tax related items. Undiscounted contractual maturities of financial liabilities including interest payments at 31 December 2024: (CHF million) Trade payables Other payables¹ Gross settled derivative financial instruments outflows Gross settled derivative financial instruments inflows Loans and other financial liabilities Lease liabilities Total On demand or within one year 310 120 1 130 –1 142 626 173 1 217 Within the second year – – – – 760 133 893 Within the third year – – – – 975 91 1 066 Within the fourth year – – – – 194 60 254 Within the fifth year – – – – 364 42 406 After five years – – – – 499 113 612 1. Excluding VAT and other tax related items. 112 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Undiscounted contractual maturities of financial liabilities including interest payments at 31 December 2023: (CHF million) Trade payables Other payables¹ Gross settled derivative financial instruments outflows Gross settled derivative financial instruments inflows Loans and other financial liabilities Lease liabilities Total On demand or within one year 335 123 1 141 –1 134 856 155 1 476 Within the second year – – – – 417 114 531 Within the third year – – – – 736 84 820 Within the fourth year – – – – 957 56 1 013 Within the fifth year – – – – 191 39 230 After five years – – – – 863 103 966 1. Excluding VAT and other tax related items. The Group economically hedges its foreign exchange exposure on a net basis. The net position of the gross settled derivative financial instruments of CHF –12 million (2023: CHF 7 million) represents the net nominal value expressed in CHF of the Group’s foreign currency contracts outstanding at 31 December 2024. Sensitivity analyses The estimated changes in the value of net foreign currency positions are based on an instantaneous 5% weakening of the Swiss Franc against all other currencies from the level applicable at 31 December 2024 and 2023 with all other variables remaining constant. Sensitivity analysis is based on net hedged positions at 31 December 2024 and 2023. The net impact on the income statement would have been CHF 2 million (2023: CHF 2 million), mainly due to the USD. The impact on equity would be nil. Interest rate risk management The Group is exposed to fair value interest rate risk because the Group borrows funds at fixed interest rates. Where appropriate, the risk is managed by the Group using Interest Rate Swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied. As at 31 December 2024, if interest rates were 100 basis points higher/lower, annual interest expense would increase/decrease by CHF 2 million (2023: CHF 5 million). 21. Share capital and treasury shares Shares in circulation Treasury shares Total shares issued Total share capital (CHF million) Balance at 1 January 2023 7 369 054 125 978 7 495 032 7 Treasury shares released into circulation 1 964 –1 964 – – Balance at 12 April 2023 before share split 7 371 018 124 014 7 495 032 7 Share split 25-1 176 904 432 2 976 336 179 880 768 – Balance at 12 April 2023 after share split 184 275 450 3 100 350 187 375 800 7 Treasury shares released into circulation 35 665 –35 665 – – Balance at 31 December 2023 184 311 115 3 064 685 187 375 800 7 Treasury shares released into circulation 178 348 –178 348 – – Treasury shares purchased for equity compensation plans –561 008 561 008 – – New shares issued from scrip dividend 4 964 934 – 4 964 934 1 Cancellation of treasury shares – –2 837 475 –2 837 475 – Balance at 31 December 2024 188 893 389 609 870 189 503 259 8 Issued share capital The company’s Annual General Meeting, held on 26 March 2024, offered shareholders the possibility to receive the 2023 dividend in cash or in new SGS shares. The scrip dividend take-up rate was 64.87% which led to the creation of 4 964 934 new shares, delivered on 25 April 2024. As at 31 December 2024, SGS SA has a share capital of CHF 7 580 130 (2023: CHF 7 495 032) fully paid. All shares, other than own shares, participate equally in the dividends declared by the Company and have equal voting rights. On 28 March 2023, the Annual General Assembly approved a 25-1 stock split that came into effect on 12 April 2023. This split increased the number of shares issued, from 7 495 032 to 187 375 800, and reduced the nominal value per share, from CHF 1 to CHF 0.04. 113 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Treasury shares On 31 December 2024, SGS SA held 609 870 treasury shares (2023: 3 064 685 shares). In 2024, 178 348 treasury shares were sold, or given, in relation to the equity compensation plans, 561 008 were repurchased and 2 837 475 were cancelled. Authorized and Conditional issue of share capital SGS SA has conditionally increased its share capital by a nominal amount of CHF 1 100 000, divided into 27 500 000 registered shares with a par value of CHF 0.04 each. This conditional share capital increase is intended to procure the necessary shares to satisfy employee equity participation plans and option or conversion rights to be incorporated in convertible bonds or similar equity-linked instruments that the Board is authorized to issue. The right to subscribe to such conditional capital is reserved for beneficiaries of employee equity participation plans and holders of convertible bonds or similar debt instruments and therefore excludes shareholders’ preferential rights of subscription. The Board is authorized to determine the timing and conditions of such issues, provided that they reflect prevailing market conditions. The term of exercise of the options or conversion rights may not exceed ten years from the date of issuance of the equity-linked instruments. 22. Loans and other financial liabilities (CHF million) 2024 2023 Bank loans and commercial paper 209 558 Corporate bonds 3 027 3 269 Put option on acquisition 40 24 Other financial liabilities 23 22 Derivatives 13 8 Total 3 312 3 881 Current 612 841 Non-current 2 700 3 040 In 2024, the Group continued to use its EUR 1 billion Euro Commercial Paper (ECP) program. As at 31 December 2024, the amount of commercial paper outstanding was for EUR 215 million or CHF 202 million (2023: EUR 596 million or CHF 554 million). Depending on the nature of the loan, currency and date of maturity, interest rates on long-term loans from third parties range between 0.00% and 13.22% and on short-term loans from third parties, between 0.00% and 44.00%. Loans from third parties exposed to fair value interest rate risk amounted to CHF 3 235 million (2023: CHF 3 825 million) and loans from third parties exposed to cash flow interest rate risk amounted to less than CHF 2 million (2023: less than CHF 0.7 million). SGS SA issued the following corporate bonds listed on the SIX Swiss Exchange: Date of issue Face value in CHF million Coupon in % Year of maturity Issue price in % Redemption price in % 08.05.2015 225 0.875 2030 100.245 100.000 03.03.2017 375 0.550 2026 100.153 100.000 29.10.2018 225 0.750 2025 100.068 100.000 29.10.2018 175 1.250 2028 101.157 100.000 06.05.2020 325 0.950 2026 100.182 100.000 05.09.2022 150 1.250 2025 100.000 100.000 05.09.2022 350 1.700 2029 100.197 100.000 17.11.2023 240 2.000 2027 100.038 100.000 17.11.2023 260 2.300 2031 100.127 100.000 SGS Nederland Holding BV has issued the following corporate bond, which is guaranteed by SGS SA and is listed on the Luxembourg Stock Exchange: Date of issue Face value in EUR million Coupon in % Year of maturity Issue price in % Redemption price in % 21.04.2021 750 0.125 2027 99.761 100.000 114 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information The currency composition of bank loans, corporate bonds and other financial liabilities is as follows: Bank loans and corporate bonds Put options and other financial liabilities (CHF million) 2024 2023 2024 2023 Swiss Franc (CHF) 2 324 2 573 14 12 Euro (EUR) 906 1 251 4 7 Singapore Dollar (SGD) 1 2 11 11 Argentinian Peso (ARS) 1 – – – US Dollar (USD) – – 11 1 Turkish Lira (TRY) 4 – – – Canadian Dollar (CAD) – – 23 12 New Zealand Dollar (NZD) – – – 3 Other – 1 – – Total 3 236 3 827 63 46 23. Defined benefit obligations The Group mainly operates defined benefit pension plans in Switzerland, the USA, the UK, the Netherlands, Germany, Italy, France, Belgium, South Korea and Taiwan. Contributions to most plans are paid to pension funds that are legally separate entities. The Group also operates post-employment benefit plans, principally healthcare plans, in the USA and Switzerland. They represent a defined benefit obligation at 31 December 2024 of CHF 6 million (2023: CHF 6 million). The method of accounting and frequency of valuation are similar to those used for defined benefit pension plans. Healthcare cost trend assumptions do not have a significant effect on the amounts recognized in the income statement. There is a risk to the Group that adverse experience could lead to a requirement for the Group to make additional contributions to recover any deficit that arises. The Group’s material defined benefit plans are in Switzerland, the USA and the UK. Switzerland The Group operates a retirement foundation in Switzerland jointly with employees. The assets and liabilities of the retirement foundation are held separately from the Group. The foundation board is equally composed of representatives of the employees and representatives of the employer. It covers all employees in Switzerland and provides benefits on a defined contribution basis. Each employee has a retirement account to which they and the Group contribute at a rate set out in the foundation rules, based on a percentage of salary. Every year, the foundation decides the level of interest, if any, to apply to retirement accounts based on the agreed policy. At retirement, employees can elect either to withdraw all or part of the balance of their retirement account, or to convert it into annuities at pre-defined conversion rates. As the foundation board is expected to eventually pay out all of the foundation’s assets as benefits to employees and former employees, no surplus is deemed to be recoverable by the Group. Similarly, unless the assets are insufficient to cover minimum benefits, the Group does not expect to make any deficit contribution. According to IFRS, the foundation has to be classified as a defined benefit plan due to underlying benefit guarantees and has to be accounted for on this basis. The weighted average duration of the expected benefit payment is approximately 13 years (2023: 12 years). The Group expects to contribute CHF 5 million to this plan in 2025. The Group also operates an employer fund. The assets are held separately from the Group. This foundation has unilateral power to provide benefits and consequently has no obligations. Therefore, this foundation has no pension liabilities. United States of America The Group operates a non-contributory defined benefit plan, which is subject to the provisions of the Employee Retirement Income Security Act (ERISA). The assets of the plan are held separately from the Group by the trustee-custodian and the plan’s third-party pension administrator, who disburses payments directly to retirees or beneficiaries under the plan. Both the trustee-custodian and the administrator ensure adherence to ERISA rules. Funding valuations are calculated on an actuarial basis and contributions are made as necessary. The funding target is to provide the plan with sufficient assets to meet future plan obligations. Effective 16 March 2004, non-exempt participants ceased accruing any additional benefits; only exempt employees of certain SGS business units in the USA are eligible for annual benefit accrual. In addition, the pension benefit was changed and is defined as a percentage of the current year’s pensionable compensation; the cost of additional benefit accrual is evaluated annually. The Group reserves the right to make future changes to the benefit accrual structure of the plan. Eligible employees become participants in the plan after the completion of one year of service and after reaching the age of 21. Participants become fully vested in the plan after five years of service. The weighted average duration of the expected benefit payment is approximately 9 years (2023: 10 years). The Group expects to contribute CHF nil million to this plan in 2025. 115 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information United Kingdom The Group operates a defined benefit plan through a trust, with the assets of the plans held separately from the Group, and trustees who ensure the plan’s rules are strictly adhered to. This plan has been closed to new entrants since 2002 and, effective 31 October 2020, all remaining participants ceased accruing any additional benefits in the defined benefit plan. Employees are now offered membership in defined contribution plans operated by the Group. Funding valuations of the defined benefit plans are carried out and agreed between the Group and the plan trustees at least once every three years. The funding target is for the plans to hold assets equal in value to the accrued benefits based on projected salaries. As part of the valuation process, if there is a shortfall against this target, then the Group and trustees will agree on deficit contributions to meet this deficit over a specified period. The weighted average duration of the expected benefit payments from the combined plans is approximately 13 years (2023: 13 years). The Group expects to contribute CHF nil million to this plan in 2025. Other countries The Group sponsors defined retirement benefits plans in other countries where the Group operates. No individual countries, other than those described above, are considered material and need to be separately disclosed. The Group expects to contribute CHF 6 million to those plans in 2025. The assets and liabilities recognized in the statement of financial position at 31 December for defined benefit obligations and for post-employment benefit plans are as follows: (CHF million) CH UK USA Other Total 2024 Fair value of plan assets 506 120 129 77 832 Present value of funded defined benefit obligation –401 –101 –119 –84 –705 Funded/(unfunded) status 105 19 10 –7 127 Present value of unfunded defined benefit obligation –6 – –2 –45 –53 Net asset/(liability) at 31 December 99 19 8 –52 74 (CHF million) CH UK USA Other Total 2023 Fair value of plan assets 496 128 145 75 844 Present value of funded defined benefit obligation –395 –111 –137 –84 –727 Funded/(unfunded) status 101 17 8 –9 117 Present value of unfunded defined benefit obligation –5 – –2 –41 –48 Unrecognized asset due to asset ceiling – – – –2 –2 Net asset/(liability) at 31 December 96 17 6 –52 67 The net asset of CHF 74 million (2023: net asset of CHF 67 million) includes CHF 138 million (2023: CHF 133 million) of pension fund assets recognized in the item other non-current assets in note 15 and CHF 64 million (2023: CHF 66 million) of pension fund liability recognized in the item defined benefit obligation in statement of financial position. Amounts recognized in the income statement: (CHF million) CH UK USA Other Total 2024 Service cost expense 4 – –4 5 5 Net interest income on defined benefit plan –2 – 1 1 – Total expense due to defined benefit obligation at 31 December 2 – –3 6 5 Expense charged in: Salaries and wages 4 – –4 5 5 Financial expenses –2 – 1 1 – Total expense due to defined benefit obligation at 31 December 2 – –3 6 5 116 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information (CHF million) CH UK USA Other Total 2023 Service cost expense 5 – – 7 12 Net interest income on defined benefit plan –1 –1 –1 2 –1 Administrative expenses – 1 1 – 2 Total expense due to defined benefit obligation at 31 December 4 – – 9 13 Expense charged in: Salaries and wages 5 1 1 7 14 Financial expenses –1 –1 –1 2 –1 Total expense due to defined benefit obligation at 31 December 4 – – 9 13 Amounts recognized in the statement of other comprehensive income: (CHF million) CH UK USA Other Total 2024 Remeasurement on net defined benefit liability Change in financial assumptions 19 –13 –5 2 3 Experience adjustments on benefit obligations 11 –2 –1 2 10 Actual return on plan assets excluding net interest expense –30 14 8 – –8 Asset ceiling – – – –2 –2 Total recognized in the statement of other comprehensive income at 31 December – –1 2 2 3 (CHF million) CH UK USA Other Total 2023 Remeasurement on net defined benefit liability Change in demographic assumptions – –2 – – –2 Change in financial assumptions 31 3 2 6 42 Experience adjustments on benefit obligations 10 1 1 3 15 Actual return on plan assets excluding net interest expense –1 – –6 2 –5 Asset ceiling –100 – – – –100 Total recognized in the statement of other comprehensive income at 31 December –60 2 –3 11 –50 Change in unrecognized asset due to the asset ceiling: (CHF million) CH UK USA Other Total 2024 Unrecognized asset at 1 January – – – 2 2 Other changes in unrecognized asset due to the asset ceiling – – – –2 –2 Unrecognized asset at 31 December – – – – – (CHF million) CH UK USA Other Total 2023 Unrecognized asset at 1 January 98 – – 1 99 Interest on unrecognized asset recognized in P&L 2 – – 1 3 Other changes in unrecognized asset due to the asset ceiling –100 – – – –100 Unrecognized asset at 31 December – – – 2 2 The Group determines the maximum economic benefit by applying the common approach prescribed by IFRIC 14, and reflects the present value of reductions in future contributions to the plan. In making this estimate, assumptions used for future service costs are consistent with those used to determine the defined benefit obligation as at 31 December 2024. 117 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Movements in the net asset/(liability) during the period: (CHF million) CH UK USA Other Total 2024 Net asset/(liability) at 1 January 96 17 6 –52 67 Expense recognized in the income statement –2 – 3 –6 –5 Remeasurements recognized in other comprehensive income – 1 –2 –2 –3 Contributions paid by the Group 6 – – 6 12 Employer benefit payments – – – 3 3 Exchange differences –1 1 1 –1 – Net asset/(liability) at 31 December 99 19 8 –52 74 (CHF million) CH UK USA Other Total 2023 Net asset/(liability) at 1 January 34 19 3 –44 12 Expense recognized in the income statement –4 – – –9 –13 Remeasurements recognized in other comprehensive income 60 –2 3 –11 50 Contributions paid by the Group 6 – – 8 14 Employer benefit payments – – – 2 2 Exchange differences – – – 2 2 Net asset/(liability) at 31 December 96 17 6 –52 67 Change in the defined benefit obligation is as follows: (CHF million) CH UK USA Other Total 2024 Opening present value of the defined benefit obligation 400 111 139 125 775 Current service cost 6 – – 5 11 Interest cost 5 6 8 4 23 Plan participants’ contributions 4 – – 1 5 Past service cost –2 – – – –2 Settlements – – –20 – –20 Actual net benefit payments –37 –6 –9 –8 –60 Actual taxes paid – – – –1 –1 (Gains)/losses due to changes in financial assumptions 19 –13 –5 2 3 Experience differences 11 –2 –1 2 10 Exchange rate (gains)/losses 1 5 9 –1 14 Defined benefit obligation at 31 December 407 101 121 129 758 (CHF million) CH UK USA Other Total 2023 Opening present value of the defined benefit obligation 362 115 153 120 750 Current service cost 5 – – 6 11 Interest cost 7 5 7 4 23 Plan participants’ contributions 5 – – 1 6 Past service cost – – – 1 1 Actual net benefit payments –20 –6 –10 –7 –43 (Gains)/losses due to changes in demographic assumptions – –2 – – –2 (Gains)/losses due to changes in financial assumptions 31 3 2 6 42 Experience differences 10 1 1 3 15 Exchange rate (gains)/losses – –5 –14 –9 –28 Defined benefit obligation at 31 December 400 111 139 125 775 118 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Change in fair value of plan assets is as follows: (CHF million) CH UK USA Other Total 2024 Opening fair value of plan assets 496 128 145 75 844 Interest income on plan assets 7 6 7 3 23 Return on plan assets excluding amounts included in net interest income 30 –14 –8 – 8 Actual employer contributions 6 – – 9 15 Actual plan participants’ contributions 4 – – 1 5 Actual net benefit payments –37 –6 –9 –8 –60 Actual taxes paid – – – –1 –1 Settlements – – –16 – –16 Exchange differences – 6 10 –2 14 Fair value of plan assets at 31 December 506 120 129 77 832 (CHF million) CH UK USA Other Total 2023 Opening fair value of plan assets 494 134 156 77 861 Interest income on plan assets 10 6 8 3 27 Return on plan assets excluding amounts included in net interest income 1 – 6 –2 5 Actual employer contributions 6 – – 10 16 Actual plan participants’ contributions 5 – – 1 6 Actual net benefit payments –20 –6 –10 –7 –43 Actual administrative expenses paid – –1 –1 – –2 Exchange differences – –5 –14 –7 –26 Fair value of plan assets at 31 December 496 128 145 75 844 There are no reimbursement rights included in plan assets. The actual return on plan assets was a gain of CHF 31 million (2023: gain of CHF 32 million). The major categories of plan assets at the balance sheet date are as follows: (CHF million) CH UK USA Other Total 2024 Cash and cash equivalents 17 3 – 13 33 Equity securities 150 12 – – 162 Debt securities 69 129 129 – 327 Assets held by insurance company – – – 25 25 Properties 227 – – – 227 Investment funds 33 – – – 33 Other 10 –24 – 39 25 Total plan assets at 31 December 506 120 129 77 832 (CHF million) CH UK USA Other Total 2023 Cash and cash equivalents 16 14 – 12 42 Equity securities 138 24 – – 162 Debt securities 78 88 145 2 313 Assets held by insurance company 3 – – 22 25 Properties 226 – – – 226 Investment funds 32 – – – 32 Other 3 2 – 39 44 Total plan assets at 31 December 496 128 145 75 844 119 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information In 2024 and 2023, the Group did not occupy any property that was included in the plan assets. Properties are rented at fair market rental rates. There are no SGS SA shares or any other financial securities used by the Group included in the plan assets. The plan assets are primarily held within instruments with quoted market prices in an active market, with the exception of the property and insurance policy holdings. The investment strategy in Switzerland is to invest, within the statutory and legal requirements, in a diversified portfolio with the aim of generating long-term returns, which will enable the board of the foundation to grow the accounts of the members of the pension fund, whilst taking on the lowest possible risk in order to do so. In the USA, the pension plan target policy is determined both quantitatively and qualitatively by assessing the risk tolerance level and return requirements of the plan, as determined by the Investment Committee. In 2023 the investment portfolio asset was shifted to 100% Liability Driven Investment as the company decided to freeze the plan effective 31 December 2022. In the UK, the trustees review the investment strategy of the scheme and the plan on a regular basis to ensure that they remain appropriate. The last review for both the scheme and plan was recently undertaken and is in the process of being implemented. Actuarial assumptions vary according to local prevailing economic and social conditions. The principal weighted average actuarial assumptions used in determining the cost of benefits for both 2024 and 2023 are as follows: (Weighted average %) CH UK USA Other 2024 Discount rate 1.0 5.5 5.5 3.5 Mortality assumption LPP 2020, CMI 2019 1.25% SPA03M103%/ F99% CMI 2023 1.25% PRI 2012 MP 2021 Salary progression rate 1.5 2.6 – 3.1 Future increase for pension in payments – 3.1 – 0.3 Healthcare cost trend assumed for the next year – – 6.4 – Ultimate trend rate – – 4.5 – Year that the rate reaches the ultimate trend rate 2030 (Weighted average %) CH UK USA Other 2023 Discount rate 1.4 4.5 5.1 4.2 Mortality assumption LPP 2020, CMI 2019 1.25% SPA03M103%/ F99% CMI 2022 1.25% PRI 2012 MP 2021 – Salary progression rate 1.7 2.5 – 3.1 Future increase for pension in payments – 3.0 – 0.4 Healthcare cost trend assumed for the next year – – 6.4 – Ultimate trend rate – – 4.5 – Year that the rate reaches the ultimate trend rate 2030 The weighted average rate for each assumption used to measure the benefits obligation is also shown above. The assumptions used to determine the end-of-year benefits obligation are also used to calculate the following year’s cost. In Switzerland, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by CHF 26 million; a 0.5% increase in assumed salary would increase the obligation by CHF 1 million; and a one-year increase in members’ life expectancy would increase the obligation by approximately CHF 10 million. In the USA, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by CHF 6 million; a 0.5% increase in assumed salary would not impact the obligation; and a one-year increase in members’ life expectancy would increase the obligation by approximately CHF 2 million. In the UK, a decrease in the discount rate of 0.5% per annum would, all other things being equal, increase the obligation by CHF 6 million; a 0.5% increase in assumed salary would not impact the obligation; and a one-year increase in members’ life expectancy would increase the obligation by approximately CHF 3 million. These sensitivities have been calculated to show the movement in the defined benefit obligation in isolation and assume no other changes in market conditions at the accounting date. This is unlikely in practice; for example, a change in discount rate is unlikely to occur without any movement in the value of the assets held by the plans. The amount recognized as an expense in respect of defined contribution plans during 2024 was CHF 87 million (2023: CHF 80 million). 120 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 24. Provisions (CHF million) Legal and warranty claims on services rendered Demobilization and reorganization Other provisions Total At 1 January 2024 36 47 49 132 Charge to income statement 22 67 18 107 Release to income statement –4 –6 –4 –14 Payments –14 –35 –3 –52 Exchange differences – 1 –1 – At 31 December 2024 40 74 59 173 Analyzed as: 2024 2023 Current liabilities 72 41 Non-current liabilities 101 91 Total 173 132 A number of Group companies are subject to litigation and other claims arising out of the normal conduct of their business that can be best viewed as claims on services rendered. The claim provision represents the sum of estimates of amounts payable on identified claims and of losses incurred but not yet reported. They therefore reflect estimates of the future payments required to settle both reported and unreported claims. In the opinion of management, based on all currently available information, the provisions adequately reflect the Group’s exposure to legal and warranty claims on services rendered. The ultimate outcome of these matters is not expected to materially affect the Group’s financial position, operational results or cash flows. Demobilization and reorganization provisions relate to present legal or constructive obligations of the Group towards third parties, such as termination payments to employees upon leaving the Group, which in some jurisdictions are a legal obligation. For specific long-term contracts, typically with two to five years’ duration, the Group is required to dismantle infrastructure and terminate the services of personnel upon completion of the contract. These demobilization costs are provided for during the life of the contract. Experience has shown that these contracts may be either extended or terminated earlier than expected. Other provisions include present legal or constructive obligations towards tax authorities for indirect tax exposure as well as other provisions towards third parties. 25. Trade and other payables (CHF million) 2024 2023 Trade payables 310 335 Other payables 314 299 Total 624 634 Trade accounts and other payables principally comprise amounts outstanding for trade purchases and ongoing operating costs. At 31 December 2024 and 2023, the fair value of the Group’s trade accounts and other payables approximates their carrying value. 26. Contingent liabilities In the normal course of business, the Group and its subsidiaries are parties to various lawsuits and claims. Management does not expect that the outcome of any of these legal proceedings will have a material adverse effect on the Group’s financial position, operational results or cash flows. Guarantees and performance bonds (CHF million) 2024 2023 Guarantees 199 186 Performance bonds 188 191 Total 387 377 The Group has issued unconditional guarantees of CHF 199 million (2023: CHF 186 million), as well as performance bonds and bid bonds of CHF 188 million (2023: CHF 191 million) to commercial customers on behalf of its subsidiaries. Management believes the likelihood that a material payment will be required under these guarantees is remote. 121 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 27. Equity compensation plans Selected employees of the SGS Group are eligible to participate in equity compensation plans. Grants to members of the Board of Directors In 2024, a total of 6 242 restricted shares were granted to members of the Board of Directors, in settlement of part of their remuneration for the mandate from the 2024 AGM to the 2025 AGM. The restricted shares are blocked for a period of three years from the grant date, until May 2027. The value at grant date of the restricted shares granted was CHF 514 840 (defined as the average closing price of the share during a 20-day period following the payment of the dividends after the Annual General Meeting 2024). Grants to members of the Executive Committee In 2024, a total of 82 831 Performance Share Units (PSUs) under the long-term incentive plan 2024-2026 were granted to members of the Executive Committee. The PSUs vest after a three-year performance period 2024-2026, in March 2027, subject to performance conditions and to continuity of employment of the beneficiaries during the vesting period. The value at grant date of the PSUs granted, being defined as the average closing price of the share during a 20-day period preceding the grant date, was CHF 6 852 609. More information on the long-term incentive plan for members of the Executive Committee in disclosed the SGS Remuneration report on pages 54 to 77. In 2024, a total of 26 914 restricted shares were granted to members of the Executive Committee, in settlement of 50% of the annual incentive related to the 2023 performance. The restricted shares are blocked for a period of three years from the grant date, until May 2027. The value at grant date of the restricted shares granted, being defined as the average closing price of the share during a 20-day period following the payment of the dividends after the 2024 Annual general Meeting, was CHF 2 219 867. 50% of the Annual Incentive related to the 2024 performance of the Executive Committee members will be settled in restricted shares. The grant of the restricted shares will be done after the 2025 Annual General Meeting; the total number of restricted shares to be granted will be calculated dividing 50% of the annual Incentive amount by the average closing price of the share during a 20-day period following the payment of the dividends after the Annual General Meeting 2025, rounded up to the nearest integer. The restricted shares will be blocked for a period of three years from the grant date, until May 2028. More information on the Short-Term Incentive for the members of the Executive Committee in disclosed the SGS Remuneration report on pages 54 to 77. Grants to other employees In 2024, a total of 176 740 Performance Share Units (PSUs) under the long-term incentive plan 2024-2026 were granted to selected senior managers. The PSUs vest after a three-year performance period, 2024-2026, in March 2027, subject to performance conditions and to continuity of employment of the beneficiaries during the vesting period. The value at grant date of the PSUs granted, being defined as the average closing price of the share during a 20-day period preceding the grant date, was CHF 14 621 700. In 2024, a total of 83 288 Restricted Share Units (RSUs) were granted to selected key employees under the restricted share units plan 2024. The RSUs vest three years after the grant date. The value at grant date of the RSUs granted, being defined as the average closing price of the share during a 20-day period preceding the grant date, was CHF 6 890 416. Performance share unit (PSU) and restricted share unit (RSU) plans Description Vesting period from Units outstanding at 31 December 2023 Granted Forfeited Vested Units outstanding at 31 December 2024 SGS-PSU-21 February 24 355 125 – –249 993 –105 132 – SGS-PSU-22 February 25 206 750 – –42 196 –654 163 900 SGS-PSU-23 March 26 286 561 – –79 089 –462 207 010 SGS-PSU-24 March 27 – 259 571 –5 909 –80 253 582 SGS-RSU-21 April 24 39 325 – –650 –38 675 – SGS-RSU-22 April 25 66 350 – –6 450 –150 59 750 SGS-RSU-23 April 26 86 950 – –8 297 –39 78 614 SGS-RSU-24 March 27 – 83 288 –1 586 – 81 702 Total 1 041 061 342 859 –394 170 –145 192 844 558 The Group does not issue new shares to grant employees in relation to the equity-based compensation plans but uses treasury shares, acquired through share buyback programs. In total, as of 31 December 2024, the equity overhang, defined as the total number of unvested share units (844 558 units) divided by the total number of outstanding shares (189 503 259 shares) amounted to 0.45%. The Company’s burn rate, defined as the number of equities granted (restricted shares and share units) granted in 2024 (376 015 units) divided by the total number of outstanding shares, was 0.20%. The Group recognized during the year a total expense of CHF 21 million (2023: CHF 27 million) in relation to equity compensation plans. 