Corporate Report 2022
Dear reader
SQS can look back on a positive and eventful year. 2022 was a year of consolidation and new beginnings at the same time. Consolidation means "firming up" or "tightening up". First and foremost, the consolidation of earnings is a good sign. Due to a recertification cycle, we had recorded a particularly high turnover of CHF 47.0 million in 2021. In 2022, we again primarily conducted surveillance audits. The revenue of CHF 44.2m was therefore lower, but still above average for a recertification year. In addition, SQS was able to acquire over 500 new customers. This means that we are able to convince companies time and again with our value proposition.
We have consolidated and thus established the hybrid forms of work. Both auditors and customers are increasingly taking advantage of the flexibility and efficiency potential offered by virtual remote audits in combination with on-site audits, which are still crucial for customer benefit. Hybrid audits have become established after the pandemic. The same is true for the office staff, who make active use of the home office option.
Our successful reaccreditation by the Swiss Accreditation Service should also be seen as a consolidation and recognition of our efforts in the area of compliance. Without the constant commitment to improving structures, processes and instruments, we would not be at the current level as an accredited conformity assessment body. As a result, we have received renewed confirmation from an appointed body of what is one of our central messages: an ISO certificate from SQS is a guarantee of special quality and credibility!
In a dynamic environment, consolidation can also be a hindrance. That is why SQS is forward-looking: On the one hand, we would like to highlight the introduction of «Dynamics 365», which started in 2022. This ERP software represents an investment with great potential. The aim is to use digitalisation even more consistently and efficiently for our organisation and our customers. Furthermore, we have made important progress in the development of our product portfolio and our market presence in the area of sustainability.
Our projects for continuous improvement in the areas of corporate culture and communication, leadership, human resources and processes are also forward-looking. These are coordinated by the management with the participation of employees who bring the entire diversity of SQS to the table.
Consolidating the tried and tested and daring to try something new will remain our credo in the future. This task is timeless, but in 2022 we have tackled it anew and courageously - determined to continue on the path we have chosen. What better occasion for this than an anniversary year? In summer 2023 we celebrate the pioneering foundation of SQS 40 years ago.
We would like to express our sincere thanks to all employees for their commitment to SQS and to our customers.
Andrea Grisard
President
Felix Müller
CEO
President Andrea Grisard and CEO Felix Müller
Together, we continue to develop SQS in order to truly live up to the claim of a sustainably managed company.
Felix Müller, CEO
Delimitation
The SQS Corporate Report provides information on the economic, social and ecological dimensions of our actions. Its structure is based on the sustainability aspects of the Global Reporting Initiative (GRI). In addition to the office in Zollikofen (head office), the reporting also includes the Italian branch office in Milan. The subsidiary in Germany (SQS Deutschland GmbH) is currently not subject to auditing and is not shown in the value added data. Unless otherwise stated, all data refer to the calendar year 2022 and to the reporting date 31 December 2022 respectively.
Value creation
In the 2022 financial year, the turnover decreased from CHF 47.0 million to CHF 44.2 million compared to the previous year. The reason for this is cyclical: The year 2021 was characterised by a so-called recertification cycle, which led to particularly high turnover. In 2022, on the other hand, an exceptionally large number of maintenance audits took place. These generate lower revenues on average.
Significantly, 527 new customers and 213 cross-sells were recorded. This proves that SQS is always able to convince companies anew of its value proposition and sell additional products to existing customers. The benefits of integrated management systems, in which several standards are combined, are a central message of SQS marketing communication.
| Financial key figures | 2021 | 2022 |
| Turnover (CHF) | 47'003’435 | 44'198’161 |
| Operating expenses (CHF) | 45'664’016 | 43'044’170 |
| Personnel expenses (CHF) | 38'775’045 | 36'005’599 |
| EBITDA (CHF) | 1’339’419 | 1’153’991 |
| Profit (CHF) | 13’813 | 18’078 |
| Equity ratio | 51,3 % | 55,4 % |
| Asset coverage ratio I | 2,54 | 2,49 |
Note: The financial report covers the entire business activity of SQS, i.e. the head office in Zollikofen (Switzerland) and the branch office in Milan (Italy). The subsidiary SQS Deutschland GmbH with registered office in Konstanz is currently not subject to audit and is not part of the financial reporting.
