November 7, 2019 / 6:40 AM / 15 days ago

REFILE-Swiss SGS targets at least steady dividend in 2020

(Corrects typographical error in first paragraph)

ZURICH, Nov 7 (Reuters) - Swiss inspections group SGS aims to keep its dividend at least steady next year, the Geneva-based company said on Thursday as it focuses on cost savings to defend margins.

“Considering the organic growth in 2019, we now expect solid organic growth for the 2020 plan,” SGS said, expressing confidence it could generate a mid-single-digit organic growth rate in the near term while accelerating mergers and acquisitions.

Its 2020 guidance saw an adjusted operating income margin of above 17%, aiming at “at least maintaining the dividend or grow it in line with the improvement in adjusted net earnings”.

Growth in the second half of 2019 has been hit by challenging macroeconomic trends, as well as continued softness of some businesses and the discontinuation of some low-return contracts, SGS said.

“We now expect H2 2019 organic growth to be low single-digit,” the company said, but reiterated its 2019 guidance for a higher adjusted operating income margin on a constant currency basis. (Reporting by Michael Shields)

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