Both Canon S120 and Canon SX200 IS have 12.0 MP resolution sensors but Canon S120's sensor is 1/1.7-inch (7.44 x 5.58 mm ) and Canon SX200 IS's sensor is 1/2.3-inch (6.17 x 4.55 mm ).
Since Canon S120's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Canon SX200 IS.
Below you can see the S120 and SX200 IS sensor size comparison.
As seen above, Canon S120 has a 1.5x Larger sensor area than Canon SX200 IS. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.