«The successful re-accreditation has shown that we are balancing compliance and cost-effectiveness."
Silvio Genovese», Division Manager Products, Compliance and Accreditations
Core business with assessments in the accredited and non-accredited area
In 2022, SQS had over 100 products in its portfolio in the accredited and non-accredited area. This large number should not conceal the fact that a large proportion of sales was generated with three main standards in the accredited area: ISO 9001 (quality management), ISO 14001 (environmental management) and ISO 45001 (occupational health and safety). These are all the more important as they are often the starting point for the integration of further standards within the framework of integrated management systems for customers and thus a driver of cross-selling, where SQS can exploit the competitive advantage of its wide range of products.
The core business in the context of accreditation shapes SQS financially and culturally by demanding and promoting the following qualities in the company:
- a technical expertise that is able to link the accreditation requirements with the reality in individual sectors and companies;
- high reliability and credibility towards customers and the accreditation body;
- a pronounced practical orientation;
- long-term thinking and acting.
Against this background, it is all the more important that SQS was re-accredited by the Swiss Accreditation Service (SAS) in 2022 at the end of a five-year cycle. The decisive factor for this was that we had improved, with regard to compliance, our structures, processes and instruments in previous years. At the same time, we have further developed our management and IT system, enabling the management of numerous certification systems, harmonised working methods and thus synergies. This enables us to achieve a balance between compliance and effectiveness.
A setback occurred with regard to the approval of SQS Deutschland GmbH as a so-called Notified Body for medical devices. In dialogue with the German supervisory authority responsible for this, the Central Authority of the Federal States for Health Protection with regard to Drugs and Medical Devices, ZLG), it became apparent that the processes and methods applied in Switzerland would require considerable adaptation in order to meet the requirements in force in Germany - even though the normative bases are the same. This meant that SQS Deutschland GmbH would not receive approval until 2023 as intended.
Further information on accreditation in general and the accreditations as well as approvals of SQS can be found in the blog post «Accreditation: separating the wheat from the chaff | SQS». The Swiss Accreditation Service is by far the most important accreditor for SQS, ahead of the Italian Accredia.
New products and business areas
SQS is developing new products in the accredited and non-accredited area as well as a new business area with sustainable corporate management. In 2022, the most significant activities in this regard were:
Swiss IRIS Certificate
Since 2021, SQS has been running the International Railway Industry Standard (IRIS) - the main standard of the railway sector - under its own approval. This is intended to serve the local market even better. The 2022 audit of Stadler Rheintal AG in St. Margrethen on the basis of the IRIS Gold standard is an indication that this calculation is working. Around 2300 companies worldwide are certified according to IRIS. However, the Stadler Group subsidiary was only the fifth worldwide and the first in this country to be audited according to the highest performance level. One of the special requirements of IRIS Gold is that the auditing team must also meet higher standards and is monitored by the European Railway Industry Federation (UNIFE).
«The successful certification of Stadler Rheintal AG at the IRIS Gold Performance Level was a milestone for both the company and SQS.»
Fatih Haciismailogullari, Lead-Auditor for IRIS
Verification (auditing) of sustainability reports and supply chains
In its first financial year, SQS Deutschland GmbH built up a product portfolio in the area of verification (auditing) of sustainability reports and supply chains as well as a network of competent experts for this purpose. In addition, it started customer acquisition by means of marketing and communication and thus built up a good network.
