Slide 1: A High Quality Growth Business Creating Sustainable Value
A HIGH QUALITY GROWTH BUSINESS CREATING SUSTAINABLE VALUE 2022 HALF YEAR RESULTS PRESENTATION 29 July 2022
Slide 2: H1 22 Key Take Aways
H1 22 KEY TAKE AWAYS 1. Robust 2. China back to 3. Acquisitions 4. Robust 5. Growth financial normal on performing earnings acceleration in our performance 1st July well in revenue growth ATIC end-markets in H11 and margin expected in 221 2 Note: (1) at constant rates
Slide 3: 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 4: Performance Highlights
01 02 03 04 05 Performance Financial Results Business Lines 2022 Beyond Highlights Review Outlook 2022
Slide 5: Robust Financial Performance in H1
ROBUST FINANCIAL PERFORMANCE IN H1 YoY YoY H1 22 H1 21 (Actual rates) (Constant rates) Revenue £1,491.7m £1,317.6m 13.2% 9.5% Like-for-like revenue £1,427.3m £1,315.4m 8.5% 4.9% Operating Profit1 £217.3m £201.7m 7.7% 4.0% Operating Margin1 14.6% 15.3% (70bps) (70bps) EPS¹ 86.5p 78.2p 10.6% 6.7% Inte
Slide 6: Broad-Based Mid-Single Digit LFL Revenue Growth
BROAD-BASED MID-SINGLE DIGIT LFL REVENUE GROWTH Jan-April May-June H1 22 Group Group 4.8% Group Group 5.2% Group Group 4.9% Group ex-China 6.8% Group ex-China 7.7% Group ex-China 7.1% Products Group 4.5% Products Group 3.9% Products Group 4.3% Group ex-China 7.0% Group ex-China 6.8% Group ex-China 7
Slide 7: Resilient Margin Performance
RESILIENT MARGIN PERFORMANCE Group Margin Margin by Division 15.3% 14.6% 19.3% 12.6% Products 20.9% 7.6% H1 22 Trade 7.2% H1 21 Resources 4.7% H1 20 H1 21 H1 22 4.9% GOOD MARGIN PERFORMANCE OUTSIDE CHINA: MARGIN ACCRETION OF 20BPS1 Note: (1) at constant rates 7
Slide 8: Financial Results Review
01 02 03 04 05 Performance Financial Results Business Lines 2022 Beyond Highlights Review Outlook 2022
Slide 9: Key P&L Financials
KEY P&L FINANCIALS YoY % H1 22 H1 21 Actual Rates Constant Rates Revenue £1,491.7m £1,317.6m 13.2% 9.5% Like-for-like revenue1 £1,427.3m £1,315.4m 8.5% 4.9% Operating costs2 £1,274.4m £1,115.9m 14.2% 10.5% Operating profit2 £217.3m £201.7m 7.7% 4.0% Operating profit margin2 14.6% 15.3% (70bps) (70bp
Slide 10: Operating Margin Bridge – H1
OPERATING MARGIN BRIDGE – H1 22 16.0% 15.3% (110bps) 15.0% 10bps 0bps 14.6% 10bps 14.5% 20bps 0bps 14.0% (80bps) at constant rates 13.0% Products FX Other H1 2021 Trade Resources H1 2022 Excluding FX and Acquisitions & Disposals Acquisitions & Disposals 10
Slide 11: Cash Flow & Net Debt
CASH FLOW & NET DEBT £m @ actual exchange rates1 H1 22 H1 21 YoY Operating profit 217.3 201.7 15.6 Depreciation/amortisation 87.2 82.1 5.1 Change in working capital (74.4) (36.3) (38.1) Other2 8.0 5.9 2.1 Adjusted cash flow from operations 238.1 253.4 (15.3) Capital expenditure (41.1) (40.0) (1.1) I
Slide 12: An Average Debt Maturity of 4.5 Years at a Fixed Rate of 2.7%
AN AVERAGE DEBT MATURITY OF 4.5 YEARS AT A FIXED RATE OF 2.7%1 $600m $500m $490m $400m $300m $200m $160m $150m $125m $120m $100m $75m $0m $0m 2022 2023 2024 2025 2026 2027 2028-2030 1 4.5 years is the weighted average maturity and 2.7% is the weighted average interest on all senior debt in USD (83%
Slide 13: Financial Guidance
