Slide 1: Strong Performance in Revenue, Earnings, Cash & ROIC
STRONG PERFORMANCE IN REVENUE, EARNINGS, CASH & ROIC 2021 HALF YEAR RESULTS PRESENTATION 30 July 2021
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This presentation contains certain forward-looking statements with respect to the financial condition, results, operations and business of Intertek Group plc. These statements and forecasts involve risk and uncertainty because they relate to
Slide 3: Performance Highlights
01 02 03 04 05 Performance 2021 Half Year Divisional Review Growth Outlook Highlights Financial Results Opportunities
Slide 4: Strong Performance in Revenue, Earnings, Cash & ROIC
STRONG PERFORMANCE IN REVENUE, EARNINGS, CASH & ROIC YoY YoY H1 2021 H1 2020 (Actual rates) (Constant rates) Revenue £1,317.6m £1,330.6m (1.0%) 4.8% L4L revenue1 £1,317.6m £1,319.0m (0.1%) 5.8% Operating Profit2 £201.7m £168.2m 19.9% 26.2% Adjusted Operating Margin2 15.3% 12.6% 270bps 260bps Adjus
Slide 5: Products & Trade: L4L +7.4%, OP +29.5% & Margin +310bps
PRODUCTS & TRADE: L4L +7.4%, OP +29.5% & MARGIN +310BPS L4L Revenue Growth1 Operating Profit Growth 1,2 Margin Accretion1,2 Products +9.7% Products +32.5% Products +390bps Trade +1.1% Trade +8.6% Trade +50bps Products Products Products +7.4% +29.5% +310bps & Trade & Trade & Trade Resources (1.6%) Re
Slide 6: SAI Is an Attractive Opportunity to Scale Up in Assurance
SAI IS AN ATTRACTIVE OPPORTUNITY TO SCALE UP IN ASSURANCE Assurance Financial highlights • Part of the wider SAI Global Group owned by • Transaction consideration: A$855m Baring Private Equity Asia • Funded by newly arranged certain funds facilities • Audit and Standards businesses part of the acqui
Slide 7: SAI Adds Complementary Geographies and Services
SAI ADDS COMPLEMENTARY GEOGRAPHIES AND SERVICES Global footprint very complementary Additional services • Expand Agriculture & Food Industry Supply Chain assurance capabilities • Complements focus on Milton Keynes, UK St Petersburg, Russia providing wider ATIC services Toronto, Canada Warsaw, Poland
Slide 8: JLA an Opportunity to Enter the Attractive Food Market in Brazil
JLA AN OPPORTUNITY TO ENTER THE ATTRACTIVE FOOD MARKET IN BRAZIL • Established in 1990, JLA is a Brazil based Food, Agri and Environmental testing business • The Company provides microbiological, chemical testing and inspections with more than 170 employees Portfolio of services Locations Microsco
Slide 9: Sustained Strong Cash Performance
SUSTAINED STRONG CASH PERFORMANCE Operating Cash Flow (£m) 1 Free Cash Flow (£m) 1 Working Capital as % of Revenue2 274 142 13.4% 268 253 132 226 123 99 105 11.0% 204 170 156 85 8.2% 7.7% 59 6.4% 3.4% 1.2% HY15 HY16 HY17 HY18 HY19 HY20 HY21 HY15 HY16 HY17 HY18 HY19 HY20 HY21 HY15 HY16 HY17 HY18 HY19
Slide 10: 2021 Half Year Financial Results
01 02 03 04 05 Performance 2021 Half Year Divisional Review Growth Outlook Highlights Financial Results Opportunities
Slide 11: Key P&L Financials
KEY P&L FINANCIALS YoY % H1 2021 Actual Rates Constant Rates Revenue £1,317.6m (1.0%) 4.8% L4L revenue1 £1,317.6m (0.1%) 5.8% Operating profit2 £201.7m 19.9% 26.2% Operating profit margin2 15.3% 270bps 260bps Diluted earnings per share2 78.2p 23.9% 31.4% Notes: (1) L4L revenue includes acquisitions
Slide 12: Operating Margin Bridge
OPERATING MARGIN BRIDGE 260bps at constant rates 16.0% 40bps 10bps 220bps 10bps 15.0% (10)bps 14.0% 15.3% 13.0% 15.2% 12.0% 12.6% 11.0% 10.0% FX H1 2020 Trade Resources HY 2021 Products Excluding FX and Divisional mix Acquisitions & Disposals 12
Slide 13: Cash Flow & Net Debt
CASH FLOW & NET DEBT £m @ actual exchange rates H1 2021 H1 2020 Adjusted operating profit1 201.7 168.2 Depreciation/amortisation 82.1 87.3 Change in working capital (36.3) 6.9 Other2 5.9 5.7 Adjusted cash flow from operations 253.4 268.1 Net capex (39.5) (31.2) Other3 (91.3) (95.0) Adjusted free cas
