Slide 1: Strong Progress in Revenue, Margin, Earnings and Cash
STRONG PROGRESS IN REVENUE, MARGIN, EARNINGS AND CASH 2021 FULL YEAR RESULTS PRESENTATION 01 March 2022
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 Financial Business Lines Growth Sustainability Highlights Results Review Outlook Excellence
Slide 4: Strong Progress in Revenue, Margin, Earnings and ROIC
STRONG PROGRESS IN REVENUE, MARGIN, EARNINGS AND ROIC YoY YoY 2021 2020 (Constant rates) (Actual rates) Revenue £2,786.3m £2,741.7m 6.5% 1.6% Like-for-like revenue £2,744.0m £2,721.6m 5.6% 0.8% Operating Profit1 £473.9m £427.7m 15.4% 10.8% Operating Margin1 17.0% 15.6% 130bps 140bps EPS¹ 190.8p 170
Slide 5: Broad Based LFL Growth in H2
BROAD BASED LFL GROWTH IN H2 LfL FY¹ LfL H2¹ LfL Nov-Dec¹ Products 7.6% Products 5.8% Products 6.4% Trade 3.0% Trade 4.8% Trade 6.9% Resources 1.7% Resources 5.1% Resources 5.9% Group 5.6% Group 5.5% Group 6.4% 5 Note: (1) At 2021 constant currency rates
Slide 6: H2 Group Operating Profit and Margin Ahead of 2019
H2 GROUP OPERATING PROFIT AND MARGIN AHEAD OF 2019 2014-2021 Group Margin 17.2% 17.5% 16.9% 17.0% 15.9% 16.0% 15.5% 15.6% 2014 2015 2016 2017 2018 2019 2020 2021 2021 performance comparison versus 2019 at CCY LFL Revenue Operating Profit1 Margin FY H1 H2 FY H1 H2 FY H1 H2 Group (1.1%) (2.2%) - (4.0%
Slide 7: Highly Cash Generative Earnings Model Delivers <0 WC
HIGHLY CASH GENERATIVE EARNINGS MODEL DELIVERS <0 WC Adjusted EBITDA1 AdjustedAdjusted Cash Generated Cash Generated from 1 from Operations Adjusted Free Cash Flow1 Operations1 £436m 16-21 CAGR: 5.2% £696m 16-21 CAGR: 4.2% 16-21 CAGR: 3.4% £395m £402m £643m £731m £705m £696m £563m £571m £602m £359m
Slide 8: Scaling Up Our Leading Global Assurance Business with SAI
SCALING UP OUR LEADING GLOBAL ASSURANCE BUSINESS WITH SAI Assurance Complementary Services • Headquartered in Sydney, Australia • Expands Agriculture & Food Industry Supply Chain • Expands Intertek Sustainability Solutions portfolio • Largest jurisdictions include Australia, US, through new programs
Slide 9: Entering the Attractive Food Market in Brazil with JLA
ENTERING THE ATTRACTIVE FOOD MARKET IN BRAZIL WITH JLA • 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 Microscopic analys
Slide 10: 2021 Financial Results
01 02 03 04 05 Performance 2021 Financial Business Lines Growth Sustainability Highlights Results Review Outlook Excellence
Slide 11: Key P&L Financials
KEY P&L FINANCIALS YoY % 2021 Actual Rates Constant Rates Revenue £2,786.3m 1.6% 6.5% Like-for-like revenue1 £2,744.0m 0.8% 5.6% Operating profit2 £473.9m 10.8% 15.4% Operating profit margin2 17.0% 140bps 130bps Diluted earnings per share2 190.8p 11.6% 16.8% Notes: (1) Like-for-like revenue includes
Slide 12: Operating Margin Bridge
OPERATING MARGIN BRIDGE 18.0% 10bps 17.0% 17.0% 20bps 20bps (20bps) 20bps 16.7% 90bps 16.0% 15.6% 15.0% 110bps at constant rates 14.0% 13.0% Trade FX Resources FY 2020 FY 2021 Products Divisional mix Excluding FX and Acquisitions & Disposals Acquisitions & Disposals 12
Slide 13: Cash Flow & Net Debt