122 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Shares available (required) for future plans: Total At 1 January 2023 –17 856 At 1 January 2023 restated after stock-split –446 400 Granted SGS-RSU-23 plan –89 475 Granted SGS-PSU-23 plan –289 509 Shares for PSU forfeited 36 633 Shares for RSU forfeited 8 680 Shares used for Restricted Shares plan as settlement of Short-Term Incentive –33 780 At 31 December 2023 –813 851 Repurchased shares 561 008 Granted SGS-RSU-24 plan –83 288 Granted SGS-PSU-24 plan –259 571 Shares for PSU forfeited 377 187 Shares for RSU forfeited 16 983 Shares used for Restricted Shares plan as settlement of Short-Term Incentive –33 156 At 31 December 2024 –234 688 At 31 December the Group had the following shares available to satisfy various programs: 2024 Total 2023 Total Number of shares held 609 870 227 210 Shares allocated for 2021 RSU plan – –39 325 Shares allocated for 2021 PSU plan – –355 125 Shares allocated for 2022 RSU plan –59 750 –66 350 Shares allocated for 2022 PSU plan –163 900 –206 750 Shares allocated for 2023 RSU plan –78 614 –86 950 Shares allocated for 2023 PSU plan –207 010 –286 561 Shares allocated for 2024 RSU plan –81 702 – Shares allocated for 2024 PSU plan –253 582 – Shares required for future equity compensation plans at 31 December –234 688 –813 851 28. Related-party transactions Transactions between the Company and its subsidiaries, which are related parties of the Group, have been eliminated on consolidation and are not disclosed. Compensation to Directors and members of the Executive Committee The remuneration of Directors and members of the Executive Committee during the year was as follows: (CHF million) 2024 2023 Short-term benefits 20 15 Post-employment benefits 1 1 Share-based payments1 11 12 Total 32 28 1. 2024 represents the value at grant of restricted share units and performance share units granted in 2024 while 2023 represents the value at grant of restricted share units and performance share units granted in 2023. The remuneration of Directors and members of the Executive Committee is determined by the Remuneration Committee. Additional information is disclosed in the SGS Remuneration report. During 2024 and 2023, no member of the Board of Directors or of the Executive Committee had a personal interest in any business transactions of the Group. The Executive Committee participates in the equity compensation plans as disclosed in note 27. The total compensation, including social charges, received by the Board of Directors amounted to CHF 2 654 000 (2023: CHF 2 820 000). The total compensation (cash and shares/options), including social charges, received by the Executive Committee amounted to CHF 29 542 000 (2023: CHF 24 678 000). 123 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Loans to members of governing bodies As at 31 December 2024, no loan, credit or outstanding advance was due to the Group from members or former members of its governing bodies (unchanged from previous year). Transactions with other related parties In 2024 and 2023, the Group did not engage in any activities that generated sales to other related parties. During 2024 and 2023, no related trade receivable balances remained unpaid, nor were any expenses recognized for bad or doubtful debts owed by these related parties. 29. Significant shareholders As at 31 December 2024, Groupe Bruxelles Lambert (acting directly and through Serena SARL, URDAC and FINPAR X) held 19.13% (December 2023: 19.31%), UBS Fund Management (Switzerland) AG held 6.32% (December 2023: 3.03%) and BlackRock Inc. held 5.21% (December 2023: 5.18%) of the share capital and voting rights of the Company. At the same date, the Group held 0.32% of the share capital of the Company (December 2023: 1.64%). 30. Approval of financial statements The Board of Directors is responsible for the preparation and presentation of the financial statements. These financial statements were authorized for issue by the Board of Directors on 10 February 2025, and will be submitted for approval on 26 March 2025 during the Annual General Meeting. 31. Subsequent events On 8 January 2025, SGS completed the acquisition of Aster Global Environmental Solutions, Inc., an industry-leading company focused on validation and verification of greenhouse gas (GHG) emissions and offsets, as well as forestry, ecosystem, and corporate and social responsibility services based in the USA. The acquisition is effective from 1 January 2025. On 15 January 2025, SGS completed the acquisition of Stella Operazioni Doganal, an independent customs operations and consulting company based in Italy. The acquisition is effective from 1 January 2025. On 20 January 2025, SGS completed the acquisition of RTI Laboratories, a leading provider of environmental and materials testing services based in Detroit, Michigan, USA. The acquisition is effective from 1 February 2025. 124 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information PricewaterhouseCoopers SA, Avenue Giuseppe-Motta 50, 1202 Genève Téléphone : +41 58 792 91 00, www.pwc.ch PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Report of the statutory auditor to the General Meeting of SGS SA, Geneva Report on the audit of the consolidated financial statements Opinion We have audited the consolidated financial statements of SGS SA and its subsidiaries (the Group), which comprise the consolidated income statement and consolidated statement of comprehensive income for the year ended 31 December 2024, the consolidated statement of financial position as at 31 December 2024, the consolidated statement of cash flows and the consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including material accounting policy information. In our opinion, the consolidated financial statements (pages 86 to 124 and pages 144 to 145) give a true and fair view of the consolidated financial position of the Group as at 31 December 2024 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with IFRS Accounting Standards and comply with Swiss law. Basis for opinion We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISA) and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the consolidated financial statements' section of our report. We are independent of the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, as well as the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit approach Overview Overall group materiality: CHF 41 million We concluded full scope audit work at 15 components. In addition, specific scope audits were performed on a further 19 components. Our audit scope addressed over 65% of Group’s sales. As key audit matters the following areas of focus have been identified: • Measurement of work in progress (WIP) • Taxation 125 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2 SGS SA | Report of the statutory auditor to the General Meeting Materiality The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall Group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the consolidated financial statements as a whole. Overall group materiality CHF 41 million Benchmark applied Three-years average profit before tax Rationale for the materiality benchmark applied We chose profit before tax as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured. The three-years average reflects current market volatility. Moreover, profit before tax is a generally accepted benchmark for materiality considerations. We agreed with the Audit Committee that we would report to them misstatements above CHF 2 million identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons. Audit scope We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. Due to the nature of its business and its organisation, the Group has a decentralised structure and operates in 115 countries in five main geographical areas (Asia Pacific, Europe, North America, Eastern Europe/Middle East and Africa, Latin America). We instructed audit teams in 13 countries to perform a full scope audit and audit teams in another 13 countries to perform a specific scope audit (principally sales, account receivables, work in progress and unbilled sales). These teams audit the respective account balances as well as classes of transactions and report to us on their audit results in response to the audit instructions we sent to them. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 126 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3 SGS SA | Report of the statutory auditor to the General Meeting Measurement of work in progress (WIP) Key audit matter How our audit addressed the key audit matter Work-in-progress balances are calculated and reported under the consolidated financial statement line entitled ‘Unbilled sales and work in progress’ the total of both amounting to CHF 247 million as of 31 December 2024 (CHF 223 million as of 31 December 2023) Work-in-progress is recognized for partially completed performance obligations under a contract. Progress is measured using observable output or input methods. A proportion of the expected margin upon completion is recognized based on the actual costs incurred relative to the total expected costs, provided the project is expected to be profitable upon completion. Assessing the degree of progress and estimating the expected margin require significant management judgment. Given the significance and relevance for the consolidated financial statements, we deemed the measurement of work-in-progress as a key audit matter. Refer to the corresponding accounting policy in Note 2 – Significant accounting policies and exchange rates, and to Note 4 – Sales from contracts with customers in the notes to the consolidated financial statements. We reviewed SGS's sales recognition policy and obtained an understanding of how work-in-progress balances are accounted for. Our audit approach consisted of the following procedures, in particular: • We assessed the design and implementation of the key controls relating to the monitoring of work-in- progress balances. • We selected samples of work-in-progress balances and traced them to underlying contracts and invoices with customers. • We obtained comfort over the degree of progress from discussions with project managers and performed reconciliations to actual numbers recognised in the financial statements in selected cases. • We selected samples of work-in-progress balances recorded at the previous period-end and compared them to subsequent invoices and cash received from clients in order to evaluate the reliability of management's estimation process. • We analysed the aging of the open balances and assessed the appropriateness of provisions recognised in accordance with the Group’s provision grid. • For entities with significant work-in-progress balances not subject to our Group audit, we performed central audit procedures. On the basis of the procedures performed, we consider management’s approach for assessing the degree of progress and for expected margin estimation to be reasonable. Taxation Key audit matter How our audit addressed the key audit matter The Group is subject to taxation in many jurisdictions and management makes judgements about the incidence and magnitude of tax liabilities that are subject to the future outcome of assessments by the relevant tax authorities. Accordingly, the calculation of tax expense and the related liability are subject to inherent uncertainty. To make these judgements, the Group has a structured process whereby management systematically monitors and assesses the existence, development and settlement of tax risks in each of its jurisdictions. The Group’s main tax risks are i) that the tax authorities might not accept the transfer prices applied and ii) potential adverse results of ongoing tax audits. In accordance with its methodology, provisions for uncertain tax positions are calculated and included within current tax liabilities (CHF 186 million as at 31 December 2024). Refer to the corresponding accounting policy in Note 2 – Significant accounting policies and exchange rates and to Note 8 - Taxes in the notes to the consolidated financial statements. Our audit approach consisted of the following procedures, in particular: • We assessed the existence of tax exposures by means of inquiry with local and Group management. • We discussed management’s process to assess the risk of tax liabilities in the different jurisdictions as a result of potential challenges to the tax positions, and tested measurement and timing of recognition of the provisions when applicable. • With the support of PwC's internal tax experts, we examined the documentation outlining the matters in dispute or at risk and the benchmarks relied upon for transfer pricing, and used our knowledge of the tax laws and other similar taxation matters to assess the available evidence, management’s judgmental processes and the provisions. On the basis of the procedures performed, we conclude that management’s process for determining uncertain tax positions was reasonable. 127 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 4 SGS SA | Report of the statutory auditor to the General Meeting Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements, the consolidated financial statements, the remuneration report and our auditor’s reports thereon. Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board of Directors’ responsibilities for the consolidated financial statements The Board of Directors is responsible for the preparation of consolidated financial statements, that give a true and fair view in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISA and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with Swiss law, ISA and SA-CH, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. • Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. 128 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5 SGS SA | Report of the statutory auditor to the General Meeting • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the consolidated financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them regarding all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other legal and regulatory requirements In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control system that has been designed, pursuant to the instructions of the Board of Directors, for the preparation of the consolidated financial statements. We recommend that the consolidated financial statements submitted to you be approved. PricewaterhouseCoopers SA Guillaume Nayet Mario Berckmoes Licensed audit expert Licensed audit expert Auditor in charge Geneva, 10 February 2025 129 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Income statement For the years ended 31 December (CHF million) Notes 2024 2023 Dividends from subsidiaries 328 646 Total operating income 328 646 Other operating expenses –13 –6 Total operating expenses –13 –6 Operating result 315 640 Financial income 6 110 98 Exchange gain, net – 1 Financial expenses 6 –79 –79 Financial result 31 20 Extraordinary losses 7 –53 –26 Profit before taxes 293 634 Taxes –11 –8 Profit for the period 282 626 3. SGS SA financial statements 130 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Statement of financial position at 31 December (Before appropriation of available retained earnings) (CHF million) Notes 2024 2023 Assets Current assets Cash and cash equivalents 15 419 Derivative assets 3 18 Amounts due from subsidiaries 375 449 Other receivables and prepayments 6 6 Total current assets 399 892 Non-current assets Loans to subsidiaries 2 021 1 667 Other financial assets 4 4 Other assets 1 2 Investments in subsidiaries 1 824 2 003 Total non-current assets 3 850 3 676 Total assets 4 249 4 568 Shareholders’ equity and liabilities Current liabilities Bank overdraft – 8 Derivative liabilities 13 14 Trade and other payables 8 1 Amounts due to subsidiaries 404 625 Corporate bonds 3 375 250 Accrued expenses 13 12 Total current liabilities 813 910 Non-current liabilities Amounts due to subsidiaries 702 570 Corporate bonds 3 1 950 2 325 Total non-current liabilities 2 652 2 895 Shareholders’ equity Share capital 4 and 5 8 7 Legal reserve 4 and 5 34 34 Retained earnings 4 and 5 797 951 Treasury shares 4 and 5 –55 –250 Reserve for treasury shares held by a subsidiary 4 and 5 – 21 Total shareholders’ equity 784 763 Total shareholders’ equity and liabilities 4 249 4 568 131 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Notes SGS SA (‘the Company’) is the ultimate parent company of the SGS Group which owns and finances, either directly or indirectly, its subsidiaries and joint ventures throughout the world. The head office is located in Geneva, Switzerland. The average number of employees in 2024 is less than 10 people for this company (2023: less than 10). 1. Significant accounting policies The financial statements are prepared in accordance with accounting principles required by Swiss law (32nd chapter of the Swiss Code of Obligations). Investments in subsidiaries Investments in subsidiaries are valued individually at acquisition cost less an adjustment for impairment where required. Foreign currencies Balance sheet items denominated in foreign currencies are converted into Swiss Francs at year-end exchange rates with the exception of investments in subsidiaries which are valued at the historical exchange rate. Foreign currency transactions are translated using the actual exchange rates prevailing during the year. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of assets and liabilities denominated in foreign currencies are recognized in the income statement. Derivatives The Company uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising from operational, financing and investment activities. In accordance with its treasury policy, the Company does not hold or issue derivative financial instruments for trading purposes. Derivatives are accounted for on a mark-to-market basis. Derivative financial instruments are initially recognized at fair value and subsequently remeasured at fair value through the income statement (FVTPL). The fair value of forward exchange contracts is determined with reference to market prices at the balance sheet date. Dividends from subsidiaries Dividends are treated as an appropriation of profit in the year in which they are ratified at the Annual General Meeting and subsequently paid, rather than as an appropriation of profit in the year to which they relate or for which they are proposed by the Board of Directors. As a result, dividends are recognized as an income in the year in which they are received, on a cash basis. Dividends are recorded in the currency defined for each affiliate and converted at spot rate in the income statement. Bonds Bonds are recorded at nominal value. 2. Subsidiaries The list of principal Group subsidiaries appears in the annual report on pages 144 to 145. In 2020, the Company acquired 80% of the capital of Ryobi Geotechnique Pte Ltd in Singapore. The share purchase agreement includes an option to acquire the remaining 20% of Ryobi Geotechnique Pte Ltd in 2026. In 2024, the Company acquired 67.6% of the capital of CertX based in Switzerland. The share purchase agreement includes an option to acquire the remaining 32.4% of CertX in 2028. 3. Corporate bonds The Company made the following bond issuances: Date of issue Face value in CHF million Coupon in % Year of maturity Issue price in % Redemption price in % 29.10.2018 225 0.750 2025 100.068 100.000 05.09.2022 150 1.250 2025 100.000 100.000 Short-term bonds 375 08.05.2015 225 0.875 2030 100.245 100.000 03.03.2017 375 0.550 2026 100.153 100.000 29.10.2018 175 1.250 2028 101.157 100.000 06.05.2020 325 0.950 2026 100.182 100.000 05.09.2022 350 1.700 2029 100.197 100.000 17.11.2023 240 2.000 2027 100.038 100.000 17.11.2023 260 2.300 2031 100.127 100.000 Long-term bonds 1 950 As at 31 December 2024, two bonds in the above table are classified as short-term liabilities as the due date is less than a year. The Company has listed all bonds on the SIX Swiss Exchange. 132 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 4. Total equity (CHF million) Share capital Legal reserve Reserve for treasury shares held by a subsidiary Treasury shares Retained earnings Total Balance at 1 January 2023 7 34 29 –250 907 727 Dividends paid – – – – –590 –590 Decrease in the reserve for treasury shares – – –8 – 8 – Profit for the year – – – – 626 626 Balance at 31 December 2023 7 34 21 –250 951 763 Capital increase from scrip dividend¹ 1 – – – – 1 Dividends paid¹ – – – – –207 –207 Decrease in the reserve for treasury shares – – –21 – 21 – Cancellation of treasury shares² – – – 250 –250 – Movement on treasury shares – – – –55 – –55 Profit for the year – – – – 282 282 Balance at 31 December 2024 8 34 – –55 797 784 1. On 22 April 2024, SGS announced that 64.87% of the dividend for the financial year 2023 was elected to be paid in the form of new SGS shares, while the remaining 35.13% was to be paid out in cash. On 25 April 2024, the 2023 dividend, totalling CHF 590 million, was distributed as follows: – CHF 207 million in cash – CHF 383 million in new shares. 4 964 934 new SGS shares were created, generating an increase of share capital of CHF 0.2 million. 2. On 30 August 2024, 2 837 475 shares were cancelled (CHF 250 million). 5. Share capital Shares in circulation Treasury shares Total shares issued Total share capital CHF (million) Balance at 1 January 2023 7 369 054 125 978 7 495 032 7 Treasury shares released into circulation 1 964 –1 964 – – Balance at 12 April 2023 before share split 7 371 018 124 014 7 495 032 7 Share split 25-1 176 904 432 2 976 336 179 880 768 – Balance at 12 April 2023 after share split 184 275 450 3 100 350 187 375 800 7 Treasury shares released into circulation 35 665 –35 665 – – Balance at 31 December 2023 184 311 115 3 064 685 187 375 800 7 Treasury shares released into circulation 178 348 –178 348 – – Treasury shares purchased for equity compensation plans –561 008 561 008 – – New shares issued from scrip dividend 4 964 934 – 4 964 934 1 Cancellation of treasury shares – –2 837 475 –2 837 475 – Balance at 31 December 2024 188 893 389 609 870 189 503 259 8 Issued share capital The company’s Annual General Meeting held on 26 March 2024 had offered its shareholders the possibility to receive the 2023 dividend in cash or in new SGS shares. The scrip dividend take-up rate was 64.87% which led to the creation of 4 964 934 new shares, delivered on 25 April 2024. As at 31 December 2024, the Company has a share capital of CHF 7 580 130 (2023: CHF 7 495 032) fully paid-in and divided into 189 503 259 (2023: 187 375 800) registered shares of a par value of CHF 0.04 (2023: CHF 0.04). All shares, other than treasury shares, participate equally in the dividends declared by the Company and have equal voting rights. On 28 March 2023, the Annual General Assembly approved a 25-1 stock split that went into effect on 12 April 2023. This split increased the number of shares issued, from 7 495 032 to 187 375 800, and reduced the nominal value per share, from CHF 1 to CHF 0.04. Treasury shares On 31 December 2024, SGS SA held 609 870 treasury shares directly. All shares from the affiliate company were transferred to SGS SA. In 2024, 178 348 shares were released into circulation, 561 008 were repurchased and 2 827 475 were cancelled. On 31 December 2023, SGS SA held 3 064 685 treasury shares, thereof 2 837 475 directly and 227 210 through an affiliate company. In 2023, 84 765 shares were released into circulation. 133 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6. Financial income and financial expenses (CHF million) 2024 2023 Interest income third party 3 5 Interest income Group 106 93 Other financial income 1 – Financial income 110 98 Interest expenses third party –42 –31 Interest expenses Group –35 –41 Other financial expenses –2 –7 Financial expenses –79 –79 7. Extraordinary losses The extraordinary losses are composed of impairment on investments in subsidiaries of CHF –46 million (2023: CHF –27 million) and on loans to subsidiaries of CHF –7 million (2023: CHF 1 million). 8. Guarantees and comfort letters (CHF million) 2024 issued 2024 utilized 2023 issued 2023 utilized Guarantees 3 164 1 143 3 105 1 467 Performance bonds 72 45 68 38 Total 3 236 1 188 3 173 1 505 The Company has unconditionally guaranteed or provided comfort to financial institutions providing credit facilities (loans and guarantee bonds) to its subsidiaries. In addition, it has issued performance bonds to commercial customers on behalf of its subsidiaries. The Company is part of a VAT Group with other group companies in Switzerland. 9. Remuneration 9.1. Remuneration awarded to the Board of Directors This section appears in the SGS Remuneration report paragraph 6 in the annual report on pages 65 to 69. 9.2. Remuneration awarded to the Executive Committee members This section appears in the SGS Remuneration report paragraph 7 in the annual report on pages 70 to 77. 10. Shares and options held by members of governing bodies 10.1. Shares and options held by members of the Board of Directors The following table shows the shares held by members of the Board of Directors as at 31 December 2024: Name Shares C. Grieder 16 712 J. Riedl 1 238 P. Cheung 1 732 K. Sorenson 3 946 I. Gallienne 1 713 S. Atiya 4 032 T. Hartmann 1 688 J. Vergis 1 732 The following table shows the shares held by members of the Board of Directors as at 31 December 2023: Name Shares C. Grieder 14 128 S.R. du Pasquier 2 257 J. Riedl 607 P. Cheung 1 082 K. Sorenson 3 207 I. Gallienne 1 082 S. Atiya 3 382 T. Hartmann 1 082 J. Vergis 1 082 134 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 10.2. Shares and options held by Executives The following table shows the shares and restricted shares held by Executive Committee members as at 31 December 2024: Name Corporate responsibility Restricted shares Shares G. Picaud Chief Executive Officer 192 920 T. Abasov Head of Eastern Europe, Middle East and Africa 5 001 22 964 S. Du Head of Asia Pacific 4 211 3 668 D. Govender Head of North America 4 653 13 651 E. Jokubauskas Head of Industries & Environment and Natural Resources – 2 504 C. Ly Wa Hoi Head of Connectivity & Products and Health & Nutrition 3 982 7 644 J. McDonald Head of Business Assurance 5 356 10 023 R. Navazo Head of Latin America – – M. Oesch Group General Counsel – – D. Plaza Chief Information Officer – – M. Reid Head of Europe 4 590 40 416 J. Roberts Chief People Officer – – M. Vlatchkova Chief Financial Officer – – The following table shows the shares and restricted shares held by former senior management as at 31 December 2023: Name Corporate responsibility Restricted shares Shares F. Ng Chief Executive Officer 14 726 95 000 G. Picaud Chief Financial Officer (from 1 December 2023) – 500 O. Merkt General Counsel and Chief Compliance Officer 3 001 8 750 Details of the various plans are explained in the SGS Remuneration report. 11. Significant shareholders As at 31 December 2024, Groupe Bruxelles Lambert (acting directly and through Serena SARL, URDAC and FINPAR X) held 19.13% (December 2023: 19.31%), UBS Fund Management (Switzerland) AG held 6.32% (December 2023: 3.03%) and BlackRock Inc. held 5.21% (December 2023: 5.18%) of the share capital and voting rights of the Company. At the same date, the SGS Group held 0.32% of the share capital of the Company (December 2023: 1.64%). 12. Approval of financial statements and subsequent events The Board of Directors is responsible for the preparation and presentation of the financial statements. These financial statements were authorized for issue by the Board of Directors on 10 February 2025 and will be submitted for approval by the Annual General Meeting to be held on 26 March 2025. Proposal of the Board of Directors for the appropriation of available retained earnings (CHF) 2024 2023 Profit for the year 282 329 483 625 502 400 Balance brought forward from previous years 701 175 157 657 434 309 Dividend distributed¹ –207 576 155 –589 608 000 Movement on Treasury Shares –54 396 478 – (Transfer to)/Reversal from the reserve for treasury shares 21 042 758 7 846 448 Total retained earnings available for appropriation 742 574 765 701 175 157 1. No dividend is paid on own shares held directly or indirectly by the Company. Distribution to shareholders The SGS Board of Directors will recommend to the Annual General Meeting (to be held on 26 March 2025) the approval of an optional scrip dividend of CHF 3.20 per share (CHF 604 million), subject to the approval of a capital increase, where shareholders can elect to receive the dividend in the form of shares or in cash. Shares will be sourced from the issuance of new shares in the proposed capital increase. The shares will be delivered at a discount, and the share dividend will be a tax- and cost-effective option for shareholders. Depending on the choices of the shareholders the above total amount of retained earnings will be reduced: • By CHF 3.20 for each share for which a cash dividend is paid in (no dividends are paid on treasury shares) • By CHF 0.04 for each dividend share The remaining amount will constitute the balance being carried forward. 135 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information PricewaterhouseCoopers SA, Avenue Giuseppe-Motta 50, 1202 Genève Téléphone : +41 58 792 91 00, www.pwc.ch PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Report of the statutory auditor to the General Meeting of SGS SA, Geneva Report on the audit of the financial statements Opinion We have audited the financial statements of SGS SA (the Company), which comprise the income statement for the year ended 31 December 2024, the statement of financial position as at 31 December 2024, and notes to the financial statements, including a summary of significant accounting policies. In our opinion, the financial statements presented on pages 130 to 135, comply with Swiss law and the Company’s articles of incorporation. Basis for opinion We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the 'Auditor’s responsibilities for the audit of the financial statements' section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit approach Overview Overall materiality: CHF 41 million We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the Company, the accounting processes and controls, and the industry in which the Company operates. As key audit matter the following area of focus has been identified: • Valuation of investments in subsidiaries Materiality The scope of our audit was influenced by our application of materiality. Our audit opinion aims to provide reasonable assurance that the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall materiality for the financial statements as a whole as set out in the table below. These, together with qualitative 136 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2 SGS SA | Report of the statutory auditor to the General Meeting considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole. Overall materiality CHF 41 million Benchmark applied Total assets Rationale for the materiality benchmark applied We chose total assets as the benchmark because, in our view, it is the benchmark against which the performance of the Company, which has limited operating activities and which mainly holds investments in subsidiaries and intra-group loans, is commonly measured, and it is a generally accepted benchmark for holding companies. We agreed with the Audit Committee that we would report to them misstatements above CHF 2 million identified during our audit as well as any misstatements below that amount which, in our view, warranted reporting for qualitative reasons. Audit scope We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we considered where subjective judgements were made; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Valuation of investments in subsidiaries Key audit matter How our audit addressed the key audit matter As at 31 December 2024, SGS SA's investments in subsidiaries amount to CHF 1’824 million. Given the significance of this amount in the financial statements and because of the judgement used by management in determining its value, we consider the valuation of investments in subsidiaries a key audit matter. The Company measures individually the investment in each subsidiary at acquisition cost less adjustment for impairment where required. The Company conducts an annual risk assessment based on several impairment indicators to identify investments with an impairment risk. For those investments in subsidiaries with a higher identified risk of impairment, the recoverable amount is determined based on a five-year discounted cashflow forecast. The main judgements applied by management relate to revenue and margin growth throughout the period of the five-year plan, the long-term growth rate beyond the detailed forecast period and the discount rate. An impairment is recognised if the recoverable amount of an individual investment is lower than its carrying value. We obtained the Company’s work on the valuation of investments in subsidiaries, and we performed the following procedures: • We obtained an understanding of management's process over the valuation of investments in subsidiaries. • We tested the mathematical accuracy of the calculations, the reasonableness of the applied model, considered the appropriateness of the accounting treatment and reconciled the balances to the financial statements. • We challenged the appropriateness of management’s process to identify impairment indicators by comparing the triggers used to common indicators such as historical profitability and capacity to pay dividends. • We also performed testing by calculating revenue and operating profit multipliers based on the market capitalisation of the Group and comparing those to the respective multiples of the individual investments in subsidiaries. 