Circular Globe
Together with Quality Austria, SQS launched the Circular Globe maturity model and label in 2021, which supports, assesses and - where appropriate - awards organisations on their way to the circular economy. In 2022, it was able to award the Circular Globe Label to two first organisations, the bag producer FREITAG and Implenia Real Estate Products, a division of the construction and real estate company Implenia. On the one hand, the cooperation with the two prominent customers confirmed the benefits and feasibility of the model and process. On the other hand, it was a milestone in the marketing of the product. To this end, 22 Circular Globe criteria catalogues were also sold by the end of the year.
esg2go
The tools established in the market for sustainability assessment and reporting are too complex and too expensive for most small and medium-sized enterprises (SMEs). At the same time, evidence of sustainability performance is increasingly demanded by SMEs as well. This is why the Center for Corporate Responsibility at the University of Zurich/University of Applied Sciences Fribourg has developed "esg2go" in collaboration with numerous SMEs. SQS became the development partner and preferred verification partner of esg2go in 2022. In addition, it offered training in sustainable business management and esg2go from the last quarter onwards, generating revenue in the mid five-digit range. Finally, SQS was able to conclude strategic partnerships with UBS and the industry association HotellerieSuisse to establish esg2go in the market.
«The evaluation and reporting tool esg2go has been in demand right from the start. As a development partner and preferred verification partner, we contribute to this success.»
Andri Bodmer, head of sub-division Marketing and Business Development
Training courses and seminars
SQS offered both on-site and online seminars in 2022. A total of 120 seminars were held, 20 of them directly at customers' premises (in-house seminars) and 100 public seminars. Of the latter, around 60 per cent were held as webinars. Compared to 2021, the increase in participant days was more than 20 per cent, and that in turnover more than 40 per cent. This generated revenues of more than CHF 1.0 million, thus reaching the level of the pre-pandemic period again.
The satisfaction of participants in the public seminars and webinars remained stable, with a strong increase in the number of responses.
| Key figures training area | 2020 | 2021 | 2022 |
| Turnover (CHF) | 674'362 | 760'176 | 1’024’120 |
| Number of public seminars | 70 | 89 | 100 |
| thereof webinars | 35 | 68 | 58 |
| Number of in-house seminars | 25 | 19 | 20 |
| thereof webinars | 4 | 1 | 11 |
| Number of participant days | 1317 | 1417 | 1722 |
| Satisfaction of the participants (public seminars in Switzerland)* | 4,5 | 4,7 | 4,5 |
* Grading scale: 1 (unusable) until 5 (very good)
Client structure
SQS's most important markets are Switzerland, Italy and Germany. Of the almost 9,000 clients, 67 per cent are based in Switzerland and 23 per cent in Italy. The remaining locations are mostly in Germany. International customers benefit from our global certification. Different locations are grouped together and certified according to a random sampling concept.
Our strong roots in our home market and our proximity to large, globally active companies give us a wide range of insights, knowledge and ultimately the competence to accompany our customers in their development in the best possible way. This competence has a broad impact because 94 percent of our customers in Switzerland are micro, small and medium-sized enterprises (SMEs). More than two thirds have 49 or fewer employees. Our clientele is a reflection of the open, dynamic and competitive Swiss economy.
On average, we serve our customers for more than twelve years, with 54 percent using our services for longer than nine years. Our customer relationships are characterised not only by their longevity and loyalty, but also by their breadth. Of our clients, a third have two or more SQS certificates. As cross-selling continued to be successful in 2022, these extensive customer relationships were further strengthened.
«The introduction of D365 is a milestone in the further development of our IT infrastructure. It is therefore all the more important to carry out a careful analysis and strategic conception beforehand.»
Diego Garigliano, D365- Project manager
Digitalisation
SQS IT is based on a hybrid infrastructure. Services are outsourced where economically viable and responsible in terms of security. The future SQS system architecture should be lean, agile and economically sustainable and minimise risks relating to data security and protection.
Against this background, we launched a project in 2022 to analyse, design and introduce MS Dynamics 365 as the successor software to Microsoft Dynamics AX. The introduction of MS D365 will enable us to drive the digitalisation of our company and to make the best possible use of the opportunities offered by the Microsoft ecosystem and cloud services in particular. In doing so, we are always guided by the idea that IT should be a central instrument for the further development of our organisation and the support of our employees.
