SGS Names New CEO, Plans Buyback After 2014 Profit Advances
(Bloomberg) — SGS SA, the world’s largest product inspection company, said Frankie Ng will replace Chief Executive Officer Christopher Kirk and announced a 750 million Swiss franc ($860 million) share buyback after 2014 profit advanced.
Ng, a Swiss and Chinese citizen who has led SGS’s industrial services unit for the last three years and started at the company 21 years ago, will take over the top job on March 12, Geneva-based SGS said today in a statement. Kirk, who served as CEO since 2006 and has been at the company for 34 years, will be proposed as a director.
Under Kirk’s leadership, SGS “experienced the most rapid growth in its history,” Chairman Sergio Marchionne said in the statement. “The company will continue to grow profitably and strengthen its position as industry leader.”
SGS is a gauge of the broader global economy as it sells verification services for industries ranging from automotive and commodities to medical devices in Europe, Africa, Asia and North America. The company said it expects revenue growth of 4 percent to 6 percent, excluding currency shifts and the potential negative impact of low oil prices and of reduced fishery activities in Latin America.
SGS said 2014 net income rose 4.8 percent to 629 million francs as the company’s mineral-services division continued to deal with the slowdown in the mining sector. That compares with the 627 million-franc consensus estimate of analysts polled by Bloomberg.
SGS says it has “limited” exposure to the Swiss franc after the Swiss National Bank’s surprise decision last week to lift the cap on the franc against the euro. Current exchange rates would have reduced 2014 sales by 600 million francs and would have cut 100 million francs from adjusted operating profit.
The company’s shares have declined 14 percent this year. SGS proposed a dividend of 68 francs per share, an increase of 4.6 percent.
To contact the reporter on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Thomas Mulier, Dylan Griffiths