137 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3 SGS SA | Report of the statutory auditor to the General Meeting Key audit matter How our audit addressed the key audit matter The results of management’s impairment testing indicated that some investments in subsidiaries were impaired. As a result, management recognised an impairment in the amount of CHF 46 million. Refer to Note 1 – Significant accounting policies and Note 7 - Extraordinary losses For those investments in subsidiaries with a higher identified risk of impairment, we critically assessed the reasonableness of the underlying key assumptions and judgements applied by performing the following procedures in particular: • We assessed the quality of the five-year cashflow forecast projections by comparing forecasted revenue and margin growth to historical results as well as by holding discussions with group management to assess their intention and ability to execute the strategic initiatives. • We evaluated, with the support of PwC's valuation specialists, the reasonableness of the discount rate and long-term growth rate applied to those future cash flows. We consider management's approach as an acceptable and reasonable basis for the valuation of the investments in subsidiaries. Other information The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements, the consolidated financial statements, the remuneration report and our auditor’s reports thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Board of Directors’ responsibilities for the financial statements The Board of Directors is responsible for the preparation of financial statements in accordance with the provisions of Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: 138 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 4 SGS SA | Report of the statutory auditor to the General Meeting • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made. • Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them regarding all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on other legal and regulatory requirements In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm the existence of an internal control system that has been designed, pursuant to the instructions of the Board of Directors, for the preparation of the financial statements. Based on our audit according to article 728a para. 1 item 2 CO, we confirm that the Board of Directors' proposal complies with Swiss law and the Company’s articles of incorporation. We recommend that the financial statements submitted to you be approved. PricewaterhouseCoopers SA Guillaume Nayet Mario Berckmoes Licensed audit expert Licensed audit expert Auditor in charge Geneva, 10 February 2025 139 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information SGS Group – five-year statistical data consolidated income statements For the years ended 31 December (CHF million) 2024 2023 2022 2021 2020 Sales 6 794 6 622 6 642 6 405 5 604 Salaries and wages –3 427 –3 316 –3 331 –3 180 –2 797 Subcontractors’ expenses –414 –400 –399 –385 –352 Depreciation, amortization and impairment –476 –545 –521 –499 –517 Gain on business disposals – 7 – – 63 Other operating expenses –1 573 –1 511 –1 493 –1 364 –1 206 Operating income (EBIT) 904 857 898 977 795 Financial income 34 29 20 16 12 Financial expenses –94 –86 –71 –69 –66 Share of profit of associates and joint ventures 3 2 2 – 1 Profit before taxes 847 802 849 924 742 Taxes –222 –205 –219 –269 –237 Profit for the year 625 597 630 655 505 Profit attributable to: Equity holders of SGS SA 581 553 588 613 480 Non-controlling interests 44 44 42 42 25 Operating income margins in % 13 13 14 15 14 Average number of Full Time Equivalents 99 182 98 545 96 759 93 297 89 098 4. Historical data Financial statements Corporate governance Remuneration report Management report 140 Non-financial statements Shareholder information SGS | 2024 Integrated Report SGS Group – five-year statistical data consolidated statements of financial position At 31 December (CHF million) 2024 2023 2022 2021 2020 Property, plant and equipment 837 823 907 925 872 Right-of-use assets 548 506 577 605 590 Goodwill 1 783 1 636 1 755 1 778 1 651 Other intangible assets 304 275 350 382 333 Investments in joint-ventures, associates and other 19 16 20 26 34 Deferred tax assets 213 185 153 164 161 Other non current-assets 199 191 125 173 154 Total non-current assets 3 903 3 632 3 887 4 053 3 795 Assets classified as held for sale 17 – – – – Inventories 55 57 59 59 57 Unbilled revenues and work in progress 247 223 210 175 160 Trade receivables 991 940 988 928 856 Other receivables and prepayments 217 213 223 204 188 Current tax assets 109 127 132 108 77 Marketable securities – – – – 9 Cash and cash equivalents 1 210 1 569 1 623 1 480 1 766 Total current assets 2 846 3 129 3 235 2 954 3 113 Total assets 6 749 6 761 7 122 7 007 6 908 Share capital 8 7 7 7 8 Reserves 844 723 954 1 118 1 282 Treasury shares –55 –271 –279 –8 –230 Equity attributable to equity holders of SGS SA 797 459 682 1 117 1 060 Non-controlling interests 80 69 81 85 74 Total equity 877 528 763 1 202 1 134 Loans and other financial liabilities 2 700 3 040 2 833 2 889 2 390 Lease liabilities 409 384 442 481 470 Deferred tax liabilities 73 73 79 92 53 Defined benefit obligations 64 66 47 84 136 Provisions 101 91 96 90 88 Total non-current liabilities 3 347 3 654 3 497 3 636 3 137 Trade and other payables 624 634 671 687 658 Contract liabilities 261 221 228 221 189 Current tax liabilities 186 176 165 169 140 Loans and other financial liabilities 612 841 1 009 282 863 Lease liabilities 159 143 162 155 151 Provisions 72 41 58 60 85 Other creditors and accruals 611 523 569 595 551 Total current liabilities 2 525 2 579 2 862 2 169 2 637 Total liabilities 5 872 6 233 6 359 5 805 5 774 Total equity and liabilities 6 749 6 761 7 122 7 007 6 908 Financial statements Corporate governance Remuneration report Management report 141 Non-financial statements Shareholder information SGS | 2024 Integrated Report SGS Group – five-year statistical share data (CHF unless indicated otherwise) 2024 2023 2022 2021 2020 Share information Registered shares Number of shares issued 189 503 259 187 375 800 7 495 032 7 495 032 7 565 732 Number of shares with dividend rights 188 893 389 184 311 115 7 369 054 7 491 672 7 469 238 Price High 98 94 3 076 3 059 2 843 Low 70 72 2 002 2 595 1 974 Year-end 91 73 2 150 3 047 2 670 Par value 0.04 0.04 1 1 1 Key figures by shares Equity attributable to equity holders of SGS SA per share in circulation at 31 December 4.22 2.49 92.56 149.20 141.91 Basic earnings per share1 3.10 3.00 78.86 81.91 64.05 Dividend per share ordinary 3.20 3.20 80.00 80.00 80.00 Total dividend per share 3.20 3.20 80.00 80.00 80.00 Dividends (CHF million) Ordinary2 604 590 590 599 598 Total 604 590 590 599 598 1. Calculation of the basic earnings per share (weighted average for the year) is disclosed in note 9 of SGS Group Results. 2. The SGS Board of Directors will recommend to the Annual General Meeting (to be held on 26 March 2025) the approval of an optional scrip dividend of CHF 3.20 per share (CHF 604 million), subject to the approval of a capital increase, where shareholders can elect to receive the dividend in the form of shares or in cash. Shares will be sourced from the issuance of new shares in the proposed capital increase. The shares will be delivered at a discount, and the share dividend will be a tax- and cost-effective option for shareholders. SGS Group share information Share transfer SGS SA has no restrictions as to share ownership, except that registered shares acquired in a fiduciary capacity by third parties may not be registered in the shareholders’ register, unless a special authorization has been granted by the Board of Directors. Market capitalization At the end of 2024 market capitalization was approximately CHF 17 167 million (2023: CHF 13 370 million). Shares are quoted on the SIX Swiss Exchange. Credit rating (as of publication date of Integrated Report) Rating agency Long-term rating Short-term rating Moody's Investor Services A3, negative outlook P-2 Financial statements Corporate governance Remuneration report Management report 142 Non-financial statements Shareholder information SGS | 2024 Integrated Report 50 60 70 80 90 100 110 120 130 140 150 15 000 14 000 13 000 12 000 11 000 10 000 9 000 8 000 7 000 6 000 5 000 J F M A M J J A S O N D J F M A M J J A S O N D 2023 2024 High price Low price Closing Swiss market index (monthly close) SMI SGS SA Closing prices for SGS and the Swiss market index (SMI) 2023-2024 Financial statements Corporate governance Remuneration report Management report 143 Non-financial statements Shareholder information SGS | 2024 Integrated Report The disclosure of significant subsidiaries is limited to entities whose contribution to the Group consolidated financial statements in 2024 represent at least 0.5% of consolidated sales or 1% of consolidated assets as well as the material direct subsidiaries of SGS SA. Country Name and domicile Issued capital currency Issued capital amount % held by Group Direct / indirect Argentina SGS Argentina S.A., Buenos-Aires ARS 1 139 599 536 100 D Australia SGS Australia Pty. Ltd., Bentley AUD 200 000 100 I Australia SGS Australia Holdings Pty. Ltd., Bentley AUD 182 132 400 100 D Belgium SGS Belgium N.V., Antwerpen EUR 35 995 380 100 I Brazil SGS do Brasil Ltda, Barueri-SP BRL 648 683 068 100 D Brazil SGS Industrial – Instalaçaões, Testes e Comissionamentos Ltda, Barueri-SP BRL 91 266 840 100 D Canada SGS Canada Inc., Mississauga CAD 20 900 000 100 D Chile SGS Minerals S.A., Santiago de Chile CLP 29 725 583 703 100 I Chile SGS Chile Limitada, Santiago de Chile CLP 98 282 986 251 100 D China SGS-CSTC Standards Technical Services Co. Ltd., Beijing USD 3 966 667 85 I China SGS-CSTC Standards Technical Services (Shanghai) Co., Ltd., Shanghai CNY 180 000 000 85 I China SGS-CSTC Standards Technical Services (Tianjin) Co., Ltd., Tianjin CNY 3 000 000 85 I China SGS-CSTC Standard Technical Services (Qingdao) Co., Ltd., Qingdao CNY 20 000 000 85 I Colombia SGS Colombia S.A.S., Bogota COP 135 546 166 036 100 D France SGS France SAS, Arcueil EUR 3 976 579 100 I Germany SGS Institut Fresenius GmbH, Taunusstein EUR 7 490 100 100 I Germany SGS Germany GmbH, Hamburg EUR 1 210 000 100 I Germany SGS Analytics Germany GmbH, Fellbach EUR 255 000 100 I Germany SGS-TÜV Saar GmbH, Sulzbach EUR 750 000 74.9 I Great Britain SGS United Kingdom Limited, Ellesmere Port GBP 8 000 000 100 I Great britain SGS Quay Pharmaceuticals Ltd, Deeside GBP 107 647 100 I Hong kong SGS Hong Kong Limited, Hong Kong HKD 200 000 100 D India SGS India Private Ltd., Mumbai INR 960 000 100 D Italy SGS Italia S.p.A., Milan EUR 2 500 000 100 D Japan SGS Japan Inc., Yokohama JPY 100 000 000 100 D Malaysia SGS (Malaysia) Sdn. Bhd., Kuala Lumpur RM 500 000 100 D Mexico SGS de Mexico, S.A. de C.V., Mexico MXN 281 370 828 100 D Netherlands SGS Nederland B.V., Spijkenisse EUR 250 000 100 I Netherlands SGS Brightsight BV, Delft EUR 245 100 100 I New Zealand SGS New Zealand Limited, Auckland-Onehunga NZD 12 022 190 100 D Peru SGS del Perú S.A.C., Lima PEN 91 901 082 100 D Poland SGS Polska Sp.z o.o., Warsaw PLN 28 217 200 100 D Russia AO SGS Vostok Limited, Moscow RUB 18 000 000 100 D Saudi Arabia SGS Inspection Services Saudi Arabia Ltd., Jeddah SAR 1 000 000 75 D 5. List of significant subsidiaries Financial statements Corporate governance Remuneration report Management report 144 Non-financial statements Shareholder information SGS | 2024 Integrated Report Country Name and domicile Issued capital currency Issued capital amount % held by Group Direct / indirect Singapore Ryobi Geothechnique International Pte Ltd., Singapore SGD 1 500 000 80 D Singapore SGS Testing and Control Services Singapore Pte Ltd., Singapore SGD 20 100 000 100 D South Africa SGS South Africa (Proprietary) Limited, Johannesburg ZAR 1 007 279 500 100 I South Africa SGS Technical Services (PTY) Ltd, Johannesburg ZAR 775 279 000 100 D South Korea SGS Korea Co., Ltd., Seoul KRW 15 617 540 000 100 D Spain SGS Tecnos, S.A., Sociedad Unipersonal, Madrid EUR 92 072 034 100 I Spain SGS Española de Control, S.A.U., Madrid EUR 240 000 100 I Spain General de Servicios ITV, S.A.U., Madrid EUR 4 753 483 100 I Sweden SGS Analytics Sweden AB, Linköping SEK 1 018 250 100 I Switzerland SGS Société Générale de Surveillance SA, Geneva CHF 100 000 100 D Taiwan SGS Taiwan Limited, Taipei TWD 62 000 000 100 I Thailand SGS (Thailand) Limited, Bangkok THB 20 000 000 99.99 D Turkey SGS Supervise Gözetme Etüd Kontrol Servisleri AS, Istanbul TRY 6 550 000 100 I Ukraine SGS Ukraine, Foreign Enterprise, Odessa USD 400 000 100 D United Arab Emirates SGS Gulf Limited Jebel Ali Free Zone – Dubai Branch – – – – United States SGS North America Inc., Wilmington USD 73 701 996 100 I United States Maine Pointe, LLC, Duxbury USD – 100 I Vietnam SGS Vietnam Ltd., Ho Chi Minh City USD 288 000 100 D Financial statements Corporate governance Remuneration report Management report 145 Non-financial statements Shareholder information SGS | 2024 Integrated Report 6. Alternative performance measures Glossary Adjusted basic earnings per share (adjusted basic EPS) 148 Adjusted diluted earnings per share (adjusted diluted EPS) 149 Adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) 148 Adjusted operating income 147 Adjusted operating income margin 147 Adjusted profit attributable to shareholders 148 Basic earnings per share before restructuring costs 149 Cash conversion 150 Constant currency 146 Diluted earnings per share before restructuring costs 149 Earnings before interest, tax, depreciation and amortization (EBITDA) 147 Free cash flow 150 Leverage 151 Net debt 151 Organic sales growth 146 Profit attributable to shareholders before restructuring costs 149 Return on invested capital (ROIC) 150 The following document presents and defines the Group’s alternative performance measures (APMs), not defined by IFRS which are used to evaluate financial and operational performance. Where relevant, a reconciliation to the information included in the Group IFRS consolidated financial statements is presented. Management deems these performance measures as a useful source of information when taking decisions and managing the operations. These alternative performance measures are disclosed in the integrated report, the half year report, the quarter reports and other external communications to investors, and are available following this link: www.sgs.com/en/investors/reports Constant currency The constant currency calculation is used in order to assess the period over period evolution of financial indicators without the currency impact. SGS calculates constant currency measures by translating the current year numbers at prior year average exchange rates (except for currencies with a devaluation of above 50% between the two comparable periods, for which the current year average rate is applied to the prior year baseline). Organic sales growth Organic sales growth is used by management to evaluate the evolution of existing operations, excluding the changes in scope (impacts of business acquisitions and divestments) and currency fluctuations. This provides a ‘like-for-like’ comparison with the previous period in constant scope and constant currency, enabling deeper understanding of the business dynamics which contribute to the evolution of sales from one period to another. • Scope: the results from acquisitions are excluded for the 12 months following the date of a business combination, while results generated by a divested unit are excluded for the 12 months prior to the divestiture • Currency fluctuations: sales at constant currency are calculated by translating current year numbers at prior year average exchange rates (except for currencies with a devaluation of above 50% between the two comparable periods, for which the current year average rate is applied to the prior year baseline) Organic sales are then divided by the prior period sales to derive the organic growth percentage. A numerical reconciliation of this APM is included below: (CHF million) Sales 2023 6 622 Growth in value and in % Organic 494 7.5% Scope –6 –0.1% Acquisitions 23 0.3% Disposals –29 –0.4% Sales 2024 at constant currency 7 110 Currency impact –316 –4.8% Sales 2024 6 794 2.6% Financial statements Corporate governance Remuneration report Management report 146 Non-financial statements Shareholder information SGS | 2024 Integrated Report Adjusted operating income The adjusted operating income is provided to assess the underlying financial and operational performance of the Group by business line excluding the influence of items not directly attributable to operational performance. Adjusted operating income represents the operating income excluding: • Amortization and impairment expenses on intangibles arising as a result of acquisitions • Impairment expenses on goodwill • Restructuring costs including impairment charges arising from the execution of restructuring plans • Gains and losses from business disposals • Acquisition- and divestment-related expenses including transaction and integration costs • Other non-recurring items may include non-operational items such as certain regulatory, compliance and legal costs and certain asset write-downs/impairments (CHF million) 2024 2023 Operating income 904 857 Amortization and impairment of acquired intangibles 30 55 Restructuring costs 82 21 Goodwill impairment – 18 Gain on business disposals – –7 Transaction and integration costs 12 5 Other non-recurring items 12 22 Adjusted operating income 1 040 971 Adjusted operating income margin The adjusted operating income margin is the adjusted operating income as a percentage of sales. (CHF million) 2024 2023 Adjusted operating income 1 040 971 Sales 6 794 6 622 Adjusted operating income margin 15.3% 14.7% Earnings before interest, tax, depreciation and amortization (EBITDA) EBITDA is an important performance measure as it depicts the underlying performance of the Group before tax and excluding non-cash charges of depreciation and amortization. It is a measure commonly used by the investment community. EBITDA is defined as operating income before depreciation, amortization and impairment. It includes restructuring costs. (CHF million) 2024 2023 Operating income 904 857 Depreciation, amortization and impairment 476 545 EBITDA 1 380 1 402 Financial statements Corporate governance Remuneration report Management report 147 Non-financial statements Shareholder information SGS | 2024 Integrated Report Adjusted earnings before interest, tax, depreciation and amortization (adjusted EBITDA) Adjusted EBITDA is the EBITDA adjusted for non-recurring items and those adjustments made for adjusted operating income as defined above. (CHF million) 2024 2023 Operating income 904 857 Depreciation, amortization and impairment 476 545 EBITDA 1 380 1 402 Restructuring costs1 76 18 Gain on business disposals – –7 Transaction and integration costs 12 5 Other non-recurring items2 10 6 Adjusted EBITDA 1 478 1 424 1. Restructuring costs excluding impairment of fixed and intangible assets. 2. Other non-recurring items excluding impairment of fixed and intangible assets. Adjusted profit attributable to shareholders Adjusted profit attributable to equity holders of SGS SA is the profit attributable to equity holders excluding: • Amortization and impairment expenses on intangibles arising as a result of acquisitions • Impairment expenses on goodwill • Restructuring costs, which consist of termination costs as well as impairment charges arising from the implementation of restructuring plans • Gains and losses from sale of businesses • Acquisition- and divestment-related expenses including integration costs • Other non-recurring items may include non-operational items such as certain regulatory, compliance and legal costs and certain asset write-downs/impairments • The tax effect of all the elements mentioned above • The non-controlling interests’ effect of all the elements mentioned above except for the impairment of goodwill (CHF million) 2024 2023 Profit attributable to equity holders of SGS SA 581 553 Amortization and impairment of acquired intangibles 30 55 Restructuring costs 82 21 Goodwill impairment – 18 Gain on business disposals – –7 Transaction and integration costs 12 5 Other non-recurring items 12 22 Tax impact –26 –21 Portion attributable to non-controlling interests –2 –1 Adjusted profit attributable to equity holders of SGS SA 689 645 Adjusted basic earnings per share (adjusted basic EPS) While basic EPS reflects the earnings from operations for each share of SGS SA, adjusted basic EPS is the ‘adjusted profit attributable to equity holders’ (see above) divided by the average number of shares outstanding during the reporting period. (CHF million) 2024 2023 Adjusted profit attributable to equity holders of SGS SA 689 645 Weighted average number of shares (million) 188 184 Adjusted basic earnings per share (CHF) 3.67 3.49 Financial statements Corporate governance Remuneration report Management report 148 Non-financial statements Shareholder information SGS | 2024 Integrated Report Adjusted diluted earnings per share (adjusted diluted EPS) While basic EPS reflects the earnings from operations for each share of SGS SA, adjusted diluted EPS is the ‘adjusted profit attributable to equity holders’ (see above) divided by the diluted weighted average number of shares outstanding during the reporting period. (CHF million) 2024 2023 Adjusted profit attributable to equity holders of SGS SA 689 645 Diluted weighted average number of shares (million) 188 185 Adjusted diluted earnings per share (CHF) 3.66 3.48 Profit attributable to shareholders before restructuring costs Profit attributable to equity holders of SGS SA before restructuring costs is the profit attributable to equity holders excluding: • Restructuring costs, which consist of termination costs as well as impairment charges arising from the implementation of restructuring plans • The tax effect of the elements mentioned above • The non-controlling interests’ effect of the elements mentioned above (CHF million) 2024 2023 Profit attributable to equity holders of SGS SA 581 553 Restructuring costs 82 21 Tax impact –16 –5 Portion attributable to non-controlling interests –1 – Profit attributable to equity holders of SGS SA before restructuring costs 646 569 Basic earnings per share before restructuring costs While basic EPS reflects the earnings from operations for each share of SGS SA, basic EPS before restructuring costs is the ‘profit attributable to equity holders before restructuring costs’ (see above) divided by the average number of shares outstanding during the reporting period. (CHF million) 2024 2023 Profit attributable to equity holders of SGS SA before restructuring costs 646 569 Weighted average number of shares (million) 188 184 Basic earnings per share before restructuring costs (CHF) 3.45 3.09 Diluted earnings per share before restructuring costs While basic EPS reflects the earnings from operations for each share of SGS SA, diluted EPS before restructuring costs is the ‘profit attributable to equity holders before restructuring costs’ (see above) divided by the diluted weighted average number of shares outstanding during the reporting period. (CHF million) 2024 2023 Profit attributable to equity holders of SGS SA before restructuring costs 646 569 Diluted weighted average number of shares (million) 188 185 Diluted earnings per share before restructuring costs (CHF) 3.44 3.08 Financial statements Corporate governance Remuneration report Management report 149 Non-financial statements Shareholder information SGS | 2024 Integrated Report Free cash flow The free cash flow is deemed an important measure by management as it demonstrates the ability to generate cash after the investment in assets necessary to support the existing operating activities. In 2023, management embedded financial interests paid and financial interests received in the free cash flow calculation. It includes the cash effects of restructuring costs, and is calculated as follows based on amounts disclosed in the consolidated cash flow statement. (CHF million) 2024 2023 Cash flow from operating activities 1 224 1 123 Purchase of property, plant and equipment and other intangible assets –251 –298 Disposal of property, plant and equipment and other intangible assets 12 15 Lease payments –176 –178 Interests paid –98 –82 Interests received 37 24 Free cash flow 748 604 Cash conversion Cash conversion ratio provides management with a measurement of the Group’s ability to convert operational results into cash. The ratio is calculated by comparing the free cash flow to the EBITDA (operating income before depreciation, amortization and impairment) minus lease payments. (CHF million) 2024 2023 EBITDA 1 380 1 402 Lease payments –176 –178 EBITDA minus lease payments 1 204 1 224 Free cash flow 748 604 Cash conversion 62% 49% Return on invested capital (ROIC) Return on invested capital is a measure of performance that combines profitability and capital efficiency. Management is closely following this APM in order to evaluate capital allocation. ROIC is defined as net operating income after tax for the year divided by invested capital. Invested capital is the sum of the total equity, the net debt (as defined above), lease liabilities, long-term loan receivable and the net derivative position. The invested capital is adjusted for the timing of cash outflows of acquisitions. The return on invested capital is calculated as follows, and amounts are reconciled to the consolidated statement of financial position as well as the consolidated income statement: (CHF million) 2024 2023 Operating income 904 857 Share of profit of associates and JV 3 2 Group effective tax rate 26% 26% Net operating income after tax for the last 12 months 671 636 Invested capital 2 850 2 827 Total equity 877 528 Net debt 2 670 2 839 Lease liabilities –568 –527 Long-term loan receivables –5 –4 Net derivatives liability (asset) 10 –9 Adjustment for timing of acquisitions –134 – ROIC 24% 22% Financial statements Corporate governance Remuneration report Management report 150 Non-financial statements Shareholder information SGS | 2024 Integrated Report Net debt Net debt represents the net level of financial debt contracted by SGS with external parties. In 2023, management included lease liabilities in the calculation. Amounts can be found in the consolidated statement of financial position and the computation is as follows: (CHF million) 2024 2023 Cash and marketable securities 1 210 1 569 Cash and cash equivalents 1 210 1 569 Loans and other financial liabilities 3 880 4 408 Non-current loans and other financial liabilities 2 700 3 040 Current loans and other financial liabilities 612 841 Non-current lease liabilities 409 384 Current lease liabilities 159 143 Net debt 2 670 2 839 Leverage Leverage is used by management to monitor and measure the Group’s ability to repay its debt from profit earned. Leverage is calculated as net debt divided by adjusted EBITDA. Amounts can be found in the alternative performance measures. (CHF million) 2024 2023 Net debt 2 670 2 839 Adjusted EBITDA 1 478 1 424 Leverage 1.8 2.0 Financial statements Corporate governance Remuneration report Management report 151 Non-financial statements Shareholder information SGS | 2024 Integrated Report Non-financial statements Water Sampling, Turkey 152 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. General information 154 1.1. General basis for preparation of the 154 sustainability statement 1.2. Disclosures in relation to specific circumstances 154 1.3. Governance 155 1.4. Strategy 156 1.5. Impacts, risks and opportunities 158 2. Environmental topics 163 2.1. Climate change 163 2.2. Metrics and targets 169 3. Social topics 172 3.1. Interests and views of stakeholders 172 3.2. Impact, risk and opportunities management 172 3.3. Metrics and targets 176 4. Governance topics 182 4.1. Governance 182 4.2. Impact, risk and opportunities management 182 4.3. Metrics and targets 183 5. Company-specific topics 185 5.1. Customer relationship and satisfaction 185 5.2. Cybersecurity and data privacy 185 5.3. Risk management 187 5.4. Sustainability services 187 6. References 188 6.1. Glossary 188 6.2. GRI 189 6.3. Sustainable Accounting Standards Board (SASB) 195 framework alignment 6.4. Non-financial matters required by Article 964b 196 of the Swiss Code of Obligations 7. Independent practitioner’s 197 limited assurance report 153 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1. General information 1.1. General basis for preparation of the sustainability statement Scope and boundaries Scope The scope of the sustainability information contained in the non-financial statement covers all regions and business lines of the Group for the period 1 January to 31 December 2024. A list of SGS affiliates can be found on pages 144-145 of this report. We have identified and prioritized the most material impacts on our business and across our value chain. This integrated annual report includes performance data for our direct operations and, when relevant and available, information about our upstream and downstream value chain. Consolidation approach We follow the financial control approach, which means we account for 100% of the KPIs from operations over which we have control. We do not account for KPIs from operations in which we own an interest but not a financial control. Reliability of the information We do not include a KPI in our accounting or reporting if we do not have reliable information about it. This omission is noted in the report. As an example, we currently do not account for district heating and refrigerants in our total carbon dioxide (CO2) emissions. Omissions Whenever a piece of information is omitted due to being classified or sensitive information, this is indicated in a footnote. Data collection process Most of our data is collected locally through centralized software, and then reviewed and consolidated in a centralized manner. The remaining data is gathered directly from global functions. Frequency of the data collection varies depending on the type of indicators. In general, the Group has established three reporting periods: second-quarter, third-quarter and full-year. External assurance External assurance of the sustainability performance indicators and the non-financial performance indicators is an important part of our approach, and our sustainability reporting has been independently assured since 2011. Since 2021, PricewaterhouseCoopers SA (PwC) has provided independent limited assurance over certain sustainability metrics, indicated within this report on pages 197- 199. PwC’s assurance report describes the work undertaken and their conclusion for the reporting period to 31 December 2024. Documents relating to independent external assurance in the years prior to 2023 are available on our website. 1.2. Disclosures in relation to specific circumstances Time horizons Unless stated otherwise, the time horizons applied are the following: • Short-term: current reporting year • Medium-term: from the end of the short-term reporting period up to four years (until the end of our Strategy 27) • Long-term: more than five years Value chain estimations Scope 3 emissions have been estimated by applying different emission factors to each Scope 3 category: • Purchased goods and services and capital goods: extended input-output analysis methodology based on spends • Fuel and energy-related activities: average data method, using real consumption data and average emission factors • Waste generated in operations: quantity of waste generated attributed an emission factor per type and management method • Business travel: distance-based method. Number of tickets purchased, and estimation of average distance traveled per train fare and air fare (intercontinental or domestic). Emissions factors are then applied • Employee commuting: distance-based method. Calculations based on a sample survey performed among all employees to determine distance and means of transport. Emission factors are then applied We are constantly working to improve the accuracy of this information. For instance, for the Scope 3 category, ‘Purchased goods and services’, we are working towards gathering supplier specific data. For the ‘Business travel’ category, we are working to centralize travel data through travel agencies directly. Sources of estimation and outcome uncertainty Uncertainties can arise depending on the quality of the data calculated for the value chain (such as GHG emissions) or when projections are based on uncertain assumptions. Our reporting approach is explained further in our Basis of reporting available at sgs.com. Where GRI or SASB standards do not provide a methodology for a sustainability performance indicator, or their methodology is not appropriate, we apply the methodology provided in our Basis of reporting. 