Subsidiaries
SQS Deutschland GmbH had its first financial year in 2022. It was characterised by the following activities:
- Start-up of the offices in Constance (D) and build-up of the team with a managing director and two employees in the field of marketing and communication;
- Setting up a product portfolio for the verification of sustainability reports and supply chains as well as other services in the sustainability sector;
- Establishment of a team of external experts for the validation of sustainability reports;
- Marketing and communication for the purpose of customer acquisition in the sustainability sector;
- Procedure for the approval as Notified Body for medical devices by the Zentralstelle der Länder für Gesundheitsschutz bei Arzneimitteln und Medizinprodukten (ZLG).
The Liechtenstein Society for Quality Assurance Certificates (LQS) was founded as a pillar of SQS in the European Economic Area (EEA). Due to the foundation of SQS Deutschland GmbH, which enabled direct market access to the EU, LQS lost its importance and was dissolved in 2022. All customers of LQS were taken over by SQS.
SQS is also involved in around 30 associations, societies and other interest groups. As a member of SAQ Swiss Association for Quality and the Schweizerischen Normen-Vereinigung (SNV) SQS is well networked with quality experts and participates in standards committees.
Economic and political environment
SQS is legally a non-profit association and in fact an SME serving the Swiss economy. For this reason, it is committed on the one hand to business-friendly legal and political framework conditions through public affairs work and on the other hand through partner- and member organisations for products and services that benefit its customers.
Public affairs activities in 2022 focused in particular on
- clarity and stability in relations between Switzerland and the European Union (EU) in the field of medical devices;
- the mutual recognition by Switzerland and the EU of certifications in cross-border rail traffic;
- The inclusion of Conformity Assessment Bodies (CABs) as entities that can audit reports prepared by companies under the Due Diligence and Transparency Regulation on Minerals and Metals from Conflict Zones and Child Labour;
- The consideration of CABs as bodies that are generally recognised by the legislator when it comes to the regulated verification of sustainability reports or sustainability assessments of economic actors.
SQS is a founding member of IQNET, the largest global network of management system certification providers. A rigorous qualification process for members ensures that IQNET certificates enjoy a high reputation worldwide. This represents substantial added value for SQS customers operating globally.
In 2022, SQS was confirmed as a full IQNET member following a peer assessment by an international audit team. In the four-stage assessment, it was attested the highest or second-highest level of maturity with regard to all criteria. In addition, the auditors identified three best practices of SQS that are recommended to all IQNET members.
Supply chain
Due to the advancing digitalisation, SQS purchases products and services mainly in the ICT sector. In addition, it purchases services in the areas of mobility, accommodation, catering, building maintenance, event organisation, marketing, finance, legal advice and insurance. When selecting suppliers, SQS gives preference to its own customers wherever possible. In doing so, it relies on proven and long-standing collaborations.
Appreciation
Fairness is a form of appreciation - for example with regard to equal pay between men and women. The repetition of the equal pay analysis in accordance with the Gender Equality Act in 2022 confirmed the fundamentally equal pay. The analysis, which considers parameters such as function, length of service, training and further education, was verified by an external body (Klingler Consulting) and its result communicated internally.
Participation is another form of appreciation. As part of a project to position SQS in the market for sustainable corporate management, two workshops were therefore held to which employees from all departments, sectors and management levels were invited. This resulted in two follow-up processes. One deals with the sustainability positioning of SQS as a marketing and communication task (external orientation). The other deals with it as a task of organisational development (internal orientation). As part of the second process, four projects were defined on the basis of another broad-based workshop, which are intended to advance SQS in the areas of «Culture and Communication», «Leadership and Organisation», «Processes» and «Human Resources». Each project is assigned a team, which is led by a member of the management and consists of representatives from all management levels.
