SGS SA reported a profit for its full year that increased from last year. The company's bottom line came in at CHF581 million, or CHF3.10 per share. This compares with CHF553 million, or CHF3.00 per share, last year. The company's revenue for the period rose 2.6% to CHF6.794 billion from CHF6.622 billion last year. The Board will recommend an optional scrip dividend of CHF 3.20 per share to the Annual General Meeting, which is to be held on March 26. SGS achieved sales of CHF 6.03 billion in ‘Testing & Inspection’, by far its largest business division. Organic growth amounted to 7.6 per cent, with all segments of the business unit contributing to growth. The adjusted operating profit margin was 14.7 per cent. The Business Assurance division achieved sales of CHF 761 million. Organic growth amounted to 6.2 per cent. This was due to double-digit growth in the certification segment. In contrast, the high comparative basis in the Consulting segment slowed growth slightly. The business unit's adjusted EBIT margin was 20.1 per cent. Overall, SGS thus met analysts' expectations. Although sales and organic growth fell marginally short of expectations, adjusted EBIT and the corresponding margin slightly exceeded them. For the current year, SGS expects growth and an improvement in profitability within the target corridor until 2027, with organic sales growth of 5 to 7 per cent. Acquisitions are expected to contribute an additional 1 to 2 per cent to growth. At the same time, the product testing group aims to become even more profitable. The following still applies: the operating margin should improve by at least 1.5 percentage points by 2027 compared to 2023.

The Swiss stock market closed slightly higher on Monday. The SMI gained 0.3 per cent to 12,628 points. Among the 20 SMI stocks, there were 15 price gainers and five price losers. A total of 16.46 (previously: 19.56) million shares were traded. In the pharmaceuticals sector, Roche (+0.6%) and Novartis (+0.1%) rose slightly, with investors in Switzerland also reacting relatively calmly to the tariff threats. Sandoz even gained 1.1 per cent. According to Vontobel, demand for some luxury brands remains strong despite industry problems, and European luxury companies could counter potential US tariffs with price increases. Richemont closed 0.5 per cent firmer, while Swatch lost 0.6 per cent following a negative comment from Berenberg. Prior to the publication of its figures, the shares of commodity testing group SGS jumped 2.3 per cent. Adecco (-0.5 per cent) was downgraded by Deutsche Bank. Citi lowered Julius Baer's share price, which stagnated.

Europe
The European stock markets closed higher on Monday, as investors played down the threats made at the weekend by US President Donald Trump to raise tariffs by a further 25% on steel and aluminium imports into the United States. The Stoxx Europe 600 index gained 0.6% to 545.9 points. In Paris, the CAC 40 and SBF 120 both climbed 0.4%. The DAX 40 advanced by 0.6% in Frankfurt, while the FTSE 100 rose by 0.8% in London. ARCELORMITTAL (-0.6%): the steelmaker was penalised by the threat of new tariffs on steel and aluminium imports into the United States. Gaztransport et Technigaz or GTT (-4%): the cryogenic membrane manufacturer announced the resignation of its CEO, Jean-Baptiste Choimet, amid difficulties at Elogen, the cryogenic membrane manufacturer's subsidiary dedicated to the production of green hydrogen. BP (+7.4% in London): activist fund Elliott Management has taken a stake in BP and will push for reforms to improve the British oil major's performance, the Wall Street Journal reported, citing sources close to the matter.

United States
U.S. stocks rose Monday as investors shrugged off the risk that President Trump’s planned steel and aluminum tariffs could ignite a trade war. The Nasdaq Composite gained 1%, leading major indexes. The S&P 500 climbed 0.7%, while the Dow Jones Industrial Average added 0.4%. Steelmaker stocks were among the biggest winners after Trump said over the weekend that he would impose 25% tariffs on steel and aluminum imports and hinted at reciprocal import duties against U.S. trading partners. U.S. Steel advanced 4.8%, while Alcoa rose 2.2%. Most-active Midwest U.S. steel futures jumped nearly 6% to settle at their highest level since April. In currency markets, the U.S. dollar strengthened against the Mexican peso, the Japanese yen and the Canadian dollar. Canada is the biggest exporter of steel and aluminum to the U.S. Gold extended its record-setting rally, with front-month futures rising 1.6% to settle at $2,914.30 a troy ounce. The precious metal has benefited from purchasing by central banks and investors, as well as its status as a perceived haven from global distress. Broadly, though, global markets were calm. Tariff fatigue might be part of the explanation. After Trump’s zigzags over tariffs on Canada, Mexico and Colombia in recent weeks, many investors think the president sees trade taxes as a negotiating tool. McDonald’s shares climbed 4.7% on the back of their latest earnings report, making it the best-performing stock in the Dow. Strength in the restaurant giant’s international business helped offset a decline in U.S. same-store sales. Other companies set to report results this week include Coca-Cola, CVS Health and brokerage Robinhood Markets. Of the S&P 500 members that reported their 2024 fourth-quarter results through Friday, 77% beat analysts’ earnings expectations, according to FactSet.

Asia
Asian stocks were mixed on Tuesday. After the gains at the start of the week, the trend in Hong Kong (-0.4%) and Shanghai (-0.1%) turned slightly weaker. In Seoul, on the other hand, the Kospi saw a more pronounced upward trend of 0.8 per cent. Among the individual stocks, Hanwha Aerospace surged by over 16 per cent in Seoul. The manufacturer of howitzers and aircraft engines presented strong business figures. The share price of its shipbuilding sister company Hanwha Ocean climbed by more than 9 per cent.

Bonds
Yields on U.S. government debt held to a tight range Monday despite President Donald Trump’s plan to impose 25% tariffs on imports of steel and aluminum, with investors looking ahead to a busy week of inflation data and congressional testimony by Federal Reserve Chair Jerome Powell. The 10-year Treasury note yield gained almost one basis point (0.01 percentage point) to 4.5%. The 2-year Treasury note yield dipped by 2 basis points to 4.29%.

Analysis
Bernstein upgrades Roche target to 345 (340) CHF/Outperform - Traders
Citi lowers Julius Baer target to Neutral (Buy) - Target CHF 60 (67)
Berenberg downgrades Swatch target to CHF 150 (160) - Sell

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