154 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Changes in preparation or presentation of sustainability information The Group has started aligning with the requirements of the Corporate Sustainability Reporting Directive (CSRD). As such, this statement has been modified compared to previous years to adapt the content and the structure to the requirements set out in the European Sustainability Reporting Standards (ESRS). In 2024, there were no material changes in the preparation of the information. Reporting errors in prior periods In this statement, we present our historical and current performance over a three-year period. Sometimes historical data may differ from that included in previous reports due to the availability of more accurate data or improved data gathering and/or reporting. Variations lower than 5% are usually considered not material. Significant modifications to data from previous years, however, are noted in the report when they initially appear, with an explanation of the reasons. Disclosures stemming from reporting frameworks We have published sustainability information at SGS for more than 10 years, and since 2015, we have integrated sustainability content into our integrated annual report. Since 2013, our non-financial information has been developed using the guidelines for the AA1000 AccountAbility Principles Standard and the standards of the Global Reporting Initiative (GRI). We also align our reporting with the Sustainability Accounting Standard Board for the Professional & Commercial Services Industry (SASB). Since 2023, the Group also reports against the requirements of Article 964b of the Swiss Code of Obligations. For more information Section 6 References 1.3. Governance The role of the Board of Directors and the Executive Committee The content of this section is addressed in the Corporate Governance report page 39. The Sustainability Committee of the Board and the Executive Committee receive periodic information about SGS sustainability programs and initiatives. New regulations or requirements are analyzed during the regular meetings to assess their potential impact on SGS operations, supply chain and services. Specific analysis sessions are organized on demand depending on the level of complexity of a given topic, and additional training needs are constantly evaluated. In 2024, we launched specific training for Board and Executive Committee members. The course includes general sustainability content linked to the most material topics for SGS, such as integrity, climate change or labor practices. During 2024, the following topics were discussed within the Board of Directors and its committees: • Sustainability roadmap • ESG ratings and reporting • Sustainable supply chain • Diversity and inclusion • Sustainability training and awareness • Sustainability services offering (IMPACT NOW for sustainability) During 2024, the following topics were discussed within the Executive Committee: • Implementation of Strategy 27 • Sustainability services offering (IMPACT NOW for sustainability) • Sustainability KPIs progress • ESG reporting Integration of sustainability-related performance in incentive schemes The content of this section is addressed in the Remuneration report page 63. Risk management and internal controls over sustainability reporting Sustainability data is reported in accordance with the Group reporting deadline and in compliance with the instructions provided in the Group Sustainability Manual. The Minimum Control Standards explains the risks and controls associated with sustainability reporting. See section ‘12. Internal control’, on page 51 of the Corporate Governance report. 155 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1.4. Strategy Strategy, business model and value chain The business model and Strategy 27 are explained in the section ‘How we create value’ of the management report. Sustainability KPIs are embedded in the pillar ‘Strong financial and ESG profile’ of Strategy 27 through four key targets: • Make material progress towards our 2030 target to reduce 28% of our Scope 3 emissions • Have at least one-third of leadership positions held by women • Deliver 7 million hours of training per year to employees, clients and communities • Achieve a customer satisfaction score of 93% Our Sustainability Ambitions 2030 cover our entire value chain and set targets to 2027 and 2030 in three key areas: Environment, Society and Governance. 2027 2030 Environment As part of our roadmap to achieve our SBTi targets, we commit to: • Maintain our decreasing trend towards 46.2% reduction in Scope 1 and 2 emissions • Make material progress towards our 2030 target to reduce 28% of our Scope 3 emissions • Further align with IFRS-S2 disclosure recommendations about climate-related risks and opportunities (previously, TCFD initiative) SGS is committed to reducing absolute Scope 1 and Scope 2 GHG emissions 46.2% by 2030 from a 2019 base year. SGS is also committed to reducing absolute Scope 3 GHG emissions 28% by 2030 from a 2019 base year Social Diversity and Equal Opportunity • At least one-third of leadership positions held by women • Strive towards an equitable representation of genders at CEO-3 Health and Safety • Maintain our Total Recordable Incident Rate (TRIR) and Lost Time Incident Rate (LTIR) below 0.31 and 0.21 respectively • Increase year-on-year the number of HSE certifications for the main operational sites (ISO 45001 and ISO 14001) • Increase the number of behavioral-based safety observations every year by 5% • Reduce our TRIR by 30% and LTIR by 20% and HSE certify the main operational sites (integrated ISO 45001 and ISO 14001 certification) • Achieve 100 000 observations, within the behavioral-based safety observation program Knowledge and Engagement • 7 million hours of training per year to employees, clients and communities • Improve year on year our employee engagement and manager support scores • Continuously improve the capabilities and know-how of our employees and strive to be the employer with the highest level of employee engagement in the industry Human Rights • Ensure and protect human rights respect throughout our operations and supply chain • Ensure and protect human rights respect throughout our operations and supply chain Community Donations • Increase by 50% our positive impact on our communities through employee volunteering • Double our positive impact on our local communities through employee volunteering Governance Brand • Achieve a customer satisfaction score of 93% • Achieve a customer satisfaction score of 95% Integrity • Ensure 100% of employees are trained on our Integrity Principles on an annual basis • 100% of our employees trained on our Integrity Principles on an annual basis Supply Chain • 70% of our goods and services spend under procurement Scope to come from suppliers who have signed our Code of Conduct or committed to standards comparable to SGS’s within their own policy • 50% of SGS strategic suppliers in extra-large, large and medium affiliates, as per our procurement policy, will have completed our sustainability self-assessment questionnaire • 85% of requests for proposals will be online and include the relevant SGS sustainability criteria, enabling comparison and selection of suppliers • Cover at least 90% of our expenditure with suppliers that have agreed with our Code of Conduct Principles and continue developing our human rights due diligence program to avoid violations across our supply chain • 100% of our Requests for Proposal (RfP) will be online and will include the relevant SGS sustainability criteria, enabling comparison and selection of suppliers • Partner with relevant suppliers to transform the products and services we purchase into more sustainable ones, while elevating the sustainability agenda of our strategic suppliers’ operations striving towards their carbon neutrality in 2030 156 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Interests and views of stakeholders Maintaining continuous dialogue with stakeholders is critical to our long-term success. These valuable insights enable us to align our initiatives to stakeholder requirements and are a key input for our annual materiality assessment. Interests and views of the stakeholders are shared with both the Executive Committee and the Board of Directors when necessary for their information and decision making. The table below explains why these groups of stakeholders are important for us, how we engage with them and the key topics we have discussed with them during 2024. Stakeholder group Why we engage How we engage Key topics discussed Upstream Investors and shareholders Investors are vital to our ongoing success and growth. We constantly review market analysis, and aim to be assessed as both a sound investment and a sustainable business. • Annual General Meeting • Capital Markets Event • Meetings with investors and analysts • Answers to analyst questions • Strategy 27 • Company performance • Capital allocation • Execution of action plans • ESG credentials Suppliers Engaging with suppliers is key to ensuring a smooth supply chain, boosting innovation and strengthening sustainability in our business. • Supplier self-assessment program • Sustainability criteria in sourcing events • Supplier Code of Conduct commitment • Sustainability requirements to our suppliers • Supplier plans to reduce CO2 emissions and their impact on our business • Human rights and ethics Operations Employees Our people are essential to our business. Discussing performance and providing training and opportunities helps to develop the potential of our talent and keep employees motivated and engaged. • Global employee engagement program • SGS intranet portal and internal social network • Line manager direct engagement • Leadership town halls • Strategy 27 • Training, development and recognition • Diversity and inclusion • Health, safety and well-being • Sustainability awareness Subcontractors Our subcontractors play a key role in our day-to-day operations. They complement the skills of our employees and provide local knowledge and expertise in different regions, helping SGS meet the varied requirements of different countries and cultures. • Direct communication with business managers and procurement teams • Health and safety – training and development • Quality of service • Sustainability in the supply chain Downstream Customers Customers are at the heart of everything we do. It is important to understand whether we achieve our goals to make their businesses more efficient, profitable and sustainable. • One-to-one meetings • SGS-hosted conferences, seminars and webinars • Customer surveys • Knowledge and educational resources • Customer portal • Online and social media engagement • Quality of services • SGS employees’ attitude, expertise and responsiveness • Quick turnaround times • Sustainability services Communities The sustainability of our communities and the planet is critical to our success. We engage with our communities to continually evaluate whether our sustainability ambitions are fit for purpose and meeting their targeted impact. • Multiple community projects across the network • Community donations and volunteering programs • Human rights and ethical labor practices • Sustainable business practices Consumers Our services ensure that consumers trust the products they buy. Understanding our end consumers tells us whether our services support SGS’s reputation for delivering confidence and assurance. • Certification and product labeling • Direct marketing and communication with certain B2C products • Product safety and quality • Ethical behavior 157 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1.5 Impacts, risks and opportunities Description of the process to identify and assess material impacts, risks and opportunities The process to identify and assess material impacts, risks and opportunities involves numerous stakeholders, both internal and external. The analysis has considered all activities and geographies where the Group operates. During the first stages of the analysis, interviews, surveys and desktop research were conducted among the stakeholders to gain a better understanding of their views and interests. This also included the impacts, risks and opportunities they perceived that SGS is facing today or will face in the medium and long term. This consultation process included employees and employee representatives, sustainability ambassadors of the network, suppliers and key experts of the procurement team, customers and internal marketing managers per business line, shareholders and investors, external sustainability experts, the Executive Committee and the Board of Directors. This process has helped us shape the universe of material topics that should be included in the expert analysis. We considered the list of sustainability topics covered by the ESRS together with the material topics identified in the first stage of the analysis. For each of these material topics, a group of internal experts identified: Impact materiality: • Impacts that the Company may have on the environment or on society. This includes an analysis of: – Nature: positive or negative – Type: actual or potential – Severity: the combination of magnitude and extent of the impact together with the reversibility (only for negative impacts) – Probability: only for potential impacts Financial materiality: • Risks that the Company may face and that could have a negative financial effect on financial position, financial performance and cash flows. Risks identified through the Group’s annual risk assessment and through our climate risk assessment were also incorporated into the analysis and linked to each of the topics previously identified • Opportunities that the Company may capture and that could have a positive financial effect on financial position, financial performance and cash flows The results were presented to the CEO and the Sustainability Committee of the Board of Directors for approval. This statement covers the topics deemed material as per the double materiality assessment and other pieces of information requested by third parties. The result of the analysis of impacts, risks and opportunities is presented in the following double materiality matrix: Financial materiality Impact materiality Low Low 2 5 1 4 3 6 13 12 11 10 7 8 9 High High 1 Climate change 2 Corporate culture 3 Corruption and bribery 4 Customer satisfaction 5 Cybersecurity and data privacy 6 Fair remuneration 7 Gender equality 8 Health and safety 9 Professional integrity 10 Risk management 11 Sustainability services 12 Training and skills development 13 Well-being and working conditions Double materiality matrix 158 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Impacts Impacts are identified in several ways: • Reviewing SGS operations, activities and processes • Engaging with different functions across the organization • Analyzing the market, competitors and megatrends • Conducting stakeholder analysis and engaging with them to identify their concerns, priorities and expectations In 2024, this analysis resulted in the following impacts: Impact description Position in the value chain Material topic Actions taken by the Group Value and trust creation to our clients, stakeholders and society through our services Upstream Operations Downstream • Corporate culture • Customer satisfaction See section 4 and 5.1 Cybersecurity and data privacy measures to protect and prevent data leaks of our clients and business partners Upstream Operations Downstream • Cybersecurity and data privacy See section 5.2 Adequate risk management processes Operations • Risk management See section ‘11. Risk management’ of the Corporate Governance report ESG services portfolio to support our clients in the sustainability transition Downstream • Sustainability services See section ‘Strategy 27’ of the Management report Adequate whistle-blower mechanisms and prevention of corruption and bribery Upstream Operations Downstream • Protection of whistle-blowers • Incidents of corruption See section 4 Adequate and fair remuneration Operations • Adequate wages • Gender equality and equal pay for work of equal value See section 3 Inclusive and diverse workforce Operations • Diversity See section 3 Health and safety measures to protect people working at our sites and consumers and end-users Operations • Health and safety See section 3 Protection against violence and harassment in the workplace Operations • Measures against violence and harassment in the workplace See section 3 Good working conditions to guarantee employee well-being, satisfaction and work-life balance Operations • Secure employment • Work-life balance See section 3 Talent development programs to upskill our workforce and guarantee an adequate service quality Operations Downstream • Training and skills development • Customer satisfaction See section 3 and 5.1 Policies to manage climate change mitigation and adaptation and measures to achieve our decarbonization targets Upstream Operations Downstream • Policies related to climate change mitigation and adaptation • Carbon emissions See section 2 Long‑term and sustainable relationship with our suppliers Upstream Operations • Management of relationships with suppliers • Sustainable supply chain See section 4 Resilience of the business model and strategy to material impacts We are constantly adapting our business model and operations in order to mitigate our negative impacts on the environment, our employees and the rest of our stakeholders. Regarding our negative environmental impacts, we are working towards meeting our science-based targets, as outlined in our Net-Zero Transition Plan. We have identified several decarbonization levers and are exploring ways to minimize our impact through energy efficiency projects, transition to a greener fleet and other methods (see section 2). On the other hand, regarding our impacts on our employees, we have a clear strategy to ensure employee well-being and satisfaction (see section 3). 159 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Risks Risk assessment and risk identification within the double materiality assessment are currently performed separately, but the results of these two processes have a very high level of alignment. Most risks identified in the risk assessment were included in the double materiality analysis, except for those of a purely financial nature. We are working towards a full integration of both processes in the coming years. Risk category Risk title Material topic Summary of potential consequences Mitigation measures taken by the Group External Economy and Sovereign Loss of revenue due to decrease in service demand/economy • Customer satisfaction • Target organic growth not fully achieved • The new IMPACT NOW for sustainability offering was launched to capitalize on the expanding sustainability megatrend • Continued development of our Digital Trust services, targeting growing sectors and industries • Ongoing strengthening presence in North America and Europe through both organic growth and acquisitions Lack of capital availability to grow the business • Corporate culture • Target organic growth not fully achieved • Stagnation or decline in market share in certain strategic business units • Stricter financial discipline enforced on CAPEX, working capital, and M&A management • New Free Cash Flow KPI introduced as part of the management incentive plan • Successful implementation of a scrip dividend, with the dividend policy to be aligned with earnings levels moving forward Price pressure • Corporate culture • Target profitability increase not fully achieved • The Renew restructuring program has been fully implemented to align SGS’s capacity and cost structure with market demand • Procurement savings initiatives have been accelerated to offset rising costs and enhance profitability Customer Needs Loss of revenue due to insufficient adaptation to changes in customer demand • Sustainability services • Customer satisfaction • Loss of customers resulting from an inability to meet demand due to insufficient capacity or inadequate sales forecast planning • Market share stagnation or decrease in some strategic business units • Management structure realigned to focus on local customers for locally managed operations and global key account management for globally driven businesses, enhancing customer proximity and improving sales forecast accuracy and proactivity • Preserve or develop a global footprint for strategic activities, enabling laboratory backup and cross-country collaboration • Expansion of Global Business Services to enhance operational excellence and reduce TAT KPIs Hostile Civil or Political Environment Risks Business disruption, harm to personnel or property from any form of civil strife • Health and safety • Increase in crime, particularly criminal damage and looting • The personal security of employees at risk, and disruption to transport infrastructure adversely affecting business operations • In extreme cases, SGS facilities may be forced to cease operations or even close down • Increased country Managing Director’s awareness of this risk, especially via the efforts of business continuity initiatives, in order to improve preparedness and responsiveness • Work from home initiatives improving resilience for those activities that do not demand presence on site • Better physical and procedural security controls to protect premises Cyberattack Cyberattacks • Cybersecurity and data privacy • Compromise on critical data, disruption of operations, and erosion of customer trust and SGS reputation • Continuous strengthening of cybersecurity defenses, including firewalls, identity & access management, and intrusion detection systems. Maintaining the current 24/7 monitoring levels of the Security Operations Center and Digital Forensic & Incident Response services 160 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Risk category Risk title Material topic Summary of potential consequences Mitigation measures taken by the Group Business ethics Bribery and Corruption Bribery and corruption • Corporate culture • Incidents of corruption • Fines, loss of business and reputational damage • Robust compliance framework, featuring comprehensive policies and processes on Third-Party Due Diligence, Anti-Corruption and Conflicts of Interest • Prevention: fostering a culture of integrity based on our Code of Integrity, reinforced through systematic and recurring training for all employees • Detection: Compliance Committee dedicated to ensuring ethical conduct and strict adherence to the Code of Integrity across all company operations and activities Information Technology Access Ineffective access controls resulting in security breach and business disruption • Cybersecurity and data privacy • Unauthorized access to sensitive information and disturbance of operational activities • Robust access management solutions to prevent lateral movements and privilege escalation • Regular audits of access permissions and enforcement of least-privilege principles Human Capital Talent Management Lack of succession planning of key personnel • Training and skills development • Negative effect on business continuity and operational excellence • Key positions potentially remaining vacant for extended periods, causing unprepared successors, inefficiencies and potential loss of competitive advantage • Succession planning program and talent review process ensure a strong pipeline for critical roles by integrating these practices into daily leadership activities, fostering proactive talent management and organizational resilience. These efforts are supported by mySGS to streamline and enhance the effectiveness of this process Inefficient performance management • Training and skills development • Misaligned employee behaviors and eroded engagement due to unclear or unrealistic goals • Employee disengagement, resulting in lower productivity and unfulfilled KPIs, which can negatively impact organizational performance • Driving high performance through proactive goal-setting, regular feedback, and alignment of individual and organizational goals. Accountability and process efficiency supported by implemented technologies Lack of qualified and competent employees • Training and skills development • Customer satisfaction • Reduced customer satisfaction and reputational damage due to an insufficient pool of qualified employees • Missed business opportunities, decreased productivity, and weakened organizational competitiveness resulting from a lack of qualified talent • SGS Campus is an established SGS online learning platform, and it is integrated with MySGS to lay the foundation for progress tracking and targeted development outcomes • Strengthened leadership through access to courses from leading business schools, coupled with the planned launch of a new Leadership Program in 2025 aligned with Strategy 27 • The ‘Career Conversation’ framework facilitating the alignment of employee aspirations with organizational goals through actionable plans, supported by tools for follow-up and tracking Resilience of the business model and strategy to material risks Risk identification and assessment are a key input into the strategy and business model. Risks are evaluated annually following the risk assessment process, and mitigating actions at both global and local level are identified for the top risks. The implementation of these mitigating actions is monitored regularly and, when necessary, the strategy is reviewed and adapted. 161 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Opportunities Opportunities are identified through the strategic reflection process performed annually. One of the key drivers is the analysis of the megatrends that shape the markets in which we operate. We have identified four megatrends: • Powerful sustainability transition: our clients must comply with several new regulations, but beyond the law, they are also pushed to adopt even more sustainable practices by their own customers and stakeholders • Innovation in digital capabilities and new technologies: the continuous growth of digital technology, which creates a strong demand for the tech industry in data integrity and in digital trust • Nearshoring of supply chains • Increasing regulation and public awareness The analysis of these megatrends together with the Group’s strategic priorities has resulted in the following opportunities: Opportunity Position in the value chain Material topic Actions taken by the Group Increasing demand for sustainability services Downstream • Sustainability services See section ‘Strategy 27’ of the Management report In 2024, we launched IMPACT NOW for sustainability a new strategy that consolidates SGS’s sustainability solutions under four pillars: climate, circularity, nature and ESG assurance. Increasing demand for data integrity and digital trust services Downstream • Cybersecurity and data privacy See section ‘Strategy 27’ of the Management report We are strengthening our leadership in cybersecurity and AI trust with new acquisitions that enable us to lead in the cybersecurity market. Customer satisfaction and quality of service Operations Downstream • Customer satisfaction See section 5.1 Highly qualified professionals to deliver high- quality services Operations Downstream • Training and skills development See section 3 Increasing concern about sustainability risks in the value chain Upstream • Management of relationships with suppliers • Sustainable supply chain See section 4 Building trust across our clients and business partners Operations • Corporate culture See section 4 Resilience of the business model and strategy to take advantage of material opportunities: Our Strategy 27 was specifically designed to capture the opportunities derived from megatrends, change in customer behavior and regulation. Our pillars ‘Sustainability transition’ and ‘Digital acceleration’ are linked to the most material topics for the Company, ‘Sustainability services’ and ‘Cybersecurity and data privacy’. Our global reach and diversified operations constitute a competitive advantage and positions SGS as a key and reliable partner for our customers. 162 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 1,000 1,500 ktCO2e 500 Total CO2 emissions over time BAU Scope 3 Scopes 1 and 2 2014 2019 2030 2050 2. Environmental topics 2.1. Climate change Governance Climate governance and integration of climate-related performance in incentive schemes is explained in the Remuneration report, page 63. Strategy In 2022, we received approval for a Net-Zero target. Aligned with the 1.5ºC objective from the Paris Agreement, we have committed to reach Net-Zero GHG emissions across our entire value chain by 2050. To achieve this objective, we have approved near- and long-term science-based emissions reduction targets with the SBTi: Near-term targets: • We commit to reduce absolute Scope 1 and Scope 2 GHG emissions by 46.2% by 2030 from a 2019 base year • We also commit to reduce absolute Scope 3 GHG emissions by 28% by 2030 from a 2019 base year Long-term targets: • We commit to reduce absolute Scope 1, 2 and 3 GHG emissions by 90% by 2050 from a 2019 base year Our direct emissions reduction will be prioritized, and all residual emissions will be neutralized in line with SBTi criteria before reaching Net-Zero emissions by 2050. These targets were determined following the absolute contraction approach, as there is no sectoral pathway that applies to the TIC industry. Given the Covid pandemic, we consider 2019 to be the most representative year in terms of business activity, and this was set as the baseline for our targets. In 2024, we presented our Net-Zero Transition Plan, which outlines a roadmap to reduce our emissions through various decarbonization levers and initiatives that cover our entire value chain. We will reach our 2030 targets by implementing various decarbonization levers and initiatives, while also expanding our efforts to fulfil our commitment to achieving Net-Zero emissions by 2050. The transition plan has been presented to the Executive Committee and approved by the CEO. 2019-2030 2030-2050 2014-2019 Delivering on our pledge to achieve Net-Zero by 2050 Focusing on our operations Leading the green transition Our transition levers are: 1. Vehicle fleet 2. Buildings 3. Renewable electricity 4. Supply chain 5. Business travel 6. Other emissions 2014 185,313 (tCO2e) 2019 130,201 (tCO2e) 30% absolute reduction in Scopes 1 and 2 41% reduction in intensity Achievements • A list in CDP • Over 90% renewable electricity Achievements • Launch of our global sustainability strategy, SA30 • Sustainability KPIs included in top management remuneration • First TIC company with targets officially approved by the SBTi • First integrated, financial and non-financial, report • Joined the UNGC 90% absolute reduction for Scopes 1, 2 and 3 46.2% absolute reduction for Scopes 1 and 2 28% absolute reduction for Scope 3 Expanding our effort through our decarbonization levers to fulfill our long-term commitment. 