SQS recognises its employees in other ways. For example, all permanent auditors benefit from an average of 15 days of training and further education. New employees are intensively introduced to processes and systems so that they master their specialist area and modern auditing techniques. SQS has facilities to support employees in challenging situations, for example with external social coaching. In addition, the office offered two apprenticeships for a KV apprenticeship in 2022.
All these forms of appreciation were facilitated in 2022 by the fact that physical meetings were possible again after the pandemic. SQS employees were thus able to meet again in person on a larger scale in Bern for the Extended Auditors' Meeting and the Christmas Dinner of the Head Office, as well as on the occasion of the staff event in Interlaken and at the Giessbach Hotel.
«Equal pay between men and women is a matter of course for SQS. We are therefore pleased that it has been confirmed by an external body.»
Andrea Kammer, Head of HR/GL Secretariat
«With these projects, we have set ourselves the goal of successfully advancing the organisation – together as a team!»
Franziska Römer, Team Leader Customer Service Food and Packaging
Conditions of employment
The employees at the headquarters in Zollikofen work 42.5 hours per week on a flextime basis with a full workload. In the course of the Corona pandemic, we launched a home office concept, which remained in place even after the pandemic.
We offer our auditors an annual working time model so that they can deal with the fluctuations in workload during the year in a self-determined and flexible manner. All employees have the option of working part-time. They are entitled to at least five weeks of holiday per year - one week more than required by law. Employees under the age of 20 and over the age of 50 receive an additional five days off. Early retirement is possible from the age of 60.
Personnel structure
SQS employs 184 (incl. SQS DE) permanent and 304 freelance employees. The proportion of female permanent employees was 48 per cent. The freelance employees included 273 auditors and 31 technical experts. Since the end of 2020, the SQS Board has been made up of equal numbers of men and women.
The permanent auditors (including members of the Executive Board) ensure the management of the mandates as lead auditors. The other permanent employees work at the Head Office in Zollikofen and at the Branch Office in Milan. The permanent auditors are supported by freelancers who perform either lead or co-functions. For the auditing of specific standards, additional external experts are called in who have the necessary technical competence.
Pension fund
All permanent employees belonged to our pension fund at the end of 2022. We offer an attractive occupational pension plan in the extra-mandatory area, with benefits that are significantly above the statutory minimum. Our freelance employees are covered by their respective employers.
The capital of active insured persons was paid an interest rate of 1 per cent, while the conversion rate of the retirement assets was 5 per cent. The challenging investment year 2022 was characterised by volatile markets, rising interest rates and geopolitical tensions. Due to the negative investment return of -8.47%, our coverage ratio fell from 129.8% in the previous year to 117.2%.
As part of the asset management mandate, we commissioned an ESG sustainability rating for the second time for the 2022 financial year. ESG stands for environment, society and corporate governance. In addition, we defined business activities in which our pension fund foundation does not wish to invest for sustainability reasons. The reporting gave us a new perspective on the greenhouse gas emissions caused by our portfolio and the impact on other relevant sustainability aspects.
In summary, we can state that our pension fund is in a good position - even after a difficult year - with regard to the coverage ratio, the appropriate actuarial parameters and its accumulated reserves.
Value preservation
SQS sees its contribution to the preservation or regeneration of our natural foundations of life as a duty and a business opportunity. Since 2019, it has been working with the myclimate foundation to measure its ecological footprint. The corresponding results for the year 2022 can be read in the latest myclimate report and are summarised below.
SQS's footprint in 2022 was around 937 tonnes of CO2 equivalents. However, this does not represent an improvement on the 958 tonnes reported in the 2021 Corporate Report. The reason for this is an adjustment of the calculation method by the service provider Ecoinvent. According to the new calculation method, the footprint in 2021 had been around 843 tonnes of CO2 equivalents.
At COP 26 in Glasgow in autumn 2021, the replacement of the Kyoto Protocol by the Paris Agreement was concretised. This has far-reaching consequences for the mechanisms in the market with CO2 certificates (more information can be found here). This includes the fact that a designation as a "climate-neutral organisation" is no longer possible in the previous form.
