Slide 1: Well Positioned to Navigate an Unprecedented Pandemic
WELL POSITIONED TO NAVIGATE AN UNPRECEDENTED PANDEMIC MAY 2020 TRADING STATEMENT 21 May 2020
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: Thank you NHS and all key workers
: THANK * YOU : _@ NHS 'p - * AND, /-ALL KEY*. i ere ¥ WORKERS es ;
Slide 4: Industry Leader with High Quality Earnings Model
INDUSTRY LEADER WITH HIGH QUALITY EARNINGS MODEL • Global network of state-of-the-art operations in 100 + countries with subject matter experts • Scale and with market-leadership positions across the Product, Trade and Resources • Depth and breadth of mission-critical ATIC High margin, solutions str
Slide 5: Track Record of Consistent Value Creation
TRACK RECORD OF CONSISTENT VALUE CREATION Revenue (£m) Adj. Operating Margin (%) Adjusted EPS (p) +43% 2,987 +170 17.2% bps +60% 211.7 15.5% 2,093 132.1 FY14 FY19 FY14 FY19 FY14 FY19 Free Cash Flow (£m) ROIC - Actual (%) Revenue per employee (£) 380 +650 22.8% 66,425 +106% +21% bps 54,845 16.3% 185
Slide 6: Strong Balance Sheet
STRONG BALANCE SHEET • Group net debt of £629m*, 1.0 x net debt:EBITDA, down from 1.4x in prior year, reflecting continued strong cash generation • Debt has a long duration maturity profile, with Company having recently refinanced and extended its Revolving Credit Facility to US$850m with a syndicat
Slide 7: Progressive Dividend Policy
PROGRESSIVE DIVIDEND POLICY • Group operates progressive dividend policy with targeted payout ratio of c.50% DIVIDEND (P) • Intertek ranks 2nd highest in the FTSE100 in-terms of dividend progression since 2002 IPO 14-19 CAGR: +16.6% 99.1 105.8 71.3 • FY 2019 dividend of £170m 49.1 52.3 62.4 • 105.8p
Slide 8: Bringing Quality, Safety and Sustainability to Life
BRINGING QUALITY, SAFETY AND SUSTAINABILITY TO LIFE • Total Quality Assurance superior customer service • Powerful portfolio • High-quality compounder earnings model • Passionate customer-centric organisation • Disciplined performance management
Slide 9: Agile and Fast to Act
AGILE AND FAST TO ACT • Adapted to new operating environment with agility and speed • Comprehensive policy and processes to protect our people’s health and safety • Helped our clients resume operations
Slide 10: The Situation Evolved Rapidly…
THE SITUATION EVOLVED RAPIDLY… Insert Footer Here 10
Slide 11: Five Operational Priorities
FIVE OPERATIONAL PRIORITIES Employee Customer Health and Margin Cash Engagement Service Safety 11
Slide 12: Health & Safety Comes First
HEALTH & SAFETY COMES FIRST INTERTEK COVID 19 HSE POLICY 1. The use of personal protective equipment, including face masks 2. Hygiene, control and prevention measures 3. Social distancing and restrictions on gatherings 4. The sanitisation of facilities 5. Guidance for visitors to our facilities 6. G
Slide 13: Mission-Critical Role in the Economy
MISSION-CRITICAL ROLE IN THE ECONOMY • Committed to providing uninterrupted service to our clients to make sure their supply chains operate safely • Keeping our operations open 24/7 to provide maximum support to our clients during these very difficult times • Increased client communication frequency
Slide 14: Supporting Our Clients with Innovative Solutions
SUPPORTING OUR CLIENTS WITH INNOVATIVE SOLUTIONS Curbside pick-up, Design, development, Food and Chemical & innovative sample pick-up testing and certification of Increased productivity and Pharma labs provided 24/7 solution to ensure social Healthcare and Medical shift working hours, testing and in
Slide 15: Remote Video Inspection and Audit
REMOTE VIDEO INSPECTION AND AUDIT Intertek remote solutions, enabling mission-critical Remote inspection and audit solutions using Inview, business continuity ensuring the safety of our employees and customers Turnkey remote audit and inspection solutions, reducing turnaround times while providing t
Slide 16: Priority Testing Service for Life-Saving Medical Equipment
PRIORITY TESTING SERVICE FOR LIFE-SAVING MEDICAL EQUIPMENT Strong Intertek Medical Devices Services End-to-End Services for Medical Devices Platform • TQA expertise to support our non-medical clients in Surgical Lights Anaesthesia developing and manufacturing medical equipment • Prioritisation, and
Slide 17: Global Solutions for Personal Protective Equipment
GLOBAL SOLUTIONS FOR PERSONAL PROTECTIVE EQUIPMENT Supporting PPE manufacturers to meet heightened demand from governments, medical organisations and consumers… Safety Goggles and Masks Protective Gowns Gloves Face Shields • Bacterial filtration • Blood resistance • Sterility and performance • Fluid
Slide 18: Express Service for Hand Sanitisers
EXPRESS SERVICE FOR HAND SANITISERS Intertek is providing services to test sanitisers according to WHO guidelines End-to-end efficacy testing of hand sanitizers to fight COVID-19 Label claim testing for hand sanitizers Complete set of tests to evaluate best-in-class Ethanol Suppliers for hand saniti