Slide 14: Financial Guidance
FINANCIAL GUIDANCE FY 2021 Guidance Net finance cost (pre-fx) £29-33m Effective tax rate 26.5-27.0% Minority interest £17-19m Diluted shares (as at 30 June 2021) 162.0m Capex £110-120m Financial Net Debt £350-400m Financial Net Debt (assuming SAI transaction closes 1st Sept) £835-885m Note: Net debt
Slide 15: Divisional Review
01 02 03 04 05 Performance 2021 Half Year Divisional Review Growth Outlook Highlights Financial Results Opportunities
Slide 16: Strong Product Performance
STRONG PRODUCT PERFORMANCE Revenue (£m) L4L Revenue (£m) Operating Profit (£m) Operating Margin (%) 820 820 171 800 136 20.9% 790 16.9% H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 +8.3% CCR +9.7% CCR +32.5% CCR +390bps CCR +2.4% +3.7% +26.1% +400bps HY21 Actual Growth Drivers Demand for sustaina
Slide 17: Strong Product Performance
STRONG PRODUCT PERFORMANCE HY21 Actual Growth Drivers Increased focus of corporations on Increased focus on ethical Business Assurance Double-digit L4L supply chain resilience and risk Sustainability and sustainable supply management Building & Low-single digit Growing demand for greener, safer and
Slide 18: Solid Trade Performance
SOLID TRADE PERFORMANCE Revenue (£m) L4L Revenue (£m) Operating Profit (£m) Operating Margin (%) 295 278 294 278 20 20 7.2% 6.8% H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 +0.9% CCR +1.1% CCR +8.6% CCR +50bps CCR -5.6% -5.4% Flat +40bps HY21 Actual Growth Drivers Low-single digit Global and reg
Slide 19: Resilient Resources Performance
RESILIENT RESOURCES PERFORMANCE Revenue (£m) L4L Revenue (£m) Operating Profit (£m) Operating Margin (%) 236 235 13 5.3% 4.9% 220 220 11 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 H1 20 H1 21 -1.8% CCR -1.6% CCR -13.0% CCR -60bps CCR -6.7% -6.4% -15.1% -40bps HY21 Actual Growth Drivers Low single-digit Tec
Slide 20: Growth Opportunities
01 02 03 04 05 Performance 2021 Half Year Divisional Review Growth Outlook Highlights Financial Results Opportunities
Slide 21: The ATIC Industry Expected to Grow Faster Post COVID-19
THE ATIC INDUSTRY EXPECTED TO GROW FASTER POST COVID-19 GLOBAL ATIC MARKET GROWTH OPPORTUNITIES 01 CUSTOMER RETENTION $50BN Currently 02 outsourced CUSTOMER PENETRATION 03 $200bn ATIC SELLING Currently in-house 04 NEW CUSTOMER WINS Untapped 05 potential CUSTOMER OUTSOURCING 21
Slide 22: ATIC Solutions Enable Our Clients to Operate Safely
ATIC SOLUTIONS ENABLE OUR CLIENTS TO OPERATE SAFELY TESTING, INSPECTION & CERTIFICATION PROVIDES QUALITY, SAFETY & SUSTAINABILITY CONTROLS • Enabling our customers to identify and mitigate intrinsic risk in their SUPPLY PRODUCTION DISTRIBUTION RETAIL operations, their supply and TIER 3 TIER 2 TIER 1
Slide 23: Intertek Superior ATIC Customer Service
INTERTEK SUPERIOR ATIC CUSTOMER SERVICE OUR CUSTOMER PROMISE Total Quality Assurance expertise, delivered consistently with precision, pace and passion, enabling our customers to power ahead safely INDUSTRY-LEADING EXPERTISE ǀ CUSTOMER-CENTRIC ǀ INNOVATION-LED 23
Slide 24: 87% of Companies Will Invest Within 2 Years to Strengthen Supply Chains
87%* OF COMPANIES WILL INVEST WITHIN 2 YEARS TO STRENGTHEN THEIR SUPPLY CHAINS MEET HIGHER MAKE SUSTAINABILITY OPERATE WITH SUPPLY CHAIN OPERATIONAL AND RISK-BASED MORE RESILIENT CORPORATE QUALITY ASSURANCE 24/7 EXPECTATIONS POWERED BY BIG DATA FROM ALL ENSURE REDUCE RISKS LINKED TO HEALTH, SAFETY &
Slide 25: Investments in Innovation to Support Our Clients
INVESTMENTS IN INNOVATION TO SUPPORT OUR CLIENTS BREAKTHROUGH INNOVATIONS Ground-breaking solutions to BREAKTHROUGH Develop new Create new markets, create new markets breakthrough products target new customer and services needs Innovation from the core Strengthening our existing products and service
Slide 26: Scaling-Up Our Winning 1-100 Innovations