FINANCIAL GUIDANCE FY 2022 Guidance Net finance cost (pre-fx) £34-38m Effective tax rate 26.5-27.0% Minority interest £20-22m Diluted shares (as at 30 June 2022) 161.8m Capex £125-135m Financial Net Debt¹ £730-780m Note: (1) Net debt guidance before any material change in FX rates and any M&A 13
Slide 14: Business Lines
01 02 03 04 05 Performance Financial Results Business Lines 2022 Beyond Highlights Review Outlook 2022
Slide 15: Products Delivered a Robust Performance
PRODUCTS DELIVERED A ROBUST PERFORMANCE Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 820 951 887 19.3% 817 171 183 20.9% H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 11.5% CCR 4.3% CCR 2.3% CCR (170bps) CCR 16.0% 8.5% 7.2% (160bps) HY 22 Actual LfL HY 22 Ac
Slide 16: Growth Acceleration and Margin Accretion in Trade
GROWTH ACCELERATION AND MARGIN ACCRETION IN TRADE Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 278 300 278 299 20 23 7.2% 7.6% H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 5.8% CCR 5.7% CCR 18.8% CCR 90bps CCR 7.7% 7.6% 12.9% 40bps HY 22 Actual LfL HY 22 Ac
Slide 17: Higher ATIC Demand in the Resources Sector
HIGHER ATIC DEMAND IN THE RESOURCES SECTOR Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 241 241 220 220 4.9% 4.7% 11 11 H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 H1 21 H1 22 6.4% CCR 6.4% CCR 4.6% CCR (10bps) CCR 9.6% 9.6% 6.5% (20bps) HY 22 Actual LfL HY 22 Actual
Slide 18: 2022 Outlook
01 02 03 04 05 Performance Financial Results Business Lines 2022 Beyond Highlights Review Outlook 2022
Slide 19: Shanghai Business Back to Normal
SHANGHAI BUSINESS BACK TO NORMAL JingAn Pudong • Softlines/Hardlines • Caleb Brett • Electrical • Industry Services • Business Assurance • Transportation • Chemicals & Pharma Technologies • Government & Trade • IESS Services 19 Xuhui • Softlines/Hardlines • Electrical • Food • Minerals • AgriWorld •
Slide 20: 7.1% LFL Revenue Growth Outside of China
7.1% LFL REVENUE GROWTH OUTSIDE OF CHINA LFL1 Jan-April May-June H1 2022 Group 6.8% 7.7% 7.1% Products 7.0% 6.8% 7.0% Trade 6.4% 8.7% 7.2% Resources 6.6% 8.8% 7.4% DOUBLE DIGIT OPERATING PROFIT GROWTH WITH 20BPS MARGIN ACCRETION OUTSIDE CHINA1 Note: (1) at constant rates 20
Slide 21: Group Outlook 2022
GROUP OUTLOOK 2022 • Robust LFL revenue growth at CCY with robust LFL revenue for Products, Trade and Resources • Strong pricing power and disciplined cost management • Margin slightly lower than 21 due to Covid-19 issues in first half of 22 in China, divisional mix and investments in growth • Stron
Slide 22: Beyond 2022
01 02 03 04 05 Performance Financial Results Business Lines 2022 Beyond Highlights Review Outlook 2022
Slide 23: ATIC Demand Will Grow Faster Post Covid
ATIC DEMAND WILL GROW FASTER POST COVID 19 GLOBAL ATIC MARKET GROWTH OPPORTUNITY 01 CUSTOMER $50BN RETENTION Currently 02 outsourced CUSTOMER PENETRATION 03 $200bn ATIC CROSS- SELLING Currently in-house 04 NEW CUSTOMER WINS Untapped 05 potential CUSTOMER OUTSOURCING 23
Slide 24: Attractive ATIC Structural Growth Drivers
ATTRACTIVE ATIC STRUCTURAL GROWTH DRIVERS 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 growth SKUs & e
Slide 25: ATIC Growth Accelerators
ATIC GROWTH ACCELERATORS ATTRACTIVE ATIC STRUCTURAL GROWTH DRIVERS INCREASE IN NEW CLIENTS HIGHER INVESTMENTS IN SAFER SUPPLY HIGHER INVESTMENTS IN INNOVATION STEP CHANGE IN SUSTAINABILITY HIGHER GROWTH IN THE WORLD OF ENERGY 25