Slide 19: Supporting the Pharma Industry
SUPPORTING THE PHARMA INDUSTRY Vaccine development Therapeutic development Contingency and risk support, Diagnostic support to help support for screening and mitigation services to repurposing and with testing of suspected re-deployment of existing maintain medicine supply reformulation of drug pati
Slide 20: Leading Innovations in the Energy Sector
LEADING INNOVATIONS IN THE ENERGY SECTOR RiskAware, innovative data analytics solution, enabling customers to focus their quality assurance and quality control Our 130+ years of experience in Oil & Gas industry, and spending on higher criticality equipment our remote inspections, data analytics, and
Slide 21: Cybersecurity Assurance Supporting Remote Working
CYBERSECURITY ASSURANCE SUPPORTING REMOTE WORKING Mass remote working network security penetration testing With our comprehensive cyber-security portfolio, Intertek is perfectly positioned to support our customers to manage the cyber risks arising as their Critical network and infrastructure testing
Slide 22: Helping Governments in Fight Against COVID
HELPING GOVERNMENTS IN FIGHT AGAINST COVID • Ensuring consumer-facing establishments maintain highest hygiene and safety standards • Helping governments in setting-up emergency medical facilities and safe PPE supply chains • Collaborating with trade associations to ensure safe manufacturing and supp
Slide 23: Intertek Proprietary Research Released 1 May 2020
INTERTEK PROPRIETARY RESEARCH RELEASED 1 MAY 2020 95% would find it 71% of employees do reassuring if there was a 76% said not want to return to universal quality they were ‘scared’ or their workplace unless standard adopted by ‘nervous’ about visiting a authenticated health companies to ensure the
Slide 24: Protek: Safety. Everywhere. Every day.
eet@K Safety. Everywhere. Every day.
Slide 25: Protek
PROTEK Operating Systems & People Assurance Processes Facilities Materials & Surfaces Products State of the art training End-to-end solutions Total assurance solutions Complete audit / testing / Protek Product solutions and certification designed to help identify for all types of facilities, inspect
Slide 26: Helping Our Communities
HELPING OUR COMMUNITIES • Donation campaigns to support Wuhan in the fight against the coronavirus • Bigane Qalma crowdfunding program to provide relief packages across Central Asia • Building & Construction team in Denver urgently designed and constructed a tank farm for large oxygen tanks, vaporis
Slide 27: Disciplined Margin Management
DISCIPLINED MARGIN MANAGEMENT OPERATING MARGIN 17.2% • Disciplined margin process • Monthly performance management progress reviews for Top 30 Countries / 16 Business Lines • Country and Business Line benchmarking • Sire span of performance management • Strict controls on pricing and cost discipline
Slide 28: Disciplined Cash Management
DISCIPLINED CASH MANAGEMENT FREE CASH FLOW £380m £342m £351m £318m • Disciplined cash collection • Capex review to delay those investments not time critical, £235m reducing planned 2020 expenditure by a third • Voluntary salary-deferral scheme for management, running £185m from March to October 2020
Slide 29: Never Been More Important to Stay Connected Every Day
NEVER BEEN MORE IMPORTANT TO STAY CONNECTED EVERY DAY • World-class digital communication platform • Reaching out frequently to everybody in the organisation • Intertek Hero featured daily in a recognition video
Slide 30: We Have Delivered a Resilient Trading Performance
WE HAVE DELIVERED A RESILIENT TRADING PERFORMANCE • Strong business model, geographic and business line diversity and disciplined approach to performance management • Global pandemic has unfolded at great speed with broad-based lockdown initiatives in every country • We will provide an update on our
Slide 31: January – April Revenue £881.6m, 4.6% Below YoY
JANUARY – APRIL REVENUE £881.6M, 4.6% BELOW YOY Revenue Performance 4 months – January to April 2020 2019 Change at Change at Like-for-Like £m £m actual constant at constant 1 Products 519.9 549.7 (5.4%) (6.1%) (6.6%) Trade 200.8 216.0 (7.0%) (5.9%) (5.9%) Resources 160.9 158.6 1.5% 2.4% 2.4% Group
Slide 32: Financial Guidance
FINANCIAL GUIDANCE • On an IFRS 16 basis, we expect: • Net Finance Costs will be c.£37-40m • The effective tax rate to be in the 25.5– 26.0% range • Minority interests between £19-21m • We are investing in growth and expect our full year Capex investments to be c.£ 90-100m • In terms of financial ne
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Slide 34: We Are Confident Moving Forward
WE ARE CONFIDENT MOVING FORWARD • Intertek is strong, agile, responsive, resilient and responsible • Intertek is well positioned to navigate an unprecedented pandemic • Intertek will benefit from additional attractive growth opportunities post Covid 19. 34