Due to a fundamental evolution of our attitude and activities regarding sustainability as well as the changes mentioned above, we have decided to re-evaluate the way we contribute. The focus will be on local activities. We are currently evaluating different options and projects on how we can contribute to the reduction or bonding of greenhouse gases. Accordingly, we have discontinued the financing of the previous myClimate support project in Tanzania by means of CO2 certificates.
The business opportunity of the sustainable transformation of companies presents itself in two ways. On the one hand, SQS promotes sustainable corporate management with regard to economic (ISO 9001), ecological (ISO 14001) and social aspects (ISO 45001) with its core business - the testing and certification of the three main ISO standards. This effect unfolds precisely in the interaction of the three standards. In order to better communicate the contribution and potential of its core business to sustainable development internally and externally, SQS makes the Integrated Management System a central marketing term and -offering. On the other hand, it is investing in the development of new products on the subject of sustainability in the non-accredited sector (cf. the section on «new business fields»).
Mobility
SQS's mobility concept promotes low-emission business travel. A graduated flat-rate expense allowance motivates auditors to procure economical vehicles and thus reduce CO2 emissions. Those who do without a car and travel exclusively by public transport are reimbursed for the cost of a 1st class GA travelcard as well as for mobility and taxi use. SQS pays for the SBB half-fare travelcard for all permanent employees.
Due to the business model, business travel is still responsible for almost three quarters of our total CO2 emissions. Due to the removal of most pandemic-related restrictions, the mobility of auditors has generally increased again. Last year, our staff travelled over 1.5 million kilometres by land and half a million kilometres by air. About 20% of the emissions are accounted for by hotel stays during audits lasting several days.
The continuation of the home office concept introduced during the pandemic is proving very popular with staff at the office. On average, our employees work about 60% from home, which has greatly reduced commuting compared to the past. Emissions in this area have increased only marginally compared to the previous year, which can be explained by the increased number of employees in Zollikofen.
Also in 2022, numerous employees took part in the "Bike to work" initiative and thus not only avoided emissions but also did something good for their personal health.
Energy
Our energy consumption at the headquarters in Zollikofen has risen again slightly compared to the previous year, but is still about one fifth below the pre-pandemic level. This is also directly attributable to the home office concept.
Compared to 2021, electricity consumption at the office has increased by 12.5%. In addition to the high temperatures during the summer months, this is mainly due to the fact that employees were again allowed to come to work all year round. At the beginning of 2021, there had been a federally imposed home office obligation for several weeks. In addition, more seminars and internal training courses were held in Zollikofen again, which led to a sharp increase in the number of visitors compared to the previous year.
The photovoltaic system on the roof of our headquarters supplied 66.5 megawatt hours, which were directly fed into the grid and sold.
Further information
|
KPI |
Target 2022 |
Actual 2022 |
|
Finances |
||
|
F1 Turnover |
CHF 44'705’054 |
CHF 44'198’161 |
|
F2 EBITDA (Operating result I) |
CHF 1'999’909 |
CHF 1'153’991 |
|
F3 EBITDA-margin |
4,5% |
2,6% |
|
Customers |
||
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K1 Customer satisfaction auditors (Scale 1-5) |
Hold 4,5 |
4,6 |
|
K2 Acquisition
|
800 550 |
740 527 |
|
K3 Hit rate Offer via Account Management
|
35% |
41% |
|
Processes |
||
|
P2 Technical Compliance |
Hold approvals, |
Approvals were held, suspensions and |
|
P3 Organisational Compliance |
Minimising risk in a dynamic legal environment |
No indications of non-compliance with organisational compliance (including violations of independence and impartiality). |
|
Employees, learning and development |
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| Goals are formulated for 2023, as no MA survey was conducted in 2022. | ||
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* Standardgeber, Akkreditierungs- und Zulassungsstellen, Gesetzgeber, Behörden
Corporate Reports
Unternehmensbericht 2020:
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