163 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Our decarbonization levers and their contribution towards emissions reduction are presented below: Lever Description Key actions planned Vehicle fleet Around 70% of our operational emissions are linked to our vehicle fleet. This mainly comprises passenger cars, light commercial vehicles and pick-ups used for the purpose of transporting samples and personnel to inspection sites. This category represents our major source of locked-in emissions. However, most vehicles are leased with leasing conditions under three years. When possible, we are trying to transition to low carbon technologies in our contracts with leasing companies. • Greener fleet • Reduced emissions • Sustainable mobility • Streamlined routes Buildings Around 30% of our operational emissions are associated with our portfolio of buildings, which includes mainly leased offices and laboratory spaces. While managing actions in rented buildings poses challenges in terms of control and implementation, it is crucial to adopt practices that enhance the efficiency of our operations. This category also represents our second major source of locked-in emissions. Through our Energy Efficiency in Buildings (EEB) program we identify the most energy and GHG emissions intensive buildings and implement specific actions to reduce their impact on climate. • Optimized office space • Energy efficiency • Energy source diversification • Awareness Renewable electricity We are investing in on-site electricity generation, mainly through solar photovoltaic installations, along with green tariffs offered by suppliers. However, there are limitations to the scalability of these approaches, and, consequently, we are also directing investments towards energy attribute certificates (EACs). • On-site generation • Green tariffs • EACs • PPAs Supply chain Within Scope 3, categories 3.1 and 3.2 encompass emissions resulting from purchased goods and services and capital goods, respectively. This source of emissions primarily originates from our supply chain, comprising the largest share of our carbon footprint, nearly 70% of the total. • Comprehensive data • Engagement with suppliers Business travel Within Scope 3, category 3.6 encompasses emissions resulting from long-distance business trips via flights or trains, excluding short-distance trips using taxis or short- term rentals. Business travel emissions play a crucial role in our sustainability strategy. • Green travel policy • Integration into mobility strategy • Technology adoption Other emissions Within Scope 3, in addition to the emissions associated with the aforementioned supply chain and business travel, it is crucial to consider other categories. • Mobility strategy • Reduction and recuperation initiatives As part of our Strategy 27, we have set ambitious targets based on our unique ability to respond to the megatrends driving growth in the TIC industry. One of these is the ‘powerful sustainability transition’, which encompasses higher demand from environmental, social and governance (ESG) regulation and societal expectations. Our transition plan is fully embedded in our strategy and key climate-related indicators are included in Strategy 27. Progress in the implementation of the transition plan in 2024 We have communicated our global commitment to each region and affiliate. In this context, the global target related to our operations has been cascaded down to regions and affiliates by using a multi- criteria methodology that considers their weight, intensity and trend. Affiliates are implementing their local action plans, focused on their major contribution, whether this is building or vehicles, aiming to achieve their designated targets. By lever, we have made the following progress: Vehicle fleet Through the adoption of local targets and development of emissions reduction plans, affiliates are diligently identifying and implementing initiatives in electrification and other areas related to vehicles. These efforts include the adoption of more sustainable fuels, smart fleet management and provision of efficient driving training. In addition, our vehicle emissions policy allows the transition away from traditional combustion engines to more environmentally sustainable alternatives. Buildings The 930 buildings currently in our EEB program account for 90% of our electricity and 89% of our non-transport fuel consumption. Similar to the approach taken with regard to vehicles, through the adoption of local targets and development of emissions reduction plans, affiliates are establishing predetermined actions concerning buildings to address consumption and subsequently reduce emissions. Local teams consistently receive data visualization and additional supportive tools to enhance the effectiveness of their initiatives. In the implementation of energy efficiency and awareness measures, laboratories are one of our major focus areas. For example, our laboratory in Ringaskiddy, Cork, Ireland, has achieved platinum certification from My Green Lab, highlighting our commitment to delivering advanced analytical services while minimizing environmental impact. Renewable electricity We have increased our on-site renewable electricity production by 182% in 2024 and the local procurement of green tariffs. In addition, we buy EACs up to 97% of our electricity consumption. Supply chain and other emissions We are working to improve the accuracy of the supply chain data and launched engagement initiatives with suppliers. Regarding the rest of Scope 3 categories, we are working on specific action plans to address each of them individually. 164 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Management of impacts, risks and opportunities Identification and assessment of material climate-related impacts, risks and opportunities Climatic risks and opportunities are identified through various channels: • Climatic scenario analysis: through climatic analysis models, market trends, upcoming regulations and megatrends • Our operations: they are up to date with market changes that can result in risks and/or opportunities • Business continuity team: analyzes, anticipates and prepares the organization for potential business disruption, which includes extreme weather events Identified climatic risks include upstream and downstream activities across the supply chains for all our stakeholders, which are input into our risk intelligence tool for evaluation. In addition to identifying and evaluating potential risks, our operations and functions at local, regional and global levels are required to explain the associated mitigation programs, in order to define the residual risks. These residual risks are then evaluated against SGS risk appetite and risk tolerance level. The heads of each of our business lines consider climatic risks when defining the strategy of the business line and in their financial planning. In most cases, where a portion of the business could be disrupted due to market or regulatory changes, this includes diversifying into other services or geographies, and investing where new opportunities are likely to appear or where there may be an increase in demand for an existing service. These risks and opportunities are prioritized depending on this assessment. Roadmap to 2030 Reduction of emissions among decarbonization levers 916 573 tonnes CO2e 129 091 tonnes CO2e 2019 absolute emissions 2019-30 activity-related growth 636 235 tonnes CO2e 2030 emissions target Vehicle fleet Buildings Renewable electricity Business travel Supply chain Other emissions 19 484 tonnes CO2e 90 954 tonnes CO2e 59 957 tonnes CO2e 3 421 tonnes CO2e 24 475 tonnes CO2e 211 138 tonnes CO2e Our commitment to reducing emissions also covers our expected growth, estimated based on 2014-2019 trend. 165 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Main risks and opportunities related to climate change: Risk category & risk Impact description Mitigation Time horizon and geography Regulatory Increased compliance costs Higher operational costs to comply with climate-related legislation (e.g. EU Taxonomy, adoption of climate reporting requirements, etc.). We take a proactive approach and adopt best-in- class practices towards climate change mitigation and adaptation. Short term Global Failing to adapt to new low carbon technologies Not adopting low carbon technologies (such as low carbon vehicles, energy efficiency measures for our buildings or renewable energy generation) would reduce our competitiveness and affect our reputation. Our climate change mitigation strategy ensures that we continuously innovate. For example, through our Energy Efficiency in Buildings (EEB) program, or our vehicle emissions policy. Medium term Global Technology Shifts in service demand Market changes due to climate change can have a significant impact on client demand for SGS services, either directly or indirectly. We are diversifying our market segment to increase revenues from markets that will be developing because of climate change. Key to this are our sustainability services, a wide range of services that help organizations to implement better and more efficient processes, address stakeholder concerns, address risks and accomplish their sustainability goals. The impact of this mitigation measure is displayed as an opportunity below, under ‘Main climate-related opportunities.’ Medium term Global Market Climate reputation Failing to address appropriately our impact on climate change, or to comply with climate regulations, would impact the value of our brand and imply the loss of clients. Our sustainability team ensures that our approach to addressing climate change is best-in-class and credible. Our sustainability and legal teams ensure that we stay up to date with legislation and comply with all regulations. Long term Global Reputation Extreme weather Extreme weather conditions, such as cyclones, hurricanes or floods, can affect our business performance and continuity, by forcing us to close sites, disrupting our logistics, etc. We have business continuity guidelines and a global emergency management standard which our affiliates must implement at local level. This ensures that 100% of our revenues, as well as any new operations, are protected against extreme weather conditions. Business continuity programs across SGS define roles and responsibilities in case of crisis and provide guidelines and Group procedures to organize a coordinated response in case of emergencies. Short, medium and long term Global Acute physical Increase in mean temperatures Higher mean temperatures result in higher energy consumption and usage of refrigerant gases, which translate into CO2 emissions. Through our EEB program, we implement measures to optimize energy consumption in our facilities. Our energy efficiency in buildings program covers our entire operations, ensuring that 100% of our revenues, as well as any new operations, are protected against the increase in mean temperatures. We are also working on reducing the fugitive emissions of refrigerant gases. Short, medium and long term Global Chronic physical Rising sea levels Our coastal facilities could be impacted, requiring relocation. Given that rising sea levels are a slow phenomenon, we continually assess when it will be necessary to move affected facilities. Long term Global Opportunity category & opportunity Impact description Strategy to maximize the opportunity Time horizon and geography Technology New and more affordable low carbon technologies Increased demand for low carbon technologies is resulting in new technologies appearing, being developed faster and being made more affordable, in most cases. Adopting these technologies will help us implement our climate change mitigation strategy, also reducing costs associated with energy and carbon. Medium term Global Cost savings associated with climate strategy implementation Reducing the energy that we consume in our buildings, as well as the amount of employee travel, will reduce not only our carbon emissions but also the associated costs (such as the cost of energy). Reducing our carbon emissions and energy consumption through our climate change mitigation strategy (including, amongst others, our EEB program and our vehicle emissions policy). Short, medium and long term Global Market Shifts in service demand Market changes due to climate change can have a significant impact on client demand for SGS services, either directly or indirectly. We capture climate opportunities by engaging in mandatory and voluntary carbon markets, ensuring compliance with regulations like the Carbon Border Adjustment Mechanism (CBAM). We deliver actionable, results-driven solutions that empower clients to measure, reduce, verify and report greenhouse gas emissions across their organizations, products and projects, while providing expertise through their energy transition journeys. Short, medium and long term Global 166 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Scenario analysis As part of our climatic risk and opportunity management process, we conduct scenario analysis to improve our strategic resilience and explore climate vulnerabilities that might impact our business. Scenarios applied: Scenario Temperature rise Transition risks Physical risks Rationale RCP 2.6/IEA STEPS 1 1.5-2°C All climate commitments made by governments for 2030 targets and longer-term Net-Zero and other pledges will be met. RCP 4.5/IEA APS 2 2-3°C More conservative benchmark for the future, because it does not take for granted that governments will reach all announced goals. RCP 8.5 3 >4°C Only current climate policies are implemented. Paris Agreement targets are not met. It is an extrapolation of what could happen if no additional measures were taken. 1. International Energy Agency Stated Policies Scenario. 2. International Energy Agency Announced Pledges Scenario. 3. Representative Concentration Pathway. Transition risks As transition risks and opportunities are those expected to have the largest impact on Group operations, we have quantified the estimated financial impact of: • Cost savings associated with climate strategy implementation (opportunity) • Shifts in service demand (risk and opportunity) The estimated values presented in the table below represent the total discounted value of future revenues and costs driven by transition risks and opportunities, for the period from 2023 to 2050, using a weighted average discount rate of 7.4%. The calculated financial impact on SGS is denominated in Swiss Francs (CHF). Where financial projections were denominated in another currency, these have been converted to CHF by using forward exchange rates from Oxford Economics. Where projections were made in real terms, inflation expectations for Switzerland were considered, taken from Oxford Economics. IEA STEPS 2050 1 IEA APS 2050 2 Gross financial impact (CHF million) Net financial impact (CHF million) Gross financial impact (CHF million) Net financial impact (CHF million) Strategy to mitigate risk and maximize opportunity Risk category & risk Market Shifts in service demand -6 -6 -140 -140 We are diversifying our market segment to increase revenues from markets that will be developing because of climate change. Key to this is our IMPACT NOW for Sustainability offering that helps organizations to implement better and more efficient processes, address stakeholder concerns, address risks and accomplish their sustainability goals. Opportunity category & opportunity Technology Cost savings associated to climate strategy implementation 0 525 0 510 We are reducing our carbon emissions and energy consumption through our climate change mitigation strategy (including, amongst others, our Energy Efficiency in Buildings program and our vehicle emissions policy). Market Shifts in service demand 419 577 656 944 Through our IMPACT NOW for Sustainability service portfolio, we are capturing climate opportunities by engaging in mandatory and voluntary carbon markets, ensuring compliance with regulations like the Carbon Border Adjustment Mechanism (CBAM). We deliver actionable, results-driven solutions that empower clients to measure, reduce, verify and report greenhouse gas (GHG) emissions across their organizations, products and projects, while providing expertise through their energy transition journeys. 1. International Energy Agency Stated Policies Scenario. 2. International Energy Agency Announced Pledges Scenario. 167 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Physical risks In 2023, we performed a physical risk assessment considering our top 80 key owned buildings, including offices, laboratories and warehouses scattered around the world. The results of this assessment will help us identify key assets highly exposed and vulnerable to physical risks, as well as their respective hazard(s) of concern. The analysis was limited to the property value itself, and therefore, no capital equipment (within the building) was considered. We have assessed the exposure and vulnerability assessment of direct physical risks (direct damage caused to the assets), and therefore, indirect physical risks were not considered (e.g. the loss of worker productivity due to high temperatures). The climate risk assessment was conducted by analyzing: a) Hazards: probability of occurrence of a hazardous event at a given intensity b) Exposure: number of assets present in a given location potentially affected by the selected hazard, and c) Vulnerability: expected value loss of the asset, should an event of a specific intensity occur Overview of the results based on the scenario with most severe physical impacts (RCP 8.5): • Europe is the region with the highest exposure, primarily driven by floods (fluvial, pluvial and tidal), as well as wind and high temperatures, to a lower extent. Finland, Belgium and the Netherlands will be the countries most impacted • North America is the region with the second highest exposure, mainly driven by pluvial and fluvial flooding • Latin America is the region with the third highest exposure, driven by floods (fluvial and pluvial) in Brazil and Colombia • Asia Pacific is the region with the fourth highest exposure, driven by floods (all types), as well as wind and high temperatures • Africa Middle East is the region least exposed to hazards, which will be driven by fire and high temperatures Resilience strategy To enhance our resilience, SGS’s framework aims to minimize climatic risks and maximize climatic opportunities. To minimize risks, for each identified risk in which the gross risk level is unacceptable (i.e. the risk can have a significant impact on business revenues, profit margin, business continuity, reputation or operations), mitigation programs are defined in order to manage them and bring the residual risk level to an acceptable level. In addition, our global business continuity strategy aims to enable us to respond to any disruption efficiently and effectively, while minimizing the impact on our operations in terms of our sites, processes and service delivery. Finally, each business line takes into consideration identified risks and the results of our scenario analysis to define our business strategies and ensure that we anticipate any market or regulatory changes and that we also exploit any new opportunities. Our resilience strategy also includes the programs that we have in place to reduce our CO2 emissions and our dependency on energy. Some examples are our Energy Efficiency in Buildings program and our vehicle emissions policy. Policies related to climate change mitigation and adaptation In 2024, we approved our climate change policy. This policy outlines our commitment and targets related to climate change mitigation and adaptation. It applies to SGS Group and all its affiliates and it’s available at sgs.com. Actions and resources in relation to climate change policies We have made large green investments in line with our mission to create a Net-Zero future. Achieving a balanced and effective use of capital and operating expenditure is our main goal in the decarbonization process. By carrying out their plans for reducing emissions, affiliates are assiduously investing considerable effort and complementing local expenditures in order to satisfy their allocated responsibilities and help achieve global goals. At a global level, our financial commitment associated with decarbonizing our operations is principally motivated by a focus on operational excellence and the adoption of renewable electricity. In this context, under the umbrella of our EEB program, in 2024, we dedicated a Global CAPEX of CHF 3 million to facilitate the implementation of projects designed to expedite the reduction of our energy consumption and electrification. These investments are strategically designed to impact all our operations and geographical areas, incorporating established technologies with proven returns on investment. We also regularly allocate annual sums to make sure that the electricity we use comes from renewable sources. This pledge does not change, especially in light of the projected rise in electricity usage brought on by the electrification of cars and buildings. To decarbonize our supply chain, we are investing primarily in getting reliable and insightful data from our suppliers. We also take great care to ensure that our investment plans match our long-term goal of Net-Zero emissions. This all-encompassing strategy guarantees that every financial commitment we make has a substantial contribution to both the global imperative to combat climate change and our wider sustainability goals. 168 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2.2 Metrics and targets Energy consumption and mix 2024 20231 2022 Total energy consumption (MWh) 941 484 941 852 947 571 Total energy consumption by use (MWh) Vehicle fuels energy 290 581 305 208 310 792 Non-transport fuels energy 153 584 141 353 149 182 Total electricity 497 319 495 290 487 597 Standard electricity2 14 234 12 109 15 541 Renewable electricity3 483 085 483 181 472 056 Total fuel consumption by source (MWh) Coal and coal products – – – Crude oil and petroleum products 42 858 46 715 52 483 Natural gas 110 725 94 638 96 698 Others 1 – – Total energy production (MWh) Non-renewable energy production – – – Renewable energy production 11 241 3 981 2 312 Total renewable electricity (% of total electricity consumption) 97 98 97 Energy intensity per sales4 (MWh/CHF million) 138.6 142.2 154.6 Energy intensity per average FTE5 (MWh/FTE) 9.5 9.6 9.8 Electricity intensity per sales4 (MWh/CHF million) 73.2 74.8 79.6 Electricity intensity per average FTE5 (MWh/FTE) 5.0 5.0 5.0 1. Total energy consumption for 2023 was updated based on improved data accuracy, with a net change of 7,065 MWh: a 6,342 MWh decrease in vehicle fuels, a 658 MWh increase in non- transport fuels, and a 616 MWh decrease in total electricity (685 MWh less in standard electricity and 69 MWh more in renewable electricity). As a result of these changes, percentage renewable electricity has increased by 0.6 percentage points, energy intensity per sales has decreased by 0.8 MWh/CHF million and electricity intensity per sales has decreased by 0.1 MWh/CHF million. 2. Electricity bought from a non renewable tariff linked to Energy Attribute Certificates. 3. Electricity bought from local zero emissions sources of production and through Energy Attribute Certificates. 4. Being the denominator the sales on a constant currency basis. Energy consumption within the organization. 5. Being the denominator the average FTEs (see table ‘Average number of employees by geographical area’ on p. 98). Energy consumption within the organization. 169 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Gross Scopes 1, 2, 3 and Total GHG emissions Retrospective Milestones and target years Base year Comparative N %N/N-1 2019 20231 2024 2030 2050 Scope 1 GHG emissions2 Gross Scope 1 GHG emissions (tCO2eq) 113 443 103 387 101 320 –2% 61 033 11 344 Percentage of Scope 1 GHG emissions from regulated emission trading schemes (%) 0% 0% 0% 0% 0% Scope 2 GHG emissions3 – – Gross location-based Scope 2 GHG emissions (tCO2eq) 215 752 224 813 219 073 –3% 116 075 21 575 Gross market-based Scope 2 GHG emissions (tCO2eq)4 16 758 7 128 8 117 14% 9 016 1 676 Significant scope 3 GHG emissions – – Total gross indirect (Scope 3) GHG emissions (tCO2eq) 786 370 812 049 794 581 –2% 423 067 78 637 1 Purchased goods and services 441 064 498 086 486 821 –2% 237 292 44 106 2 Capital goods 137 633 127 168 116 856 –8% 74 047 13 763 3 Fuel and energy related activities (not included in Scope 1 and Scope 2) 76 354 72 932 69 430 –5% 41 078 7 635 4 Upstream transportation and distribution – – – – – 5 Waste generated in operations 10 531 19 045 20 715 9% 5 666 1 053 6 Business travel 29 647 23 003 21 876 –5% 15 950 2 965 7 Employee commuting 91 142 71 815 78 884 10% 49 034 9 114 8 Upstream leased assets – – – – – 9 Downstream transportation and distribution – – – – – 10 Processing of sold products – – – – – 11 Use of sold products – – – – – 12 End-of-life treatment of sold products – – – – – 13 Downstream leased assets – – – – – 14 Franchises – – – – – 15 Investments – – – – – Total GHG emissions Total GHG emissions (location-based) (tCO2eq) 1 115 566 1 140 249 1 114 974 –2% 600 174 111 557 Total GHG emissions (market-based) (tCO2eq) 916 572 922 563 904 018 –2% 493 115 91 657 Emissions intensity Scope 1+2 intensity per sales market-based2,3,4,5 (tCO2eq/CHF million) 21.7 16.7 16.1 –3% Scope 1+2 intensity per average FTE market-based2,3,4,6 (tCO2eq/FTE) 1.4 1.1 1.1 –2% Scope 3 intensity per sales7 (tCO2eq/CHF million) 131.3 122.6 117.0 –5% 1. Emissions in 2023 were updated based on corrected energy consumption figures, leading to a decrease of 1,374 tCO2eq in Scope 1 emissions, 223 tCO2eq in location-based Scope 2 emissions and 141 tCO2eq in market-based Scope 2 emissions. As a result, Total GHG emissions (location-based) have decreased by 1,596 tCO2eq, Total GHG emissions (market-based) have decreased by 1,515 tCO2eq and Scope 1+2 intensity per sales (market-based) has decreased by 0.2 tCO2e /CHF million. See Table ‘Energy consumption and mix’. 2. Refrigerant gas emissions are not included in this figure. 3. District heating emissions are not included in this figure. 4. 97% of total electricity consumption is sourced from renewable energy: 69% I-RECs, 16.5% guarantees of origin, 13% RECs, 1% REGOs, and 0.5% other country-specific certificates. 5. Being the numerator the total scope 1 + 2 market-based GHG emissions and the denominator the sales on a constant currency basis. 6. Being the numerator the total scope 1 + 2 market-based GHG emissions and the denominator the average FTEs (see table ‘Average number of employees by geographical area’ on p. 98). 7. Being the numerator the total scope 3 GHG emissions and the denominator the sales on a constant currency basis. We no longer finance GHG mitigation (avoidance and removal) projects through carbon credits and we have yet not implemented carbon-pricing mechanisms. Regarding the Scope 3 categories reported as zero in the table above: • Category 4 ‘Upstream transportation and distribution’ emissions are included in the emission factors used in Scope 3.1 and 3.2 • Categories 9 to 13 do not apply as SGS does not sell manufactured products • Category 14 ‘Franchises’ does not apply as SGS does not use franchises to operate • Category 15 ‘Investments’ does not apply as SGS does not provide financial services 170 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Other environmental indicators Water and waste management While our water consumption and waste impact is relatively small compared to other industries, we monitor our impact and reduce our resources’ footprint. 2024 2023 2022 Water purchased (m3) 2 070 130 2 051 434 1 985 965 Water use/average FTE1 (m3/FTE) 20.9 20.8 20.5 Weight of waste generated (metric tons) 85 139 70 348 78 560 Weight of hazardous waste generated (metric tons) 24 251 15 020 16 217 SGS offices and labs 18 001 8 598 10 829 Client samples 6 250 6 422 5 388 Weight of non-hazardous waste generated (metric tons) 60 888 55 328 62 343 SGS offices and labs 32 998 29 448 36 558 Client samples 27 890 25 880 25 785 Weight of waste recovered (metric tons) 24 655 22 616 24 783 Weight of hazardous waste recovered (metric tons) 5 151 5 643 5 107 SGS offices and labs 2 501 2 792 2 343 Client samples 2 649 2 851 2 764 Weight of non-hazardous waste recovered (metric tons) 19 505 16 973 19 676 SGS offices and labs 8 479 8 018 8 943 Client samples 11 026 8 955 10 733 Environmental incidents (# of environmental incidents including significant spills) 35 29 26 1. See table “Average number of employees by geographical area” on p. 98. 171 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3. Social topics 3.1. Interests and views of stakeholders The interests and views of stakeholders can have a significant impact on our strategy and business model. We have several channels of communication with our employees (see section 1.4) and we constantly encourage them to provide their opinions and ideas. 3.2. Impact, risk and opportunities management Policies related to own workforce Our Group policies cover all of our affiliates and state our commitments and the minimum requirements that all affiliates must comply with. At the local level, affiliates develop their own policies based on local regulation and needs. In all cases, local law, regulations, any applicable work agreement and any more stringent local/regional SGS policies prevail over the provisions of Group policies. One of the most relevant Group policies is the human rights policy. Our commitment to respecting human rights is grounded in our SGS Code of Integrity and our SGS business principles, and reflected in our human rights policy, supplier code of conduct and other relevant policies. To bring our human rights commitment to life, we follow the principles of the United Nations Global Compact (UNGC) and United Nations Guiding Principles (UNGPs) on business and human rights. Furthermore, we employ a wide range of controls to assess, prevent and mitigate risks of human rights violations and more general labor rights violations across our operations. Our enterprise risk management framework incorporates relevant human rights issues and brings accountability and responsibility for risk management close to our operations. In addition, we have integrated controls, specifically targeting human rights related risks in our Group-wide internal control framework. These controls include, but are not limited to, compliance with minimum wage requirements, overtime rules, changes to pay, and collective agreements. To further mitigate any adverse human rights impact, SGS applies the four-eyes principle in a rigorous manner to all employment- related decisions. All employment contracts and any changes in an employee’s general conditions require at least two levels of approval and the validation of a human resources professional. In our continuous effort to integrate human rights considerations throughout our operations, we have developed a Human Rights Due Diligence Checklist, tailored for use during future social compliance audits within our own operations. This initiative helps us manage operational risks more effectively, uphold our responsible business practices, and foster positive engagement with our stakeholders. SGS has put in place several policies, procedures and plans to prevent and reduce the risk of having a negative impact on human rights as part of our ongoing commitment to upholding such rights. All policies, programs and plans aimed at preventing and mitigating human rights risks apply to all SGS employees and all offices and laboratories operated by SGS. These policies include the following aspects: Diversity in the recruitment process To ensure that we are increasing the diversity of our hiring, we train our recruiters on recruitment best practices and talent acquisition, and our managers in recruitment, interviewing and diversity best practices. We are also measuring the gender diversity of our applicants. SGS has a standardized recruitment process. The process includes the use of interview scorecards to standardize the evaluation of our candidates in the interview process. The proper and consistent use of interview scorecards helps us to remove potential interview bias, create a quantitative standard for candidate evaluation, and make better hiring decisions. Furthermore, SGS designed a gender bias toolkit to help us prevent using gender-biased wording in job adverts. Gender-biased words can be viewed as discriminatory towards male or female candidates and could discourage people from applying to work for SGS. In enhancing our recruitment practices, we have increased the use of AI predictive analytics. By integrating AI tools, we are able to analyze a wide array of candidate data without prejudice, effectively removing unconscious biases from the hiring process. The utilization of AI in our recruitment strategy reinforces our dedication to promoting diversity by ensuring that hiring decisions are based on merit and potential, regardless of the candidate’s background. Fair and competitive remuneration SGS is committed to providing fair and competitive remuneration packages in all the markets in which we operate. Our approach ensures a fair and competitive remuneration package by utilizing a globally recognized job architecture methodology throughout the SGS Group. This methodology evaluates each job based on its contribution to our business success as well as the knowledge, qualification, skills and experience required to perform the job. It allows us to benchmark our remuneration packages against local market practices, using data collected from salary surveys conducted by reputable professional service providers. Salary adjustments are a reflection of the employee’s contribution to our business success as well as external factors such as local legislation and collective bargaining agreements where applicable. The deployment of our new human capital management system, mySGS, has significantly enhanced our ability to manage and evaluate global job architecture effectively. With mySGS, we have centralized job data, including job grades. This enables us to conduct comprehensive data analysis, such as gender pay gap analysis. It provides immediate insight into pay disparities, which we can address promptly through corrective measures. This level of analysis and proactive management ensures our remuneration packages remain fair and competitive, while reinforcing our commitment to equal pay for work of equal value across the SGS Group. In adherence to our anti-discrimination and dignity at work policy, we continue to ensure that every employment-related decision, including compensation, benefits, recognition and promotions is based solely on an individual’s qualification, performance and behavior or other legitimate business considerations without discrimination. We rigorously respect minimum wages defined by the local regulations and comply with all the mandatory requirements defined by local legislation or binding collective bargaining agreements with regards to wages and their evolution. 