SCALING-UP OUR WINNING 1-100 INNOVATIONS INTERTEK ATIC INNOVATIONS Insert Footer Here 26 1 0
Slide 27: Investments in Emerging Growth Opportunities in High Margin Sectors
INVESTMENTS IN EMERGING GROWTH OPPORTUNITIES IN HIGH MARGIN SECTORS CHINA ELECTRICAL Automated Guided UK TT Vehicle Certification INDUSTRY SERVICES EV Centre of UK PHARMA CarbonZero Certification BEIJING FOOD Excellence Sputnik EU 2022 Olympic Village Crystek Honey Approval Inspection USA ELECTRICAL
Slide 28: Operational Excellence Driving Sustainable Value Creation for All
OPERATIONAL EXCELLENCE DRIVING SUSTAINABLE VALUE CREATION FOR ALL DISCIPLINED PERFORMANCE MANAGEMENT SUPERIOR CUSTOMER SERVICE Weekly, Monthly, Quarterly, 6,000+ Monthly Continuous improvement Yearly, 5 Yearly Performance Management across Financial Customer based on our frequent and Operational Met
Slide 29: Accretive Disciplined Allocation of Capital
ACCRETIVE DISCIPLINED ALLOCATION OF CAPITAL 01 Capex and working capital investment to support organic growth (target c.5% of revenue in capex) Sustainable shareholder returns through payment of progressive 02 dividends based on a target payout ratio of c.50% M&A focused on strong growth and margin
Slide 30: Intertek High Quality Earnings Model
INTERTEK HIGH QUALITY EARNINGS MODEL Our Services Assurance Testing Inspection Certification Products Trade Resources Our Sectors GDP+ GDP growth Long-term growth GDP+ Organic Intertek Virtuous Economics Our Mid- to Long-Term revenue growth Value Creation in real terms Margin accretive Investments i
Slide 31: Outlook
01 02 03 04 05 Performance 2021 Half Year Divisional Review Growth Outlook Highlights Financial Results Opportunities
Slide 32: Broad-Based L4L Acceleration
BROAD-BASED L4L ACCELERATION Group LFL % Products LFL % 12.0% 13.8% 13.9% 2020 9.3% 2020 0.7% (4.1%) (4.0%) (6.3%) (4.6%) 2021 (1.4%) 2021 Jul-Oct Nov-Dec Jan-Feb Mar-Apr May-Jun Jul-Oct Nov-Dec Jan-Feb Mar-Apr May-Jun Trade LFL % Resources LFL % 2020 5.3% 8.5% 2021 2020 9.5% (10.1%) (8.5%) (9.2%) (
Slide 33: Group Outlook 2021
GROUP OUTLOOK 2021 • Robust L4L revenue growth at constant currency • Margin progression year-on-year • Strong free cash flow performance • Capex: £110-120m • FX impact of -500bps on revenue and operating profit • Financial net debt: £835- 885m, assuming closing of the acquisition of SAI Global Assu
Slide 34: GDP+ Growth Outlook
GDP+ GROWTH OUTLOOK PRODUCTS ATIC TRADE ATIC RESOURCES ATIC 62% OFREVENUE1 21% OFREVENUE1 17% OFREVENUE 1 85% OFPROFIT1 10% OFPROFIT1 5% OFPROFIT 1 GDP+ GDP GROWTH LONG-TERM GROWTH Growth in Brands, Faster Population Growth Population Growth Investment in E&P, GDP growth SKUs & e-Commerce innovation
Slide 35: Well Positioned to Benefit from Industry Growth Acceleration
WELL POSITIONED TO BENEFIT FROM INDUSTRY GROWTH ACCELERATION • Quality Assurance industry expected to grow faster post COVID-19 • Industry leader with scale positions and superior ATIC customer service • Investments in innovations and acquisitions • Operational excellence driving consistent performa
Slide 36: Intertek: Total Quality. Assured.
intertek Total Quality. Assured.
Slide 37: Group Performance (H1 20 – H1 21)
GROUP PERFORMANCE (H1 20 – H1 21) Revenue (£m) Adjusted Operating Profit (£m) 201.7 1,330.6 1,317.6 168.2 800.3 819.5 170.9 135.5 294.7 278.2 235.6 219.9 20.1 20.1 12.6 10.7 H1 20 H1 21 H1 20 H1 21 Margin Key Metrics H1 2021 H1 20 H1 21 % Group % Group L4L Revenue Growth1 Revenue Profit Products 16.
Slide 38: Key Investor Information
KEY INVESTOR INFORMATION Key dates: July - October Trading Update 24 November 2021 FY21 Results Announcement 1 March 2022 Conference attendance: Citi Growth Conference 2021 16 September 2021 IR Bernstein, Strategic Decisions Conference, London 23 September 2021 CEO, IR Berenberg, Testing, Inspection