CASH FLOW & NET DEBT £m @ actual exchange rates 2021 2020 Adjusted operating profit1 473.9 427.7 Depreciation/amortisation 169.3 174.0 Change in working capital 35.9 88.6 Other2 16.7 14.8 Adjusted cash flow from operations 695.8 705.1 Net capex (96.1) (72.2) Other3 (197.9) (197.3) Adjusted free cash
Slide 14: Financial Guidance
FINANCIAL GUIDANCE FY 2022 Guidance Net finance cost (pre-fx) £35-39m Effective tax rate 26.5-27.0% Minority interest £20-22m Diluted shares (as at 31 December 2021) 161.9m Capex £135-145m Financial Net Debt¹ £640-690m Note: (1) Net debt guidance before any material change in FX rates and any M&A 14
Slide 15: Business Lines Review
01 02 03 04 05 Performance 2021 Financial Business Lines Growth Sustainability Highlights Results Review Outlook Excellence
Slide 16: Strong Product Performance in H2
STRONG PRODUCT PERFORMANCE IN H2 Revenue (£m) Operating profit (£m) Operating Profit Margin1 CCY¹ 21 vs 20 21 vs 19 +14% 936 820 229 +350 24.4% +34% 20.9% bps Revenue 9.1% 2.9% 171 Like-for-like Revenue 7.6% 2.2% Adjusted Operating 18.0% 3.4% Profit Adjusted Operating 180bps 10bps Margin H1 21 H2 21
Slide 17: Strong Product Performance in H2
STRONG PRODUCT PERFORMANCE IN H2 H1 21 Actuals H2 21 Actuals FY21 Actuals Growth Drivers Increased focus of corporations on Increased focus on Business Assurance Double-digit High single-digit Double-digit supply chain resilience and risk Sustainability ethical and sustainable management supply Buil
Slide 18: H2 Growth Acceleration in Trade
H2 GROWTH ACCELERATION IN TRADE Revenue (£m) Operating Profit (£m) Operating Margin1 CCY 21 vs 20 21 vs 19 32 +340 +7% +57% bps Revenue 2.8% (7.6%) 297 10.6% 278 Like-for-like Revenue 3.0% (7.5%) 20 7.2% Adjusted Operating Profit 17.3% (32.8%) Adjusted Operating Margin 110bps (330bps) H1 21 H2 21 H1
Slide 19: H2 Growth Acceleration in Resources
H2 GROWTH ACCELERATION IN RESOURCES Revenue (£m) Operating Profit (£m) Operating Margin1 CCY¹ 21 vs 20 21 vs 19 +10 Revenue 1.6% (5.0%) +7% +11% 4.9% bps 5.0% 236 11 12 Like-for-like Revenue 1.7% (4.5%) 220 Adjusted Operating Profit (18.7%) (26.1%) Adjusted Operating Margin (120bps) (140bps) H1 21 H
Slide 20: Growth Outlook
01 02 03 04 05 Performance 2021 Financial Business Lines Growth Sustainability Highlights Results Review Outlook Excellence
Slide 21: COVID-19 Has Made the Case for Total Quality Assurance Stronger
COVID-19 HAS MADE THE CASE FOR TOTAL QUALITY ASSURANCE STRONGER GLOBAL ATIC MARKET CLIENTS HAVE REALISED THE NEED TO INCREASE THEIR INVESTMENTS IN QUALITY ASSURANCE 21
Slide 22: 87% of Companies Will Invest to Strengthen Their Operations
87%* OF COMPANIES WILL INVEST TO STRENGTHEN THEIR OPERATIONS • Resilient Supply Chains Covid-19 proving a catalyst for corporations to improve the resilience of their supply chains • Product and Service Innovation Increased corporate focus on quality, safety, sustainability, convenience and value fo
Slide 23: We Expect the Industry to Grow Faster Post COVID-19