172 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information No cash policy SGS recognizes that cash-based wage payments are not only inefficient for employers, but also risky and disempowering for workers. We therefore follow the recommendations of the International Labour Organization and the UN-based Better Than Cash Alliance to shift wage payments from cash to digital, in order to promote respect for workers’ rights, broaden financial inclusion and make payments safer and more transparent. Our Group policies require wages to be paid digitally and not through cash or cheques. Education and employability SGS promotes the right to education by offering continuous learning opportunities to all our employees. Our employee online learning portal offers a large portfolio of learning opportunities, ranging from technical knowledge to interpersonal and management skills. It enables our employees to fully customize their individual learning path to their needs. We believe that helping our employees embrace a lifelong learning mindset will empower them to increase their employability and help them be more resilient to life challenges. The recent integration of an auto-translation tool into SGS Campus allows for course materials to be translated into 72 languages, significantly increasing the accessibility and reach of these resources. This enhancement ensures employees worldwide can engage with learning in their native language, promoting inclusivity and fostering a learning environment that accommodates a diverse workforce. Anti-discrimination and dignity at work As stated in our anti-discrimination and dignity at work policy, SGS does not tolerate any discriminatory practices, harassment or bullying, in particular based on age, civil partnership, disability, ethnicity, family status, gender, gender identity, ideological views, marital status, nationality, political affiliation, pregnancy, religion, sexual orientation, social origin or any other status that is protected as a matter of local law. We encourage our employees to act immediately and speak up if they encounter discrimination. At SGS, there is no place for any form of discrimination. Facilitating the freedom of expression and opinion At SGS, we are dedicated to fostering an atmosphere where people can freely engage in dialogue, offer ideas and voice their opinions without worrying about facing consequences. We place a high priority on open communication. To foster sharing, cooperation and engagement, we are dedicated to fostering an open and sincere relationship with our employees, as stated in our business principle on leadership. To enable our employees to share their honest feedback anonymously and to help us understand how our employees feel about working for SGS, we conduct regular employee engagement surveys. Bonded labor, child labor and forced labor SGS does not engage in bonded labor, child labor or forced labor. As an inspection, verification, testing and certification company, it is in the nature of our business to employ workers with a certain level of occupational qualifications (e.g. inspectors, auditors, office workers, laboratory personnel). In our own operations, many of our activities are therefore considered inherently low-to-medium risk for bonded labor, child labor or forced labor. Health and safety (H&S) Our health, safety & environment policy statement and the SGS Rules for Life sets the foundations of our H&S management system. Our H&S management system covers all personnel, including employees, clients, contractors and visitors, at SGS locations or locations operated by SGS. It defines the criteria to be met to comply with our own requirements and with local laws and regulations. To ensure compliance, we audit regions and countries centrally, while local H&S managers audit our laboratories, offices and facilities. The audit results go into our performance reports, along with incidents and hazards information captured in the system. All site managers are expected to perform risk assessments and develop associated action plans. Employees have the right to stop work at any time, without reprisal, if they consider there to be a health, safety or environmental risk. To ensure early detection of potential ill health, we conduct pre-employment and periodic health surveillance on our workforce. Through appropriate case management, we support management and recovery from illness resulting from these exposures. We promote initiatives to enhance the physical and mental well-being of our employees to ensure their fitness for work. This includes the provision of preventive health measures, such as vaccinations, and mental and physical health programs focused on awareness, support and resilience. Each role at SGS requires specific H&S knowledge to support the safety and well-being of our employees. All employees are given training on site standard operating procedures, along with regular training sessions on Group H&S management systems and Rules for Life. We also operate a behavior-based safety peer-to-peer observation program. Processes for engaging with own workers and workers’ representatives about impacts Works councils One of SGS’s primary communication channels with employee representatives is the European Works Council (EWC). The EWC serves as a formal platform where management informs and consults employees on significant business developments and decisions at a European level that could impact their employment or working conditions. The EWC representatives are selected based on the rules of each of the 25 European member countries, with each country represented by at least one delegate. Depending on the workforce size within a country, representation may increase to two or three members. To facilitate regular and effective communication, the EWC elects five representatives to form a select committee, which serves as the primary contact for management throughout the year. The committee addresses mutual initiatives and issues requiring discussion. The selected committee and management typically meet in person once or twice a year, supplemented by ongoing communication via email or virtual meetings. Additionally, an annual in-person meeting is held over three to four days, during which all 30 EWC representatives are invited. This meeting includes specialized training by external trainers to strengthen the representatives’ understanding of European legislation and EWC rights. One full day is dedicated to meetings with SGS management, providing an opportunity to align SGS’s strategic direction and overall performance. The Head of Europe at SGS oversees this engagement, supported by the Head of HR Europe. Their leadership ensures that EWC representatives’ feedback and insights are actively integrated into decision-making processes. This includes considerations in strategic areas such as acquisitions, divestments, reorganizations and structural changes. To assess the effectiveness of this engagement, SGS conducts an annual evaluation following the week’s meetings, gathering feedback from EWC members to inform improvements in our collaboration. In addition to formal meetings, informal sessions are held to foster open dialogue, enabling management and EWC representatives to continuously refine their approach and strengthen mutual understanding. The EWC plays a vital role in shaping SGS’ approach to workforce- related matters, offering invaluable perspectives that guide us in managing both the current and potential impacts on our employees. 173 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Employee Voice & Engagement Our Employee Voice & Engagement survey enables us to understand employees’ perceptions on important topics such as Company strategy, workplace practices, workload management, recognition, health and safety (H&S), and sustainability. Last year, we introduced a new Employee Voice & Engagement platform with pulse surveys, allowing us to collect more frequent and focused insights, enhancing our responsiveness to employee feedback. After each survey, we analyze strengths and areas of improvement. Tailored action plans are then developed and implemented at the country level, ensuring that feedback is addressed locally. Confidentiality is rigorously maintained. All responses remain anonymous and are aggregated for reporting. This structured process supports continuous improvement in employee engagement, ensuring that managers can address priorities based on real-time feedback, fostering a collaborative and responsive workplace culture. Performance reviews Our formal performance review process occurs annually and is a key communication channel between employees and their managers. During these reviews, employees discuss their performance relative to set targets and establish new goals for the coming year. This process also allows employees to share any concerns or career development needs with their managers. We customize the performance review approach based on the role, employing methods such as management by objectives and agile conversations. Managers are encouraged to provide ongoing feedback throughout the year, ensuring continuous performance alignment and development. Processes to remediate negative impacts and channels for own workers to raise concerns Employees can raise concerns through multiple channels, including direct communication with their manager or team leader, contacting Human Resources, or using established reporting mechanisms such as the SGS Integrity Helpline. All reports will be handled with confidentiality, sensitivity, and in accordance with applicable laws and policies. Any employee or third party can report violations through our Integrity Helpline. All the reports received are considered and evaluated. Based on the data received, we assess whether an investigation is needed or whether more information is required. Reported issues might be discarded only if the information provided was not sufficient or if the issue reported is not in the scope of the Code of Integrity. We do not tolerate violations of the Code of Integrity. Violations of the SGS code will result in disciplinary action, including termination of employment and criminal prosecution for serious violations. We recognize that, even with the best policies and practices, SGS may cause or contribute to an adverse impact that we have not foreseen or been able to prevent. When this occurs, SGS applies remediation actions to ensure that the people who were negatively affected receive an effective remedy. In line with the UNGPs, when an adverse impact is detected in our own operations, SGS is committed to taking transparent action to remedy the situation in a fair and equitable manner. Should the adverse impact be found in the supply chain, SGS will encourage its suppliers to respect human rights, either through the development and implementation of corrective action plans or through governance. Taking action on material impacts on own workforce Talent attraction and retention SGS completed the second phase of the mySGS Global Human Capital Management (HCM) system implementation, integrating talent review, succession planning, goal setting, and performance management into a unified platform. This standardization enhances our ability to attract, retain and develop top talent while aligning individual goals with organizational objectives. Our efforts were recognized by Workday, who gave us the Rock Star award for the best large-scale global rollout. We developed the ‘Stay Conversation’ and ‘Career Conversation’ frameworks to provide managers with tools for proactive engagement with employees on retention and career development. The ‘Stay Conversation’ helps managers address retention topics early, while the ‘Career Conversation’ offers a structured approach for discussing career aspirations, challenges and opportunities. The outcomes from these conversations will be translated into concrete actions and integrated into personalized development plans, ensuring systematic follow-up and execution. To further support future growth, we established a dedicated talent pool for critical P&L positions, securing a strong leadership pipeline in alignment with our Strategy 27. Training and skills development We integrated SGS Campus, our dedicated online learning portal for employees, with mySGS, enhancing our talent development capabilities and creating a unified learning environment across the organization. We launched a new online learning platform for leadership development, providing access to a wide range of courses from major business schools. This platform empowers employees to drive their own development at their own pace. We have developed a new Leadership Program to support the implementation of Strategy 27, scheduled to launch in 2025. This program aims to equip leaders with the necessary skills to achieve our strategic goals. We are also helping employees become more digital in their daily tasks. We organized nine sessions during 2024 covering different topics, specially focused on the use of productivity applications. In the future, we will focus on the basic processes that employees have in their daily work, like managing documents, planning and organization. This way, we can support people to become more productive and efficient in their daily work. In 2025, we plan to deliver training on the following areas: communication and collaboration, planning and prioritization, project management, time management, reporting, problem solving and decision making, and administrative tasks. In addition to this, as part of our goal of delivering high-quality training to our employees, we have begun developing a comprehensive sustainability training framework. This framework includes a basic course for all employees, an intermediate course for those seeking specialization, a course for Top Management, and continued human rights training, which was already part of our curriculum. The courses include several topics such as climate change, integrity, diversity and human rights, with a key focus on SGS strategic priorities. 174 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Performance reviews In 2024, we designed a continuous performance management model that supports ongoing coaching and feedback between managers and employees. This model will be fully integrated into the 2025 performance management cycle. We have implemented a new system to manage the performance reviews process integrated within mySGS. The process focuses on setting clear expectations, continuously monitoring progress, providing regular feedback, and offering coaching and support to develop employees’ skills and capabilities. The Employee Voice & Engagement survey In 2024, we expanded the Employee Voice & Engagement survey, inviting more than 62,000 employees to participate, almost three times more than the previous year. The response rate was 76.6%, with an engagement score of 7.3. We also created a pulse survey feature to provide more frequent and focused engagement insights, enhancing our ability to respond to employee feedback. Diversity SGS introduced its first Group diversity, equity and inclusion (DE&I) policy, establishing clear expectations for supporting DE&I at all levels. This policy, together with our updated sustainability business principle, underscores our commitment to creating a workplace that values diversity, promotes equity and empowers all employees. The integration of HR-related processes into the mySGS HCM system has provided us with real-time visibility into workforce demographics and employment management across the Group. This enables us to proactively identify opportunities to enhance DE&I, and implement targeted actions to support a more inclusive workplace. Leveraging these insights, we are well positioned to cultivate a culture that values and empowers all employees. Thanks to our commitment and efforts, we have been included in the FTSE Diversity & Inclusion Index for the second consecutive year. This index ranks over 15,000 companies globally and identifies the top 100 publicly traded companies with the most diverse and inclusive workplaces, as measured by 24 separate metrics across four key pillars: diversity, inclusion, people development, and news and controversies. This Group commitment is reflected at the local level in several ways. For example, for the third consecutive year, SGS Spain, has been awarded the TOP DIVERSITY COMPANY certification, in the framework of the largest professional congress on diversity, equity and inclusion, the DEI SUMMIT, organized by the INTRAMA Foundation. Health and safety We have introduced several targeted training initiatives to enhance the skills and knowledge of our employees, ensuring they contribute effectively to a safer workplace. One of the key initiatives was the global onboarding scheme for H&S professionals, designed to provide new team members with a comprehensive understanding of our safety culture and policies. Additionally, we also implemented a new e-learning onboarding for all new employees and contractors, ensuring that safety remains a priority from day one. These training efforts have fostered greater engagement, collaboration and awareness across our global workforce, contributing significantly to a safer and healthier working environment. Apart from training, we organize several awareness initiatives throughout the year: • As part of our ongoing commitment to ensuring a safe workplace, this year Safety Month focused on preventing slips, trips and falls accidents. These incidents are common in many work environments (from offices to warehouses), and they represent the most common way of being injured at SGS. While everyone is at risk, certain groups are more vulnerable to STF accidents. Older adults, for instance, are at a higher risk due to potential mobility issues and weaker physical condition. In the workplace, employees who frequently navigate between different types of flooring, carry loads that obstruct their view or work in areas with poor lighting are also significantly exposed • During Safety Month, the Global H&S Survey is launched to capture employees’ perceptions and sentiments regarding H&S • Each year, the collected data is thoroughly analyzed to pinpoint opportunities for improvement across global, regional, country, and business line levels. 2024 key highlights include: – 36,012 SGS employees participated in the Global H&S Survey across all five regions, line of businesses and functions – 93% of SGS employees feel protected against the risks associated with their jobs – 94% declared feeling empowered to stop the job when their or others’ health and safety is at risk • We also released a chemical awareness campaign called: Be Safe Be Chemsafe. The goal of this campaign was to raise awareness, reinforce safety practices, address the importance of health protection in the workplace and ensure emergency readiness 175 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3.3. Metrics and targets Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities Embedded in our Strategy 27 and as part of our Sustainability Ambitions 2030, we have set several targets linked to our social impacts, risks and opportunities. For more information see section 1.4. Workforce metrics Workforce breakdown The total number of full-time equivalent employees (FTE) decreased to 99 483 as of December 2024. This was the result of the deployment of a leaner operating model, partly compensated by the successful relaunch of M&A program, bringing more than 500 new FTEs, and by the expansion in operational workforce, supporting the strong growth delivered. Unless stated otherwise, workforce data only includes own employees. Currently, we do not consolidate centrally the data relative to workers who are not employees. 2024 2023 2022 Number of FTEs1 at year end (# FTEs) 99 483 99 589 98 152 Number of employees at year end (# employees) 102 413 103 193 101 860 Employees by gender (female) (% of total employees) 38 37 37 Employees by gender (male) (% of total employees) 62 63 63 Permanent workers (% of total employees) 93 92 92 Casual2 workers (% of total employees) 7 8 8 1. Full-time equivalent employment is the number of full-time equivalent jobs, defined as total hours worked divided by average annual hours worked in full-time jobs. 2. Casual employees are those people who are engaged for short periods of time (man-day, job by job basis). Number of employees by region at year end 2024 2023 2022 Asia Pacific 37 493 37 077 36 987 Europe 24 028 24 473 24 494 North America 5 896 5 778 5 839 Eastern Europe, Middle East and Africa 19 578 19 820 19 171 Latin America 15 418 16 045 15 369 Employees in management positions by gender 2024 2023 2022 Male (% of male employees over total management positions) 65.1 65.7 66.1 Female (% of female employees over total management positions) 34.9 34.3 33.9 176 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Diversity 2024 2023 2022 Employees by age – Under 30 years old (female) (# of employees by ranges of age) 10 853 11 146 10 995 Employees by age – Under 30 years old (male) (# of employees by ranges of age) 13 995 14 500 14 248 Employees by age – 30 to 50 years old (female) (# of employees by ranges of age) 23 163 22 753 22 255 Employees by age – 30 to 50 years old (male) (# of employees by ranges of age) 38 547 39 432 39 695 Employees by age – Over 50 years old (female) (# of employees by ranges of age) 4 812 4 611 4 394 Employees by age – Over 50 years old (male) (# of employees by ranges of age) 11 043 10 743 10 271 CEO-3 employees # of CEO-3 employees 1 240 1 299 1 235 CEO-3 by gender (female) 'Women in Leadership’ (% of CEO-3 female employees) 32 32 31 CEO-3 by gender (male) (% of CEO-3 male employees) 68 68 69 Women in management positions in sales-generating functions (% of women over the total managers in sales-generating functions) 34.0 32.3 31.8 Women in STEM-related positions (% of women over the total STEM-related positions) 38.5 34.3 33.8 Nationality 2024 2023 Employees by top 5 nationalities1(% of share in total workforce) Chinese 16.7 17.0 Indian 5.6 5.6 Spanish 4.7 4.5 German 3.6 3.7 Brazilian 3.5 3.7 Management workforce by top 5 nationalities1 (% of share in total management workforce) Chinese 14.0 14.9 Indian 5.0 5.6 French 4.7 4.8 German 4.3 4.6 Brazilian 3.8 4.1 1. This data covers 97% of our employees as USA employees are not included in this breakdown. Employee engagement 2024 2023 2022 Employees invited to participate in the employee engagement survey (# of employees) 62 052 25 412 28 569 Response rate (%) 77 81 79 Engagement Index (2023 and 2024: average score out of 10; 2022: average score out of 100) 7.3 7.6 69 Actively engaged employees1 (%) 74 79 64 Management support index2 (2023 and 2024: average score out of 10; 2022: average score out of 100) 8.0 8.3 72 1. Employees that are Promoters and Passives (those that gave a score from 10 to 7) based on employee NPS. 2. Management support index (formerly, ‘Manager effectiveness index’ before the new Employee Voice & Engagement platform) is calculated based on the combination of the two questions of the engagement survey: ‘My manager provides me with the support that I need to complete my work’ and ‘My manager communicates openly and honestly with me.’ 177 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Talent attraction and retention 2024 20231 2022 New hires (# of employees) 28 337 27 288 28 430 Internal new hires (% of total new hires) 20.9 16.3 15.1 New hires (female) (% of internal hires) 46.1 45.8 50.3 New hires (male) (% of internal hires) 53.9 54.2 49.7 External new hires (% of total new hires) 79.1 83.7 84.9 New hires (female) (% of external hires) 35.2 36.1 36.8 New hires (male) (% of external hires) 64.8 63.9 63.2 Total number of employees who left the Company during the year (# of employees) 21 746 18 114 18 995 Voluntary turnover (% of permanent employees) 13.7 12.8 14.8 Total turnover (% of total permanent employees) 22.8 19.0 20.3 Total turnover female (% of total permanent female employees) 20.0 18.4 19.6 Total turnover male (% of total permanent male employees) 24.5 19.4 20.8 1. Total number of employees who left the Company in 2023 were updated based on improved data accuracy, with an increase of 124 employees who left. Voluntary turnover has increased 0.1 percentage points and total turnover has decrease 0.2 percentage points. Male 54% Female 46% <30 years 48% 30-50 years 45% >50 years 7% <30 years 40% 30-50 years 52% >50 years 8% Male 65% Female 35% Male 62% Female 38% Internal new hires External new hires Voluntary leaves <30 years 32% 30-50 years 62% >50 years 6% Top management 1% Middle management 10% Junior management 37% Non- management positions 52% Top management 0% Middle management 2% Junior management 10% Non- management positions 88% Top management 0% Middle management 4% Junior management 12% Non- management positions 84% 178 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Adequate wages and compensation 2024 2023 2022 Mean gender pay gap1 (% of difference between men and women employees) 1.3 3.0 2.4 Median gender pay gap1 (% of difference between men and women employees) –7.2 –4.7 –7.3 Mean bonus gap1 (% of difference between men and women employees) 10.8 21.4 21.0 Median bonus gap1 (% of difference between men and women employees) 0.0 –4.0 6.3 CEO and mean employee compensation ratio2 56.4 31.9 28.5 1. This data covers 98% of all SGS employees. 0% means no gap, negative percentage benefits women and positive percentage benefits men. 2. To make the ratio comparable, we have implemented cost of living adjustments using the Purchasing Power Parity conversion rates and it is calculated based only on base salary and bonuses (excluding pension funds and extra hours). Inclusion of persons with disabilities 2024 2023 2022 Employees with disabilities1 979 906 796 Employees with disabilities – female 482 434 369 Employees with disabilities – male 497 472 427 % of employees with disabilities 1.0 0.9 0.8 1. Employees with disabilities are recorded in the HR system according to the local regulation in each affiliate, which may vary between countries. Training and skills development 2024 20231 2022 Training hours per FTE (# of hours per FTE) 61.4 61.1 54.7 Total training hours2 (# of hours) 6 092 636 6 016 570 5 296 680 Management and leadership development training 81 122 110 575 80 972 Apprentice & trainee training programs 270 059 205 020 201 868 Technical training 970 146 832 438 872 340 Non-technical training 123 684 157 183 97 120 Health & safety training 3 432 614 3 423 056 2 937 914 Compliance training 911 257 1 071 096 757 649 Other training 303 754 217 201 348 818 Performance reviews (% of employees who have received performance reviews out of the total eligible) 88.3 79.2 84.5 1. Training hours in 2023 were updated based on improved data accuracy, with a decrease of 0.1 percentage points in Training hours per FTE and a decrease of 15,273 hours in Technical trainings. 2. We do not collect training hours data broken down by gender. We offer different types of training to our employees based on their needs and business demands and regardless of their gender. 179 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Health and safety 2024 2023 2022 Total Recordable Incident Rate (TRIR)¹ (occurrences per 200 000) 0.34 0.32 0.35 Number of recordable incidents² (# of incidents) 355 326 346 Lost Time Incident Rate (LTIR)³ (occurrences per 200 000) 0.17 0.17 0.19 Fatalities (# of cases) 2 2 – Sites certified to ISO 45001 and/or ISO 14001 standards (number of sites) 719 644 562 Sites dual certified to ISO 45001 and ISO 14001 standards (number of sites) 291 278 229 FTE covered by ISO45001 standard (number of FTE) 32 348 28 222 20 862 Percentage of FTE covered by ISO45001 standard (%) 32.5 28.3 21.3 FTE covered by ISO14001 standard (number of FTE) 31 574 26 204 18 195 Safety training hours (# of hours) 3 432 614 3 423 056 2 937 914 Health and safety training per employee (# of hours per FTE) 34.6 34.7 30.4 Total absence rate4 (% of days of sickness absence plus days lost per incidents with lost time per total days worked) 2.07 1.92 2.22 Sickness absence rate (% of days of sickness absence per total days worked) 2.05 1.90 2.20 Work-related absence rate (% of days of days of lost time and restricted duty due to recordable incidents per total days worked) 0.02 0.02 0.02 1. Number of lost time, restricted duty, medical treatment incidents and fatalities per 200 000 hours worked. 2. Number of lost time, restricted duty, medical treatment incidents and fatalities. 3. Number of lost time incidents per 200 000 hours worked. 4. Days of sickness absence and restricted duty per total days worked. Collective bargaining coverage and social dialogue and protection 2024 2023 2022 Percentage of employees covered by collective bargaining agreements1 47 46 46 1. Employees covered by collective consultation/representation processes. The scope is limited to those affiliates where collective bargaining exists according to the International Labour Organization database for coverage rate. 180 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Incidents, complaints and severe human rights impacts 2024 2023 2022 Number of operations identified as having a significant risk of incidences of child labor, forced or compulsory labor, or where the right to exercise freedom of association may be violated – – – Total number of employees trained on our Human Rights Principles 85 628 88 885 79 893 Percentage of employees trained on our Human Rights Principles 83.6 86.1 78.4 1. “Helplines” means channels used by employees and external parties to report suspected violations of the Code of integrity and submitted online, by phone call. Community donations We are committed to supporting the communities where we operate, and do so across three pillars: empowerment, education and environmental sustainability. Through our community program, we help to tackle global challenges such as poverty, equal opportunities, health, education, climate change and environmental degradation. 2024 2023 2022 Community donations1 (CHF thousands on constant currency basis) 1 473 1 722 1 850 Total community projects (# of projects) 528 595 526 Community hours (# of hours dedicated to community) 33 651 32 590 18 691 1. Community donations include: cash, donations in kind and volunteering hours. Donation per type Donation per nature of contribution Donations per pillar Community donation 52% Occasional charitable donation 46% Commercial initiative 2% Cash contribution 54% Volunteering hours 35% Management costs 6% In-kind donation 5% Empowerment 44% Education 35% Environmental sustainability 17% Disaster relief 4% 181 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 4. Governance topics 4.1. Governance The role of the administrative, supervisory and management bodies The Board of Directors has the ultimate responsibility for the strategic direction, supervision and the control of the management of the Company and the Group. Such responsibility includes, among others, respecting the Company’s business principles, Code of Integrity and any other policies or procedures relevant to the ethical conduct of business as may be enacted from time to time, defining and approving the business principles, values and codes of conducts and setting the tone of the Group business culture. In addition, the Audit Committee assists the Board in ensuring Group compliance with legal and regulatory requirements. The Audit Committee has the following attributions in relation to: • Reviewing and discussing any fraud, whether or not material, that involves management or other employees who have a significant role in the Group’s internal controls • Reviewing major litigation or material legal matters involving the Company or the Group • Reviewing reports on compliance matters, including on violations of the Code of Integrity, internal investigations, whistle-blower reporting procedures, information regarding due diligence of business partners, agents and suppliers, and other such matters brought to the attention of the Committee by the Chief Compliance Officer Finally, the Board is responsible for maintaining an appropriate level of oversight on the Company’s activities, ensuring compliance with applicable laws and internal and external rules and regulations. In turn, the Executive Committee is entrusted with implementing the strategy, goals and objectives of the Company, maintaining the same tone from the top with regards to business culture and managing the day-to-day business operations of the Company. The members of the Executive Committee and the Board have a deep level of understanding of the SGS compliance framework and requirements and are fully committed to conducting and promoting SGS’s business in a highly ethical and sustainable manner. Both the Chief Compliance Officer and the Head of Business Ethics have extensive experience in business ethics and compliance. 