Slide 26: Significant Growth in the Number of Companies Globally
SIGNIFICANT GROWTH IN THE NUMBER OF COMPANIES GLOBALLY UK 2020 & 2021 NORTH AMERICA Company Incorporations CHINA 2022 U.S. Monthly +13% vs. 2019 8.5m New Private Enterprises New Business Applications France established in 2021, +12% YoY +100k per month vs. pre 2020 average 1m Business Creations in 2
Slide 27: Increased Corporate Investment in Safer Supply Chains
INCREASED CORPORATE INVESTMENT IN SAFER SUPPLY CHAINS COVID 19 HAS MADE THE CASE FOR RISK BASED QUALITY ASSURANCE STRONGER LACK OF DATA, PROCESSES & SEVERE SUPPLY CHAIN DISRUPTIONS UNIDENTIFIED INTRINSIC RISKS INDEPENDENT ASSURANCE 87%* OF COMPANIES WILL INVEST TO MAKE THEIR SUPPLY CHAINS MORE RESIL
Slide 28: Innovation Acceleration in Products, Services & Technologies
INNOVATION ACCELERATION IN PRODUCTS, SERVICES & TECHNOLOGIES GLOBAL INNOVATION IS ACCELERATING The significant advancements in technology of the past 20 years and the generational shift in Energy & Sustainability is creating a historic inflection point for Innovation and Capital Spending The world w
Slide 29: Positive Regulatory Momentum for Sustainability
POSITIVE REGULATORY MOMENTUM FOR SUSTAINABILITY NORTH AMERICA EUROPE & UK GREATER CHINA Existing/Coming into Force Regulations: Existing Existing/Coming into Force Regulations: Existing/Coming into Force Regulations: • Nasdaq Board Diversity listing rules • EU Sustainable Finance Disclosure Regulati
Slide 30: World of Energy Growth Opportunities
WORLD OF ENERGY GROWTH OPPORTUNITIES Growth in O&G Under investment in O&G Technology and long-term Increase in global energy downstream trade flows Pathway to Net Zero Exploration & Production investments required to demand (GDP & and infrastructure requires significant and lack of build scale rene
Slide 31: Well Positioned to Seize Growth Acceleration in Our End Markets
WELL POSITIONED TO SEIZE GROWTH ACCELERATION IN OUR END MARKETS UNTAPPED SCIENCE BASED POWERFUL HIGH EVER BETTER DISCIPLINED CUSTOMER PORTFOLIO PERFORMANCE PERFORMANCE INVESTMENTS FOR POTENTIAL EXCELLENCE EARNINGS & CASH MANAGEMENT GROWTH COMPOUNDER • Passionate Customer • Scale operations with • St
Slide 32: We Are Successfully Scaling Up Our Investments in Growth
WE ARE SUCCESSFULLY SCALING UP OUR INVESTMENTS IN GROWTH ORGANIC INNOVATIONS M&A INVESTMENTS CONNECTED WORLD GEOGRAPHIC EXPANSION SUSTAINABILITY WORLD OF ENERGY SAAS PLATFORMS FOOD & HOSPITALITY Insert Footer Here 132 0
Slide 33: High Performance Earnings and Cash Compounder Model
HIGH PERFORMANCE EARNINGS AND CASH COMPOUNDER MODEL SCIENCE-BASED CUSTOMER EXCELLENCE IN QUALITY, SAFETY & SUSTAINABILITY USP Our Assurance Testing Inspection Certification Services Our Sectors Our Outlook Growth GDP+ GDP Growth Long-Term Growth GDP+ Organic Revenue Growth in Real Terms Value Creati
Slide 34: A High Quality Growth Business Creating Sustainable Value for All
A HIGH QUALITY GROWTH BUSINESS CREATING SUSTAINABLE VALUE FOR ALL A CLEAR PURPOSE ACCELERATING MARKET • Bringing Quality, Safety and Sustainability GROWTH to Life • New TQA clients • Leading ATIC solutions critical to society • Investments in safer supply • Sustainability Excellence. Committed to •
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