WE EXPECT THE INDUSTRY TO GROW FASTER POST COVID-19 PRODUCTS ATIC TRADE ATIC RESOURCES ATIC 63% OFREVENUE¹ 21% OFREVENUE¹ 16% OFREVENUE¹ 84% OFPROFIT¹ 11% OFPROFIT¹ 5% OFPROFIT¹ GDP+ GDP GROWTH LONG-TERM GROWTH Growth in Brands, Faster Population Growth Population Growth Investment in E&P, GDP growt
Slide 24: We Are Investing in Innovation to Support Our Clients
WE ARE INVESTING 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 se
Slide 25: We Are Successfully Scaling Up Our Investments in Growth
WE ARE SUCCESSFULLY SCALING UP OUR INVESTMENTS IN GROWTH M&A INVESTMENTS ORGANIC INNOVATIONS 25
Slide 26: Group Outlook 2022
GROUP OUTLOOK 2022 • Robust LFL Revenue growth at CCY • Margin progression year-on-year • Strong free cash flow • Capex: £135-145m • FX impact: Neutral • Financial net debt: £640-690m1 Note (1): Before any material change in FX and any M&A 26
Slide 27: Sustainability Excellence
01 02 03 04 05 Performance 2021 Financial Business Lines Growth Sustainability Highlights Results Review Outlook Excellence
Slide 28: We Are an Amazing Force for Good
WE ARE AN AMAZING FORCE FOR GOOD OUR PURPOSE Bringing Quality, Safety and Sustainability to Life OUR VISION To be the world’s most trusted partner for Quality Assurance OUR VALUES • We are a global family that values diversity • We always do the right thing. With precision, pace and passion • We tru
Slide 29: Helping Our Clients Build Stronger Businesses
HELPING OUR CLIENTS BUILD STRONGER BUSINESSES OUR CUSTOMER PROMISE Total Quality Assurance expertise, delivered consistently with precision, pace and passion, enabling our customers to power ahead safely CAPITALISING ON INTERTEK SCIENCE-BASED CUSTOMER EXCELLENCE 29
Slide 30: Offering Leading End-to-End Sustainability Assurance
OFFERING LEADING END-TO-END SUSTAINABILITY ASSURANCE Systemic End-to-End Sustainability Solutions INTERTEK OPERATIONAL SUSTAINABILITY INTERTEK CORPORATE SUSTAINABILITY Intertek ESG Audit SOLUTIONS CERTIFICATION Helping organizations Independent audit of achieve sustainability excellence sustainabili
Slide 31: Sustainability Excellence Across All Intertek Operations
SUSTAINABILITY EXCELLENCE ACROSS ALL INTERTEK OPERATIONS SUSTAINABILITY CENTRAL TO OUR 5X5 STRATEGY END-TO-END SYSTEMIC SUSTAINABILITY APPROACH • Targeting Net Zero emissions by 2050 • Yearly management incentive • Continuous progress on carbon intensity reductions • Carbon intensity scorecard for e
Slide 32: We Are an Amazing Force for Good, Delivering Growth for All
WE ARE AN AMAZING FORCE FOR GOOD, DELIVERING GROWTH FOR ALL SCIENCE-BASED CUSTOMER EXCELLENCE IN QUALITY, SAFETY & SUSTAINABILITY USP Our Services Our Sectors Our Value Creation Our Mid- to Long-Term Stakeholders Employees Customers Suppliers Regulators Shareholders Communities Our 32
Slide 33: A High Quality Global Growth Business with Improving Margin
A HIGH QUALITY GLOBAL GROWTH BUSINESS WITH IMPROVING MARGIN, STRONG CASH FLOW AND EXCELLENT ROIC A CLEAR PURPOSE • Bringing Quality, Safety and Sustainability to Life • Leading ATIC solutions the world needs now • Investments in sustainable growth HIGH QUALITY EARNINGS AND CASH ACCELERATING MARKET G
Slide 34: Intertek: Total Quality. Assured.
ntertek Total Quality. Assured.