4.2. Impact, risk and opportunity management Business conduct policies and corporate culture Being trusted is a prerequisite of everything we do as a business. The SGS Code of Integrity applies to all employees, as well as affiliated companies, contractors, subcontractors, joint venture partners and agents. The new edition of the SGS Code of Integrity was launched in May 2024. It formally introduces the responsibility of employees in management roles to ensure that their direct reports have been properly trained, fully understand the content of the training course and are able to comply with and apply the Code, and that they act with integrity. The revised version also highlights the rules on sanctions and trade controls, money laundering, and criminal and terrorism financing. Key activities in 2024 related to business conduct include: • New integrity assessments as a proactive and preventive measure to determine the control framework to prevent integrity risks across the SGS Group network • Reporting of the locally investigated Code of Integrity violations to the global platform in order to collect accurate, centralized data • Implementation of local channels in various affiliates to report suspected or known violations of the SGS Code of Integrity • New global, regional and local learning offerings: live webinars, integrity minutes • Implementation of a global framework to mitigate the sanctions risk. In this regard, there has been a substantial increase in the use of the sanctions advisory service Grievance mechanisms We communicate extensively throughout the Group on the different channels through which employees, external rightsholders and stakeholders can bring any breach of the Code of Integrity to our attention. Our SGS integrity helpline is available 24/7 in multiple languages online and by phone and is offering a way to report concerns confidentially and anonymously. The SGS integrity helpline is operated by an independent service provider that specializes in dealing with compliance and ethics concerns. Communications made to this helpline are treated confidentially and are reported to the SGS compliance team, which protects the anonymity of the informant, where required. SGS does not tolerate any form of retaliation or adverse consequences for having sought advice or reported any violations or risks of human rights violations. Retaliation against a rightsholder who has reported a violation in good faith will result in disciplinary action. Animal welfare At SGS, we are committed to minimizing animal testing by exploring other methods to ensure product safety and efficacy. In very limited cases, animal testing is still required by regulators, as there is no alternative way to assess specific risks. Where regulations require animal testing, such as for environmental ecotoxicology risk assessments, we comply strictly with all legal standards while considering all viable alternatives first. We collaborate with industry partners to advance other testing methods and reduce reliance on animal tests wherever possible. Training and awareness Our foundational and annual mandatory training, Think Integrity, ensures that every employee understands the rules of the SGS Code of Integrity and the Integrity Helpline, as well as the principles, values and standards that guide our business operations. Real-world integrity dilemmas are presented through scenarios, allowing employees to navigate complex situations and make integrity-based decisions: • Target audience: all employees and contractors • Frequency: annual • Coverage: includes Executive Committee members; Board members will be added shortly The Compliance & Business Ethics Global Network facilitates ongoing regional webinar training sessions. These sessions provide targeted insights into the rules of the revised Code and address specific integrity challenges unique to each region: • Target audience: regional • Frequency: three sessions per quarter • Coverage: all employees – non mandatory We also conduct integrity sessions on the rules of the SGS Code of Integrity, which consist of micro learning, and are issued via email approximately on a monthly basis. Several other initiatives are also accompanied by communication campaigns which may include videos, emails and information on several channels, articles on SGS’s intranet, and even posts on social media, such as LinkedIn. Field and in-office material may also be launched with the campaign. These campaigns do not have a pre- established frequency. In addition, senior management and leaders support and periodically communicate the importance of business ethics, compliance and integrity in their speeches, communication messages, town halls and meetings with their teams. They are responsible for acting as role models for the rest of our employees. 182 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Employees in management roles must also ensure that all direct reports have been properly trained, fully understand the content of the training course, and are able to comply with and apply the Code. They must also ensure that employees under their supervision act with integrity and comply with the Code. Employees in management roles are expected to be responsive to anyone who seeks guidance or raises concerns and to treat them seriously and in confidence. Employees in management roles to whom suspected or known violations of the Code are reported must escalate them in accordance with the applicable SGS Group policies. Management of relationships with suppliers and sustainable supply chain We have a significant opportunity to extend our sustainability principles to many more businesses and employees beyond our own. As a responsible major purchaser, we ensure that goods and services are sourced sustainably and that our suppliers respect human rights. Our Supplier Code of Conduct, updated in 2024, sets out the basis of our responsible sourcing approach. It defines not only the non- negotiable minimum standards that we ask our suppliers to respect when conducting business with SGS, but also the values which are shared throughout SGS, its various businesses and affiliates. Every supplier that wants to do business with SGS is required to sign the SGS Code of Conduct to ensure that they are aligned with our standards and commitments. We have implemented the SGS self-assessment questionnaire (SAQ) for our key global and local suppliers operating in the top 25 countries. This is a strategic program that aims to identify potential sustainability risks in our supply chain, especially those concerning human rights and childhood protection, and take action to mitigate these risks, towards a full human right-protected partnering. This program is mandatory for all suppliers in scope to ensure that our current/potential partners comply with our standards. In 2024, we deployed the SGS SAQ program to our most strategic suppliers. This program ensures a sustainable supply chain by assessing our suppliers and creating a sustainability risk map. Based on this map, we collaborate with our suppliers, providing guidance and best practices from our new SGS Sustainability Guidebook to help mitigate high-impact issues in our supply chain. This represents our continuous commitment to fostering sustainable partnerships. Additionally, we have initiated a review of the program based on the results of the first phase, to optimize alignment with our goals. We integrate social and environmental criteria in the selection of our suppliers since 2023. Since 2024, we have extended the number of social and environmental criteria in the selection of suppliers through our sourcing process. Besides requesting our participating suppliers to adhere to our Code of Conduct, we take other social and environmental factors into account in the evaluation of our suppliers, like child employment prohibitions, employee rights and anti-discrimination policies, environmental and H&S policies and management systems, and commitment to reduce carbon footprint. Prevention and detection of corruption and bribery There are various global (including the Integrity Helpline) and local channels that allow detection of corruption and bribery and through which SGS employees, and externals can report known or suspected violations of the SGS Code of Integrity, including those related to corruption. The Compliance & Business Ethics function has direct communication channels into the Executive Committee and the Audit Committee. The Chief Compliance Officer and the Global Head of Business Ethics regularly report to the Audit Committee, which is composed of members of the Board of Directors, on all business ethics, compliance and integrity related matters. The Chief Compliance Officer also has direct access to the Chairman of the Board. Moreover, the Global Head of Business Ethics reports to the Executive Committee on the progress and status of the various SGS integrity program initiatives. 4.3. Metrics and targets Compliance and integrity 2024 2023 2022 Total number of integrity issues reported through integrity helplines¹ 512 450 374 Total number of breaches of the Code of Integrity identified through integrity helplines¹ 111 89 73 1. ‘Helplines’ means channels used by employees and external parties to report suspected violations of the Code of integrity and submitted online, by phone call, sent via fax, email or post. Breakdown by type of breach1 Conducting business 44 Protecting assets 35 Acting with respect 21 Complying with laws 11 1. Breakdown based on the categories defined in the Code of Integrity. The following breaches are included: 7 cases of corruption and bribery (measures taken for these cases were terminations of employees and disciplinary actions), 1 case of discrimination (measure taken for this case was the termination of one employee) 1 case of data privacy and 15 cases of conflict of interest. Breakdown by type of consequence1 Strict disciplinary actions by person2 87 Medium disciplinary actions by person3 50 Cases requiring corrective actions4 29 1. Consequences adopted during the reporting year. Some of these consequences may refer to breaches confirmed in previous years. 2. Termination with cause, without cause or by mutual agreement or resignation. 3. Financial sanction, suspension, written or verbal warnings or function demotion. 4. Process corrections, improvements, financial recovery actions, trainings or communications. 2024 2023 2022 Percentage of employees signing the Code of Integrity 100 100 100 Percentage of employees trained on the Code of Integrity1 99.5 99.9 99.9 Percentage of operations analyzed for risks related to corruption 100 100 100.0 Public legal cases regarding corruption brought against the organization/employees – – – 1. The calculation is based exclusively on permanent employees who completed the annual integrity training. 183 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Political influence and lobbying activities We do not provide any financial or in-kind support, given directly or indirectly, to political parties, their elected representatives or persons seeking political office. We support some industry associations, but the sum is not material, representing approximately 0.01% of our sales. 2024 2023 2022 Lobbying, interest representation or similar (CHF) – – – Contributions to local, regional or national political campaigns, organizations or candidates (CHF) – – – Trade associations or tax-exempt groups (e.g. think tanks)1 (CHF) 1 294 767 909 129 1 121 161 Other (e.g. spending related to ballot measures or referendums) (CHF) – – – Total contributions and other spending (CHF) 1 294 767 909 129 1 121 161 Contribution to industry associations as % of sales (% of sales) 0.01 0.01 0.02 1. The main associations we contributed to in 2024 were: Association of Professional Social Compliance Auditors: CHF 420,990; OT Technology Spain: CHF 131,307; Six Swiss Exchange: CHF 88,000; TIC Council: CHF 73,590; Energy Institute: CHF 65,870. Sustainable procurement and supply chain 2024 2023 2022 Spend analyzed for sustainability risks1 (%) 100.0 100.0 100.0 Tier 1 Suppliers analyzed for sustainability risks2 (% of total Tier 1 suppliers) 100.0 100.0 100.0 Number of local suppliers (% of total suppliers) 98.9 99.0 98.0 Number of global suppliers (% of total suppliers) 1.1 1.0 2.0 Spend of local suppliers (% of total spend) 90.2 89.0 84.0 Spend of global suppliers (% of total spend) 9.8 11.0 16.0 Spend by supra-region – Europe, Africa and Middle East (% of total spend) 44.0 43.0 46.0 Spend by supra-region – Asia Pacific (% of total spend) 32.0 35.0 34.0 Spend by supra-region – Americas (% of total spend) 24.0 22.0 20.0 1. Potential sustainability risks identified in the supply chain in 2022 assessment (as a % of spend): − Economic risk: low: 59%; medium: 40%; high: 1% − Social risk: low: 65%; medium: 35%; high: 0 − Environmental risk: low: 49%; medium: 49%; high: 2%. 2. Tier 1 suppliers within the scope of the SAQ. Spend by category In 2024, a new system to monitor procurement spend was implemented and we now have a more accurate spend categorization. Spend by category is presented as a percentage of total spend. (% of total spend) 2024 Banks and financing 3 Car fleet 5 Insurances and pensions 5 Information technology and telecommunications 8 Laboratory 25 Logistics 4 Professional services 7 Real estate 17 Subcontracting 21 Travel 3 Other 2 184 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 5. Company-specific topics 5.1. Customer relationship and satisfaction We expand and enhance our Voice of the Customer program every year to support our long-term customer satisfaction targets. In an effort to obtain a more representative sample and thus gain greater visibility into our global customer experience, we have expanded the scope of countries participating in our Voice of the Customer survey. Furthermore, we are making progress in integrating the various tools related to customer service (VOC, CRM, Mailing, etc.) to achieve better data quality and measurement, ensuring this information can be accessed from all relevant platforms. We have developed internal training programs with the aim of increasing and enhancing communication with customers (a key area for improvement from prior surveys). We have also prepared and launched workshops at local level to facilitate the creation of action plans based on the results of the surveys. After implementing these and other actions we expect to significantly improve our customer experience and therefore our results in future surveys. 2024 2023 2022 Customer satisfaction score (% score) 911 91 85 Group sales covered by Voice of the Customer surveys2 (% of total sales) 78 78 76 Countries participating in Voice of the Customer survey (# of countries) 34 27 27 Responses to Voice of the Customer surveys (# of responses) 32 588 26 140 19 000 1. In 2024, we adjusted the methodology to include the weight by operating segment. 2. 2023 data corrected in 2024. 5.2. Cybersecurity and data privacy Information security and cybersecurity IT security/cybersecurity governance The Audit Committee supports the Board of Directors in discharging its duties in relation to financial reporting and internal controls. This includes specific IT security/cybersecurity risks. It receives regular reports on cybersecurity incidents and measures taken by management to address this risk. We have implemented an information security management system (ISMS) certified under ISO/IEC 27001 since 2023, which ensures a structured and systematic approach to managing security risks. This system includes clear and defined governance mechanisms to oversee information security activities, aligned with international best practices. We have also designated Board-level responsibilities for overseeing information security risks. This is achieved through a dedicated Information Security Committee, which annually reviews risks, controls, and progress in security. This committee is responsible for ensuring that the ISMS aligns with the organization’s strategic and business objectives. Additionally, the Risk Committee at the Board level also includes information security as a priority item on its agenda, enabling the integration of security risk management within the enterprise risk management framework. The Company has appointed a Global Chief Information Security Officer (CISO) responsible for leading the information security program and reporting directly to the Board through the Security Committee. The CISO is accountable for implementing and maintaining the ISO/IEC 27001-certified ISMS, coordinating internal and external security audits, managing incident response, and ensuring security awareness across the organization. This role is supported by six regional information security officers (RISO) and the Global Information Security (GIS) area, which provides SecOps, IAM, Vulnerability Management, and GRC services. Additionally, the Chief Information Officer (CIO) works closely with the CISO to integrate security within the Company’s technological and digital strategy, ensuring comprehensive cybersecurity coverage across all information systems. David Plaza, CIO of SGS, has been appointed to the Executive Committee. In this role, he drives the implementation of a robust IT roadmap to support the goals of Strategy 27. SGS has established robust governance mechanisms for information security, including an ISO/IEC 27001-certified ISMS, continuous oversight by the Board of Directors, and designated executive roles with clear responsibilities in security. This structure ensures that our security processes comply with international standards and are backed by strong governance and risk management policies. 185 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information IT security/cybersecurity policies In 2024, policies were reviewed and updated to ensure all were aligned with ISO/IEC 27001, and we created an SGS Security white paper to document security strategies and standards. SGS has a comprehensive information security policy framework that is accessible to all employees. This policy outlines our commitment to ensuring the security of our information assets and protecting stakeholder data. The Company’s policy includes a commitment to: • Continuous investment in information security systems: we are committed to ongoing investment in advanced security technologies and solutions to enhance the resilience of our information security systems. This includes regular updates and upgrades to our security infrastructure in alignment with evolving cyber threats • Integrity and protection of data: our policy prioritizes the integrity and confidentiality of all data handled by the Company. We have implemented robust data protection measures to prevent unauthorized access, data breaches and loss of sensitive information • Monitoring and responsiveness to information security threats: we maintain a proactive approach to threat monitoring and incident response. We have a dedicated Security Operations Center (SecOps) that operates 24/7 to detect and respond to potential security incidents in real time • Establishing individual responsibilities for information security for the entire workforce: our policy assigns clear security responsibilities to all employees, fostering a culture of security awareness and accountability. Regular training and awareness programs are conducted to ensure that everyone understands their role in protecting Company and customer information • Applicable requirements designated for third parties (e.g. suppliers): we enforce strict security requirements for third-party vendors and suppliers, including regular assessments to ensure compliance with our security standards. These requirements are included in all contracts and are monitored continuously Impacts, risks and opportunities management SGS has a comprehensive information security management program (ISMP), which covers a wide range of security elements designed to protect our information assets and respond to potential security threats. The Company’s program includes: • Escalation process to report incidents, vulnerabilities, or suspicious activities: we have established a clear and accessible process to report any security-related concerns, incidents, or suspicious activities. This process includes a dedicated hotline, an internal reporting tool and guidance on the immediate escalation of high-risk incidents • Information security-related business continuity plans: we maintain robust business continuity and disaster recovery plans specifically tailored to address information security incidents. These plans are tested regularly to ensure readiness in the event of a cyberattack or data breach • Information security vulnerability testing: we conduct regular vulnerability assessments and penetration testing to identify and mitigate potential security weaknesses. Our vulnerability management program is part of our commitment to continuous improvement in security • Internal audits of the ISMSs: internal audits are conducted annually to evaluate the effectiveness of our ISMP, ensuring compliance with internal policies and industry standards. The audit results are reviewed by senior management and used to drive improvements in our security posture • External certification of information security management: our ISMS is certified under ISO/IEC 27001, demonstrating our adherence to international best practices in information security management. This certification reflects our commitment to maintaining the highest standards in data protection and risk management The ISO/IEC 27001 certification not only validates the strength of our ISMS but also provides us with a key competitive advantage in an environment where data protection is critical. This renewal ensures that we continue to operate with a rigorous and systematic approach to risk management, making sure that our internal processes not only comply with global regulations but are also secure and efficient. For our clients, ISO/IEC 27001 is a guarantee that their information is protected against threats and vulnerabilities. This strengthens the trust in our ability to safeguard their most sensitive data, a core value that sets us apart and fosters lasting relationships built on security and transparency. Moreover, by maintaining such high standards, we contribute to the sustainability of our business. Secure data management minimizes the risk of breaches, legal issues and reputational damage, which in turn ensures long-term business stability. Efficient security practices also support environmental sustainability by promoting digital processes, reducing paper consumption, and optimizing energy use in data storage and management systems. • Information security awareness training: all employees undergo mandatory security awareness training, which includes modules on recognizing phishing, secure handling of data, and reporting suspicious activity. Training is conducted annually and supplemented with ongoing security communications and refreshers • Monitoring of information security breaches: we have a dedicated SecOps that continuously monitors our environment for any security breaches or unusual activity • Certification and compliance: we conducted NIS2 and IoT/ OT security assessments to ensure compliance with current regulations • Identity and Access Management (IAM): the deployment of passwordless authentication (Windows Hello) and the introduction of identity governance tool for financial users has significantly enhanced our access control mechanisms. • We implement leading market solutions for identity threat detection and response to mitigate risks of identity attacks on servers and workstations, as well as identity governance tools • Performance and recognition: leading BitSight security ratings for over a year, consistently maintaining a rating above 720 across all regions 186 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Data privacy SGS is committed to supporting the right of any individual to control their own personal information and to make decisions about it. Privacy is a fundamental human right and SGS has adopted an approach that protects the personal data of our customers, employees and third parties from the moment we collect it to the time we destroy it. Data privacy is a key principle of our Code of Integrity. SGS respects the privacy and confidential nature of the personal information of any individual we interact with to the extent required for the effective operation of its business or for complying with legal requirements. Our data privacy policy, upgraded in 2024, governs how we collect, use and manage the personal data of customers, employees and third parties. Moreover, we have developed a management framework to allow us to manage personal data in a manner that is consistent with the data privacy policy across all affiliates. Aside from the policies, our data protection officers provide continuous advice, identify privacy risks, develop policies on specific issues and train employees on data privacy. We also take data privacy into consideration from the outset when developing new services or processes. By following the privacy by design approach, we aim to avoid a ‘collect first, ask questions later’ approach to personal data. For those projects that entail data privacy concerns, our data protection officers work closely with the relevant business and IT security teams to undertake a data protection impact assessment, documenting both the potential risks to individuals and the measures being taken to minimize them. In 2024, we have developed and deployed the SGS Data Privacy Controls Checklist. This checklist includes a comprehensive inventory of 13 privacy management categories and over 130 privacy management controls and activities, crafted to guide all SGS affiliates in meeting local privacy laws, while showcasing accountability in managing personal data and minimizing the risk of complaints. These controls will also serve as measurable benchmarks, enabling the tracking of data privacy compliance progress across SGS countries and regions. We have also adopted and implemented retention rules within two critical global applications in HR and Sales and Marketing. This includes establishing clear retention periods, implementing storage guidelines to ensure local compliance, enhancing data quality and minimizing potential risks. Data retention is a critical aspect of modern data management, balancing our need for information access with legal, regulatory and business requirements. It supports the responsible management of increasing data volumes and strengthens the trust of our customers. Finally, any individual who wants to exercise their privacy rights can do so by simply visiting our online privacy request form at www.sgs.com. We will not discriminate against individuals who choose to exercise any of their rights. Specifically, SGS will not deny goods or services, charge different prices or rates, or provide a different level of quality of services. 2024 2023 2022 Number of complaints received from outside parties and substantiated by the organization (# of complaints) 1 – – Substantiated complaints concerning breaches of data customer policy (# of complaints) – – – Number of complaints from regulatory bodies (# of complaints) – – – Completion rate of data protection and privacy e-learning (% of people invited to the eLearning) 98 N/A1 N/A1 1. Data protection and privacy e-learning is a new course launched in 2024 5.3. Risk management The content of this section is addressed in the Governance report pages 45 to 50. 5.4. Sustainability services The content of this section is addressed in the Management report pages 2 and 21. 187 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.1. Glossary The definitions and calculation methods of the indicators disclosed in the Non-financial statements are mostly based in Global Reporting Initiative (GRI) Standard and can be found in SGS Basis of reporting, available at sgs.com. Definitions for certain key indicators are explained as follows: Customer satisfaction Measurement of the level of customer satisfaction of the service SGS provides, collected through the global Voice of Customer program. The calculation method is based on the number of satisfied customers (rating of at 4 or 5, out of 5)/number of survey responses x 100. In 2024, we adjusted the methodology to include the weight by operating segment. Training hours Training hours include all training provided to employees internally or externally, in person or virtually. When specified, training hours also include training delivered to clients through the SGS Academy and training delivered to communities through the SGS Academy for the Community. Women in leadership Percentage of women managers up to level CEO-3. A manager is defined as an employee with a people-management responsibility and/or Profit & Loss responsibility and/or reports to an ExCo member, Managing Director or Business managers (except clerical jobs). GHG emissions Emissions of carbon dioxide equivalent (CO2eq) to the atmosphere resulting from the company’s operations and value chain. CO2eq emissions are accounted based on the guidelines of the GHG Protocol. Engagement index Engagement is a measure of how committed to and enthusiastic employees are about their work and the organization. The index is the average engagement score given by survey respondents in response to 3 engagement questions: • How likely is it that you would recommend SGS as a place to work? • How likely is it that you would stay with SGS if you were offered the same job at another organization? • Overall, how satisfied are you working at SGS? It’s calculated by averaging each employee’s engagement score based on their answer to all the engagement questions and ranges between 0 to 10. Number of experts Based on SGS’s job architecture, the level and grade of roles, this includes all those roles which require a technical background. It does not include roles in general management, administration, support functions or profiles requiring no technical qualifications. Employees trained to the Code of Integrity Number or percentage of permanent employees who have completed the annual mandatory integrity training. 6. References 188 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.2. GRI SGS has reported the information cited in this GRI content index for the period 1 January 2024 to 31 December 2024 with reference to the GRI Standards. GRI standard and disclosure Reference Reported performance Assurance GRI 2: General Disclosures 2021 2-1 Organizational details Page 90 2-2 Entities included in the organization’s sustainability reporting Pages 144-145 2-3 Reporting period, frequency and contact point Pages 154 and 200 2-4 Restatements of information Page 157 2-5 External assurance Pages 154, 197-199 2-6 Activities, value chain and other business relationships Pages 10-11, 32-33, 184 – Spend by SGS category – Spend by SGS supra-region 2-7 Employees Page 176 Information regarding the total number of non-guaranteed hours employees, full-time employees and part-time employees including its breakdown by gender and by region is not disclosed. – Number of employees at year end (# of employees) – Permanent workers (as a % of total employees) – Casual workers (as a % of total employees) 2-9 Governance structure and composition Pages 30-51 2-10 Nomination and selection of the highest governance body Page 34 2-11 Chair of the highest governance body Page 35 2-12 Role of the highest governance body in overseeing the management of impacts Page 39 2-13 Delegation of responsibility for managing impacts Page 39 2-14 Role of the highest governance body in sustainability reporting Page 39 2-15 Conflicts of interest Page 38 2-16 Communication of critical concerns Page 174 and 182-183 – Total number of substantiated breaches of the Code of Integrity received through integrity helplines and broken down by type of breach – Total number of integrity issues reported through integrity helplines 2-17 Collective knowledge of the highest governance body Page 155 2-18 Evaluation of the performance of the highest governance body Page 38 2-19 Remuneration policies Pages 52-79 2-20 Process to determine remuneration Pages 52-79 2-21 Annual total compensation ratio Pages 52-79 and 179 – CEO and mean employee compensation ratio 2-22 Statement on sustainable development strategy Pages 3-5 2-23 Policy commitments Page 11, 168, 172-173, 182-183 2-24 Embedding policy commitments Page 11, 168, 172-173, 182-183 2-25 Processes to remediate negative impacts Pages 163-168 and 174 2-26 Mechanisms for seeking advice and raising concerns Pages 174 and 182 2-27 Compliance with laws and regulations As indicated in our Code of Integrity, SGS complies with applicable laws in the countries where it does business. During 2024 the SGS Group was not condemned to any significant fines or penalties for non-compliance with any kind of laws and regulations. 2-28 Membership associations Pages 26 and 184 – Payments to trade associations or tax-exempt groups 189 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information GRI standard and disclosure Reference Reported performance Assurance 2-29 Approach to stakeholder engagement Pages 157, 177 and 185 – Customer satisfaction score (as a % score) – Engagement index 2-30 Collective bargaining agreements Pages 173 and 180 – Percentage of employees covered by collective bargaining GRI 3: Material Topics 2021 3-1 Process to determine material topics Pages 158-162 3-2 List of material topics Pages 158-162 3-3 Management of material topics Pages 158-162 GRI 201: Economic Performance 2016 3-3 Management of material topics Pages 82-85 201-1 Direct economic value generated and distributed – Total economic value generated: CHF 6 828 M (Revenue: CHF 6 794 M; Financial and other income: CHF 34 M) – Total economic value distributed: CHF 6 840 M (Salaries and wages: CHF 3 427 M; Subcontractors’ expenses: CHF 414 M; Depreciation, amortization and impairment: CHF 476 M; Other operating expenses: CHF 1 534 M; Financial expenses: CHF 94 M; Dividends paid (expected): CHF 634 M; Income taxes CHF 222 Mio; Other taxes: CHF 38 M; Community contributions and charitable donations: CHF 1 M) – Total economic value retained: CHF -12 M – Total economic value generated – Total economic value distributed – Total economic value retained 201-2 Financial implications and other risks and opportunities due to climate change Pages 165-168 201-3 Defined benefit plan obligations and other retirement plans Page 93-94 Only qualitative information is disclosed. 