Morningstar | SGS in Prime Position to Benefit From Structural Growth Drivers
SGS is the largest company globally in the testing, inspection, and certification sector, with global operations servicing a variety of sectors. The TIC market is highly fragmented, with many local or regional players that lack the capabilities to operate across multiple industries and geographies; as such, they struggle to successfully service the needs of multinational companies. SGS' scale allows the company to leverage its network of industry experts and testing sites to offer a broad service and bid for large multiyear contracts.Founded in 1878, SGS is one of the oldest firms in the TIC space. Over its long history, the firm has amassed thousands of operating licences, government authorisations, and accreditations. These pose a significant barrier to entry for competitors, as licences can be costly and require considerable time and resources to obtain. As the industry leader, SGS is in a prime position to benefit from several structural growth drivers. First, increasingly sophisticated products, such as wearable tech, often require a high degree of testing expertise, for which vendors can command premium fees. In addition, the proliferation of global brands increases the need for brand protection, leading to greater scrutiny of supply chains and quality, health and safety, and environmental systems. Finally, government agencies and the private sector continue to outsource noncore functions, a benefit to independent providers of highly technical testing and supply-chain management activities.SGS is engaged in the provision of inspection, verification, testing, certification and quality assurance services. Co.'s business lines include: Agricultural; Minerals; Oil, Gas & Chemicals; Life Science; Consumer Testing; Systems & Services Certification; Industrial; Environmental; Automotive; and Governments & Institutions. As of Dec 31 2014, Co.'s geographic operations were organized as follows: Europe, Africa, Middle East (Western Europe, Northern and Central Europe, Southern Central Europe, Eastern Europe & Middle East, and Africa); Americas (North America, and South America); and Asia Pacific (East Asia, China & Hong Kong, and South Eastern Asia & Pacific).
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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