201-4 Financial assistance received from government SGS does not receive any significant financial assistance from governments, but we benefit from incentives in the form of grants from certain government schemes, such as energy- saving incentives. However, these benefits are of low value. This information is based on our global information gathering system. We are not aware of any significant incentives granted by governments or any financial aid granted to political parties at local level during 2024. GRI 202: Market Presence 2016 3-3 Management of material topics Page 172-173 202-1 Ratios of standard entry level wage by gender compared to local minimum wage The quantitative information breakdown is unavailable. We are currently evaluating alternative reporting options and expect to report in coming years. GRI 204: Procurement Practices 2016 3-3 Management of material topics Page 183 204-1 Proportion of spending on local suppliers Page 184 – Number of local suppliers (as a % of total suppliers) – Number of global suppliers (as a % of total suppliers) – Spend of local suppliers (as a % of total spend) – Spend of global suppliers (as a % of total spend) GRI 205: Anti-corruption 2016 3-3 Management of material topics Pages 182-183 205-1 Operations assessed for risks related to corruption Our non-financial macro risk assessment model analyzes economic, political, social and environmental risks across 220 geographies and includes our own employees, suppliers, indigenous people, migrant labor and local communities. The analysis of economic and political risks includes the following categories: government instability, policy instability, state failure, recession, inflation, currency depreciation, capital transfer, sovereign default, under-development, tax issues, corruption, infrastructural disruption, energy security, cybersecurity commitment, data protection and regulatory. Our most recent risk assessment was performed in 2022 and externally assured by PwC. The results of that assessment resulted in the following risk exposure: – Direct operations (as a % of sales): Low 58%; Medium 40%; High 2% – Supply chain (as a % of spend): Low 59%; Medium 40%; High 1% 190 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information GRI standard and disclosure Reference Reported performance Assurance 205-2 Communication and training about anti-corruption policies and procedures Pages 182-183 Breakdown by gender and employee category is not reported. – Percentage of employees trained to the Code of Integrity 205-3 Confirmed incidents of corruption and actions taken Page 183 In 2024, there were no public legal cases regarding corruption brought against the organization or its employees. – Number and nature of confirmed incidents of corruption identified through corporate helplines GRI 206: Anti-competitive Behavior 2016 3-3 Management of material topics We are committed to using competitive and fair practices. As such, we do not engage in any understandings or agreements that may improperly influence markets, or discuss pricing, competitive bid processes, contractual terms, division of territories or customer and market allocations with competitors. We do not make disparaging or untruthful allegations regarding competitors, or endeavor to obtain confidential information about them using illegal or unethical means. Finally, our services and capabilities are never advertised in any way that could appear to be deceptive or misleading. We provide customers with detailed quotes and invoices so that they are informed about every aspect of our service, including pricing. Our Global Pricing Initiative, developed through expert review of pricing practices across the Group, ensures robust pricing processes and governance. 206-1 Legal actions for anti-competitive behavior, anti-trust, and monopoly practices In 2024, we did not identify any legal actions related to anticompetitive behavior, antitrust and monopoly practices. This information is based on our global information gathering system based on incidents reported via the SGS integrity helplines. We are not aware of any significant incidents of this type at a local level during 2024. – Number of legal actions pending or completed during the reporting period regarding anti-competitive behavior and violations of anti-trust and monopoly legislation in which the organization has been identified as a participant GRI 207: Tax 2019 3-3 Management of material topics Pages 100-101 GRI 302: Energy 2016 3-3 Management of material topics Pages 163-165 302-1 Energy consumption within the organization Pages 163-165, 169 The information reported is limited to the total fuel and the total electricity consumption broken down by renewable and non-renewable electricity. – Total energy consumption (MWh) – Total energy consumption by use (MWh) – Vehicle fuels energy (MWh) – Non-transport fuels energy (MWh) – Total electricity (MWh) – Standard electricity (MWh) – Renewable electricity (MWh) – Total energy production (MWh) – Non-renewable energy production (MWh) – Renewable energy production (MWh) – Total renewable electricity (As % of total electricity consumption) 302-3 Energy intensity Pages 163-165, 169 – Energy intensity per revenue (MWh/CHF million) – Energy intensity per FTE (MWh/FTE) 302-4 Reduction of energy consumption Page 169 Compared to 2023, our energy consumption has remained stable in 2024 (-0.04%). GRI 303: Water and Effluents 2018 3-3 Management of material topics Page 171 303-5 Water consumption Page 171 GRI 304: Biodiversity 2016 3-3 Management of material topics Not applicable. Being a service based company, SGS does not have a significant impact on biodiversity. GRI 305: Emissions 2016 3-3 Management of material topics Page 163 305-1 Direct (Scope 1) GHG emissions Page 170 – Gross Scope 1 GHG emissions (tCO2e) 305-2 Energy indirect (Scope 2) GHG emissions Page 170 – Gross location-based Scope 2 GHG emissions (tCO2e) – Gross market-based Scope 2 GHG emissions3 (tCO2e) 191 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information GRI standard and disclosure Reference Reported performance Assurance 305-3 Other indirect (Scope 3) GHG emissions Page 170 – Total Gross indirect (Scope 3) GHG emissions (tCO2e) – Purchased goods and services – Capital goods – Fuel and energy related activities (not included in Scope 1 and Scope 2) – Waste generated in operations – Business travel – Employee commuting 305-4 GHG emissions intensity Page 170 – Scope 1+2 intensity per sales market based (CO2e tons/CHF million) – Scope 1+2 intensity per FTE market based (CO2e tons/FTE) – Scope 3 intensity per sales (CO2e tons/CHF million) 305-5 Reduction of GHG emissions Page 170 – Scope 1+2 emissions variation – Scope 3 emissions variation GRI 306: Waste 2020 3-3 Management of material topics Page 171 306-3 (2020) Water generated Page 171 306-3 (2016) Significant spills Page 171 – Environmental incidents (as # of environmental incidents including significant spills) 306-4 Waste diverted from disposal Page 171 GRI 308: Supplier Environmental Assessment 2016 3-3 Management of material topics Page 183 308-2 Negative environmental impacts in the supply chain and actions taken Page 183 The information reported is limited to the number of suppliers assessed for environmental impacts. Our most recent risk assessment was performed in 2022 and externally assured by PwC. GRI 401: Employment 2016 3-3 Management of material topics Pages 172-175 401-1 New employee hires and employee turnover Page 178 Information not broken down by region. – New hires (# of employees) – Total number of employees who left the Company during the year – Voluntary turnover (as a % of permanent employees) – Total turnover by gender (as a % of total permanent employees) 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees We offer benefits such as healthcare plans and occupational pension plans to our employees considering their type of contract, in accordance with local market practices. 401-3 Parental leave Many of our affiliates provide paid maternity and paternity leave in excess of legally required minimum. For example, SGS in Switzerland offers 16 weeks of maternity leave paid at 100%. SGS in Australia offers 8 weeks of paid maternity leave in excess of the local legally required minimums and SGS in South Africa, offers 5 paid days while local regulation provides 3 paid days. We also provide different childcare facilities in many of our affiliates. Some of our offices count with special rooms equipped with armchairs and freezers dedicated to breastfeeding. We also offer our employees the possibility of flexible working arrangements such as flexible check-in and checkout, remote or part-time working to promote worklife balance. No quantitative information available. GRI 402: Labor/Management Relations 2016 3-3 Management of material topics We strictly adhere to tariff structures and arrangements negotiated with trade unions, while we also inform and consult employees on relevant business activities. We respect statutory minimum notice periods and give reasonable notice of any significant operational changes in line with local practices and labor markets. Our affiliates’ communication and consultation processes are tailored to local needs. Organizational changes and relevant events that occur are formally communicated in compliance with the different regulations that apply both globally and locally as well as, when applicable, in accordance with what is established in the collective bargaining agreements of the Group’s companies. 402-1 Minimum notice periods regarding operational changes 192 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information GRI standard and disclosure Reference Reported performance Assurance GRI 403: Occupational Health and Safety 2018 3-3 Management of material topics Pages 173-175 403-1 Occupational health and safety management system Page 173 403-2 Hazard identification, risk assessment, and incident investigation Page 173 403-3 Occupational health services Page 173 403-4 Worker participation, consultation, and communication on occupational health and safety Page 173 403-5 Worker training on occupational health and safety Page 175 403-6 Promotion of worker health Page 175 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Pages 173-175 403-8 Workers covered by an occupational health and safety management system Page 180 – FTE covered by ISO 45001 standard (number of FTE) 403-9 Work-related injuries Page 180 – Total Recordable Incident Rate (TRIR) (occurrences per 200 000) – Lost Time Incident Rate (LTIR) (occurrences per 200 000) – Sickness absence rate (as a % of days of sickness absence per total days worked) – Total absence rate (as a % of days of sickness absence plus days lost per incidents with lost time per total days worked) 403-10 Work-related ill health Page 180 Information not broken down by gender and employee category. – The number of fatalities as a result of work-related ill health GRI 404: Training and Education 2016 3-3 Management of material topics Page 174 404-1 Average hours of training per year per employee Page 179 Information not broken down by gender and employee category. – Training ratio (As a % of total employment cost spent on training) – Percentage of employees trained on the Code of Integrity. – H&S training hours – % rate of completion of the data protection and privacy (e-learning) 404-2 Programs for upgrading employee skills and transition assistance programs Page 174 404-3 Percentage of employees receiving regular performance and career development reviews Page 179 – Performance reviews (as a % of employees eligible to performance review) GRI 405: Diversity and Equal Opportunity 2016 3-3 Management of material topics Page 175 405-1 Diversity of governance bodies and employees Pages 35-37, 42-43 The Board of Directors is composed of 8 members (5 men and 3 women) The Executive Committee is composed of 13 members (11 men and 2 women) – Percentage of employees by gender – Percentage of managers by gender – Percentage of women in leadership positions (CEO-3) – Diversity on the Board and Executive Committee by gender, nationality and age 405-2 Ratio of basic salary and remuneration of women to men Page 179 193 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information GRI standard and disclosure Reference Reported performance Assurance GRI 406: Non-discrimination 2016 3-3 Management of material topics Pages 172-173 406-1 Incidents of discrimination and corrective actions taken Page 183 – Total number of proven incidents of discrimination GRI 407: Freedom of Association and Collective Bargaining 2016 3-3 Management of material topics Page 173 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk Our most recent risk assessment was performed in 2022 and externally assured by PwC. GRI 408: Child Labor 2016 3-3 Management of material topics Page 173 408-1 Operations and suppliers at significant risk for incidents of child labor Our most recent risk assessment was performed in 2022 and externally assured by PwC. GRI 409: Forced or Compulsory Labor 2016 3-3 Management of material topics Page 173 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor Our most recent risk assessment was performed in 2022 and externally assured by PwC. GRI 413: Local Communities 2016 3-3 Management of material topics Page 181 413-1 Operations with local community engagement, impact assessments, and development programs Page 181 We have implemented such programs in 50% of our affiliates. – Investment in community (CHF thousands) – Total community projects (# of projects) – Community hours (# of hours dedicated to community) GRI 414: Supplier Social Assessment 2016 3-3 Management of material topics Page 183 414-2 Negative social impacts in the supply chain and actions taken Page 183 The information reported is limited to the number of suppliers assessed for social impacts. Our most recent risk assessment was performed in 2022 and externally assured by PwC. GRI 415: Public Policy 2016 3-3 Management of material topics Page 184 415-1 Political contributions Page 184 – Contributions to local, regional or national political campaigns, organizations or candidates (CHF) GRI 417: Marketing and Labeling 2016 3-3 Management of material topics We provide customers with detailed quotes and invoices so that they are informed about every aspect of our service, including pricing. Our Global Pricing Initiative, developed through expert review of pricing practices across the Group, ensures robust pricing processes and governance. 417-2 Incidents of non-compliance concerning product and service information and labeling In 2024, we were not issued with any significant fines or penalties for non-compliance with regulations concerning product and service information and labelling. – Total number of incidents of non- compliance with regulations and/or voluntary codes concerning product and service information and labeling. 417-3 Incidents of non-compliance concerning marketing communications In 2024, we were not issued with any significant fines or penalties for non-compliance with regulations concerning marketing communications. – Total number of incidents of non- compliance with regulations and/or voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship. GRI 418: Customer Privacy 2016 3-3 Management of material topics Page 187 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data Page 187 The total number of identified leaks, thefts, or losses of customer data is not reported. – Number of complaints received from outside parties and substantiated by the organization (# of complaints) – Substantiated complaints concerning breaches of data customer policy (# of complaints) – Number of complaints from regulatory bodies (# of complaints) 194 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.3. Sustainable Accounting Standards Board (SASB) framework alignment The following tables illustrate how the Company’s sustainability disclosures align with the SASB Disclosure Topics for the Professional & Commercial Services industry, and where specific information may be found. Topic Code Accounting metric Level of disclosure Page number(s) and/or URL(s) Data Security SV-PS-230a.1 Description of approach to identifying and addressing data security risks Disclosed Pages 185-187 SV-PS-230a.2 Description of policies and practices relating to collection, usage, and retention of customer information Disclosed Pages 185-187 See Privacy Policy at sgs.com SV-PS-230a.3 (1) Number of data breaches (2) Percentage involving customers’ confidential business information (CBI) or personally identifiable information (PII) (3) Number of customers affected Disclosed Page 187 Workforce Diversity & Engagement SV-PS-330a.1 Percentage of gender and racial/ethnic group representation for (1) Executive management, and (2) All other employees Disclosed Pages 35-37, 42-43 and 176 SV-PS-330a.2 (1) Voluntary, and (2) Involuntary turnover rate for employees Disclosed Page 178 SV-PS-330a.3 Employee engagement as a percentage Disclosed Page 177 Professional Integrity SV-PS-510a.1 Description of approach to ensuring professional integrity Disclosed Pages 182-183 See Code of Integrity at sgs.com SV-PS-510a.2 Total amount of monetary losses as a result of legal proceedings associated with professional integrity Disclosed In 2024, we were not issued with any significant fines or penalties for noncompliance with regulations associated with professional integrity Activity metrics Activity metric Code Level of disclosure Page number(s) and/or URL(s) Number of employees by: (1) Full-time and part-time (2) Temporary, and (3) Contract SV-PS-000.A Partial1 Page 176 Employee hours worked; percentage billable SV-PS-000.B Not available2 – 1. FTEs, number of employees and percentage of casual and permanent workers are disclosed. We are working on reporting the requested breakdown in future reports. 2. We are working on reporting these figures in future reports. 195 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 6.4 Non-financial matters required by article 964b of the Swiss Code of Obligations In compliance with the new Swiss rules on non-financial reporting (article 964b of the Swiss Code of Obligations), the Shareholders are invited to approve a report on non-financial matters. The Company publishes an integrated report, which covers a larger scope than what is strictly required by legislation. The vote of the shareholders is limited to the contents included in the following table. Requirement Sections in the Annual Report Page number(s) GRI Indicators Description of the business model Management Report: – How we create value Pages 8 to 11 GRI 2-6 Description of the policies adopted in relation to the relevant matters and measures taken to implement these policies Environmental matters Non-Financial Statements: – 2. Environmental topics Pages 163-168 GRI 3-3 (Energy and Emissions) GRI 302-1, 303-3, 303-4, 305-1, 305-2, 305-3, 305-4, 305-5 Social and employee- related issues Non-Financial Statements: – Management of relationships with suppliers and sustainable supply chain – Community donations Pages 183, 185 GRI 3-3 (Procurement practices and Local communities) GRI 204-1, 413-1 Respect for human rights Non-Financial Statements: – Policies related to own workforce – Processes for engaging with own workers and workers’ representatives about impacts – Processes to remediate negative impacts and channels for own workers to raise concerns – Taking action on material impacts on own workforce Pages 172-175 GRI 3-3 (Employment, Occupational Health and Safety, Training and Education) GRI 401-1, 403-1, 403-2, 403-3, 403-4, 403-6, 403-7, 404-1, 404-3 Combating corruption Non-Financial Statements: – Business conduct policies and corporate culture – Prevention and detection of corruption and bribery Pages 182-183 GRI 3-3 (Anti-corruption) GRI 205-2, 205-3 Description of the main risks related to the relevant matters and how the undertaking is dealing with these risks Non-Financial Statements: – 1.5 Impacts, risks and opportunities Pages 158-162 GRI 3-1, 3-2, 3-3 Main performance indicators Non-Financial Statements: – 2.2 Metrics and targets – 3.3 Metrics and targets – 4.3 Metrics and targets – 5.1. Customer relationship and satisfaction Pages 169, 170, 176-181, 183-186 GRI 302-1, 303-3, 303-4, 305-1, 305-2, 305-3, 305-4, 305-5, 403-8, 403-9, 403-10, 404-1, 404-3, 405-1, 406-1 References to national, European or international regulations Non-Financial Statements: – 6.2. GRI – 6.3. Sustainable Accounting Standards Board (SASB) framework alignment Page 155 N/A Coverage of subsidiaries Non-Financial Statements: – 1.1. General basis for preparation of the sustainability statement Page 154 GRI 2-2 196 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, 1211 Genève 2, Switzerland Téléphone: +41 58 792 91 00, www.pwc.ch PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity. Independent practitioner’s limited assurance report On 2024 selected sustainability indicators presented in the non-financial statements section of the 2024 Integrated Annual Report to the Board of Directors of SGS SA Geneva We have been engaged by the Board of Directors to perform assurance procedures to provide limited assurance on the 2024 selected sustainability indicators (including the GHG statement) as well as on the selected Non-Financial matters 2024 required by article 964b of the Swiss Code of Obligations applying article 964b paragraph 3 CO (referred to hereafter Non-financial Matters 2024) presented in the non-financial statements section of the 2024 Integrated Annual Report of SGS SA (hereafter the ‘Report’) for the period ended 31 December 2024. Our limited assurance engagement focused on 2024 selected sustainability indicators as presented in the 2024 GRI Content Index of the Report on pages 189 to 194 as well as in the selected Non-Financial matters table of the report on page 196 as marked with the check mark (hereafter the ‘Subject Matters’). We do not comment on, nor conclude on any prospective or retrospective information nor did we perform any assurance procedures on the information other than those marked with the check mark for the reporting period 2024, accordingly we provide no assurance on other information. The Subject Matters in the Report were prepared by the Board of Directors of SGS based on the criteria disclosed on page 154 in the section ‘General basis for preparation of the sustainability statement’ defining those procedures, by which the related sustainability indicators are internally gathered, collated and aggregated. Further, this section describes and defines the principles, processes as well as data collection and reporting. The section ‘General basis for preparation of the sustainability statement’ and the document ‘Basis of reporting’ have been developed using, among others, the GRI Sustainability Reporting Standards (GRI Standards) published by the Global Reporting Initiative (GRI), Version 2021 and the GHG Protocol Corporate Accounting and Reporting Standard, Corporate Standard, Revised edition (GHG Protocol Standard) as well as the Swiss Code of Obligations applying article 964b paragraph 3 CO. We evaluated the Subject Matters against the GRI Standards and the GHG Protocol Standard (‘reporting Criteria’). Inherent limitations The accuracy and completeness of the sustainability indicators presented in the non-financial statements section of the Report are subject to inherent limitations given their nature and methods for determining, calculating and estimating such data. In addition, the quantification of the sustainability indicators (including the GHG statement) is subject to inherent uncertainty because of incomplete scientific knowledge used to determine factors related to the sustainability indicators presented in the non-financial statements section of the Report and the values needed to combine e.g. emissions of different gases. Our assurance report will therefore have to be read in connection with reporting criteria, its definitions and procedures in the document ‘Basis of Reporting’ document presented on SGS SA’s website. 197 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 2 SGS SA | Independent practitioner’s limited assurance report Board of Directors’ responsibility The Board of Directors of SGS SA is responsible for preparing and presenting the sustainability indicators (including the GHG statement) presented in the non-financial statements section of Report in accordance with criteria disclosed. This responsibility includes the design, implementation and maintenance of the internal control system related to the preparation and presentation of the sustainability indicators (including the GHG statement) presented in the non-financial statements section of the Report that are free from material misstatement, whether due to fraud or error. Furthermore, the Board of Directors is responsible for the selection and application of the sustainability indicators presented in the non-financial statements section of the Report and adequate record keeping. Independence and quality management We are independent of the SGS SA in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code). We have fulfilled our other ethical responsibilities in accordance with the IESBA Code, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. PricewaterhouseCoopers SA applies International Standard on Quality Management 1, which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Practitioner’s responsibility Our responsibility is to perform a limited assurance engagement and to express a limited assurance conclusion on the Subject Matters as marked with the check mark . We conducted our engagement in accordance with the International Standard on Assurance Engagements (ISAE) 3000 (Revised) ‘Assurance engagements other than audits or reviews of historical financial information’ and the International Standard on Assurance Engagements 3410, Assurance Engagements on Greenhouse Gas Statements (‘ISAE 3410’), issued by the International Auditing and Assurance Standards Board. Those standards require that we plan and perform our procedures to obtain limited assurance whether anything has come to our attention that causes us to believe that the Subject Matters of the 2024 Report were not prepared, in all material aspects, in accordance with reporting criteria. Based on risk and materiality considerations, we performed our procedures to obtain sufficient and appropriate assurance evidence. The procedures selected depend on the assurance practitioner’s judgement. A limited assurance engagement under ISAE 3000 (Revised)ISAE 3410 is substantially less in scope than a reasonable assurance engagement in relation to both the risk assessment procedures, including an understanding of internal control, and the procedures performed in response to the assessed risks. Consequently, the nature, timing and extent of procedures for gathering sufficient appropriate evidence are deliberately limited relative to a reasonable assurance engagement and therefore less assurance is obtained with a limited assurance engagement than for a reasonable assurance engagement. We performed the following procedures: • Assessment of the section ‘General basis for preparation of the sustainability statement’ in the Report and the ‘Basis of Reporting’ document presented on the SGS SA’s website and observing the application, including the reporting criteria to determine whether they are appropriate when applied in relation to the disclosures and indicators; • Interviewing SGS representatives at Group and country level in China, United States of America, France, Taiwan, Canada, Belgium, Australia, India, Colombia, Germany, South Africa and Chile responsible for the data collection and reporting; • Inquiries of personnel involved in the preparation of the Report regarding the preparation process, the internal control system relating to this process and Subject Matters in the Report; • Inspecting the relevant documentation on a sample basis; • Performing tests of details on a sample basis as evidence supporting the Subject Matters concerning completeness, accuracy, adequacy and consistency. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. 198 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information 3 SGS SA | Independent practitioner’s limited assurance report Conclusion Based on the work we performed, nothing has come to our attention that causes us to believe that the 2024 selected sustainability indicators (including the GHG statement) presented in 2024 GRI content index on page 189 to 194 as well as in the selected Non-financial matters table on page 196 in the non-financial statements section of the 2024 Integrated Annual Report of SGS SA for the period ended 31 December 2024 as marked with the check mark are not prepared, in all material respects, in accordance with the reporting Criteria . Intended users and purpose of the report This report is prepared for, and only for, the Board of Directors of SGS SA, and solely for the purpose of reporting to them on 2024 selected sustainability indicators (including the GHG Statement presented in as presented in the 2024 GRI Content Index as well as in the selected Non-financial matters required by article 964b of the Swiss Code of Obligations table of the Report as marked with the check mark and no other purpose. We do not, in giving our conclusion, accept or assume responsibility (legal or otherwise) or accept liability for, or in connection with, any other purpose for which our report including the conclusion may be used, or to any other person to whom our report is shown or into whose hands it may come, and no other persons shall be entitled to rely on our conclusion. We permit the disclosure of our report, in full only and in combination with the reporting Criteria, to enable the Board of Directors to demonstrate that they have discharged their governance responsibilities by commissioning an independent assurance report over the 2024 selected sustainability indicators (including the GHG statement) as presented in the 2024 GRI Content Index as well as in the selected Non-financial matters required by article 964b of the Swiss Code of Obligations table of the Report as marked with the check mark without assuming or accepting any responsibility or liability to any third parties on our part. To the fullest extent permitted by law, we will not accept or assume responsibility to anyone other than the Board of Directors of SGS SA for our work or this report. PricewaterhouseCoopers SA Guillaume Nayet Brendon Dawson Geneva, 10 February 2025 ‘The maintenance and integrity of SGS SA’s website and its content are the responsibility of the Board of Directors; the work carried out by the assurance provider does not involve consideration of the maintenance and integrity of the SGS SA’s website, accordingly, the assurance providers accept no responsibility for any changes that may have occurred to the reported 2024 selected sustainability indicators presented in the non-financial statements section of the 2024 Integrated Annual Report (including the GHG statement) or 2024 selected sustainability indicators as well as in the selected Non-financial matters required by article 964b of Swiss Code of Obligation table presented in the non-financial statements section of the 2024 Integrated Annual Report since they were initially presented on the website. 199 SGS | 2024 Integrated Report Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information Key dates and events 26 March 2025 Annual General Meeting of Shareholders (Geneva) 24 April 2025 Q1 2025 sales update (Virtual) 25 July 2025 Half year 2025 results (Virtual) 23 October 2025 Q3 2025 sales update (Virtual) 11 February 2026 Full year 2025 results (Zürich) Stock listing information Stock exchange trading SIX Swiss Exchange Common stock symbols Bloomberg: SGSN.SW Reuters: SGSN.S Telekurs: SGSN ISIN: CH0002497458 Swiss security number: 249745 Key contacts Investor relations Ariel Bauer Head of Communications, Investor Relations & Sustainability t +41 (0)79 863 49 23 Livia Baratta Director, Investor Relations t +41 (0)79 586 48 53 Project management John Coolican Communications Beatriz Cebrián López Sustainability SGS SA 1 Place des Alpes P.O. Box 2152 CH – 1211 Geneva 1 t +41 (0)22 739 91 11 e sgs.investor.relations@sgs.com Shareholder information SGS | 2024 Integrated Report 200 Financial statements Corporate governance Remuneration report Management report Non-financial statements Shareholder information © SGS Société Générale de Surveillance SA. (2025) SGS Headquarters 1 Place des Alpes P.O. Box 2152 1211 Geneva 1 Switzerland sgs.com When you need to be sure