Slide 1: Strong performance with double digit growth in operating profit, EPS and free cash flow
STRONG PERFORMANCE WITH DOUBLE DIGIT GROWTH IN OPERATING PROFIT, EPS AND FREE CASH FLOW 2024 HALF YEAR RESULTS PRESENTATION 2 August 2024
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: Key takeaways
KEY TAKEAWAYS Broad-based Strong margin Double-digit Double digit Excellent Interim AAA Strong H2 LFL revenue performance EPS growth free cash flow ROIC dividend Strategy expected growth of 6.1%1 +110bps1 +17.5%1 growth +13.8% +220bps1 +43.0% on track 3 3 Note: (1) At constant currency
Slide 4: Performance Highlights
01 02 03 04 05 Performance H1 24 Financial Business Lines AAA Strategy 2024 Highlights Results Review in Action Outlook 4
Slide 5: Strong performance
STRONG PERFORMANCE YoY YoY H1 24 H1 23 (Constant rates) (Actual rates) Revenue £1,669.5m £1,640.0m 6.6% 1.8% Like-for-like revenue £1,659.6m £1,637.5m 6.1% 1.3% Operating Profit1 £265.1m £245.4m 14.2% 8.0% Operating Margin1 15.9% 15.0% 110bps 90bps EPS¹ 104.9p 95.2p 17.5% 10.2% ROIC 20.4% 19.3% 220b
Slide 6: Broad based LFL revenue growth of 6.1%
BROAD BASED LFL REVENUE GROWTH OF 6.1% 1 H1 2024 LFL growth1 by division H1 2-Year LFL growth1 by division 21.5% 16.5% 16.1% 13.2% 12.5% 8.3% 8.5% 8.3% 6.1% 6.0% 7.1% 2.2% Group Consumer Corporate Health & Industry & World of Group Consumer Corporate Health & Industry & World of Products Assurance S
Slide 7: Acquisitions in high growth and high margin sectors performing well
ACQUISITIONS IN HIGH GROWTH AND HIGH MARGIN SECTORS PERFORMING WELL Brazil │ July 2021 and April 2023 USA │ July 2022 USA │August 2023 North America │May 2024 Health & Safety World of Energy People Assurance Minerals Providers of food and environmental Provider of assurance services to solar P
Slide 8: Strong margin performance +110bps
STRONG MARGIN PERFORMANCE +110BPS 2 H1 24 Adjusted Operating Margin1 growth2 2-year Adjusted Operating Margin1 growth2 440bps 430bps 180bps 180bps 140bps 160bps 150bps 110bps 100bps 90bps 10bps 10bps Group Consumer Corporate Health and Industry and World of Group Consumer Corporate Health and Indust
Slide 9: H1 Financial Results
01 02 03 04 05 Performance H1 24 Financial Business Lines AAA Strategy 2024 Highlights Results Review in Action Outlook 9
Slide 10: Key P&L financials
KEY P&L FINANCIALS YoY YoY H1 2024 (Constant rates) (Actual rates) Revenue £1,669.5m 6.6% 1.8% Like-for-like revenue £1,659.6m 6.1% 1.3% Operating Profit1 £265.1m 14.2% 8.0% Operating Margin1 15.9% 110bps 90bps EPS¹ 104.9p 17.5% 10.2% Note: (1) Before separately disclosed items 10
Slide 11: Cash flow & net debt
CASH FLOW & NET DEBT £m @ actual exchange rates H1 2024 H1 2023 Adjusted operating profit1 265.1 245.4 Depreciation/amortisation 80.1 89.7 Change in working capital (89.9) (75.3) Other2 12.1 10.7 Adjusted cash flow from operations 267.4 270.5 Capex (55.6) (51.4) Income taxes paid (59.1) (56.0) Other
Slide 12: Financial guidance
FINANCIAL GUIDANCE FY 2024 Guidance Net finance cost (pre-fx) £41-43m Effective tax rate 25%-26% Minority interest £23-24m Diluted shares (as at 30 June 2024) 162.3m Capex £135-145m Financial Net Debt¹ £510-560m Note: (1) Net debt guidance before any material change in FX rates and any M&A 12
Slide 13: Business Lines Review
01 02 03 04 05 Performance H1 24 Financial Business Lines AAA Strategy 2024 Highlights Results Review in Action Outlook 13
Slide 14: Mid-single digit LFL growth in Consumer Products
MID-SINGLE DIGIT LFL GROWTH IN CONSUMER PRODUCTS Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 467.9 467.9 465.4 466.6 122.8 26.2 116.8 25.0 23 24 23 24 23 24 23 24 5.7% CCR 6.0% CCR 11.7% CCR 140bps CCR Flat 0.3% 5.1% 120bps H1 23 Actual LFL H1 24 Actual LFL G
Slide 15: High-single digit LFL growth in Corporate Assurance
HIGH-SINGLE DIGIT LFL GROWTH IN CORPORATE ASSURANCE Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 21.6 231.8 242.1 231.8 239.6 48.2 52.3 20.8 23 24 23 24 23 24 23 24 9.4% CCR 8.3% CCR 14.4% CCR 90bps CCR 4.4% 3.4% 8.5% 80bps H1 23 Actual LFL H1 24 Actual LFL Gr
Slide 16: High-single LFL growth in Health and Safety
HIGH-SINGLE LFL GROWTH IN HEALTH AND SAFETY Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 12.2 156.7 166.8 156.7 163.1 16.5 20.3 10.5 23 24 23 24 23 24 23 24 11.0% CCR 8.5% CCR 26.9% CCR 160bps CCR 6.4% 4.1% 23.0% 170bps H1 23 Actual LFL H1 24 Actual LFL Growth
Slide 17: Low-single digit LFL growth in Industry and Infrastructure
LOW-SINGLE DIGIT LFL GROWTH IN INDUSTRY AND INFRASTRUCTURE Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 427.0 420.5 427.0 37.3 8.8 418.1 36.8 8.7 23 24 23 24 23 24 23 24 2.8% CCR 2.2% CCR 4.0% CCR 10bps CCR (1.5%) (2.1%) (1.3%) 10bps H1 23 Actual LFL H1 24 Act
Slide 18: High-single digit LFL growth in World of Energy
HIGH-SINGLE DIGIT LFL GROWTH IN WORLD OF ENERGY Revenue (£m) Like-for-like Revenue (£m) Operating Profit1 (£m) Operating Margin1 (%) 8.8 356.6 372.2 356.6 372.2 26.6 32.9 7.5 23 24 23 24 23 24 23 24 8.3% CCR 8.3% CCR 31.1% CCR 150bps CCR 4.4% 4.4% 23.7% 130bps H1 23 Actual LFL H1 24 Actual LFL Growt
Slide 19: AAA Strategy in Action
01 02 03 04 05 Performance H1 24 Financial Business Lines AAA Strategy 2024 Highlights Results Review in Action Outlook 19
Slide 20: Being the best for every stakeholder. All the time.
Customers Be the most trusted TQA partner Being the best Shareholders Employees Employer of for every stakeholder. Sustainable growth and value Choice Every Day All the time. Community Sustainability Excellence Everywhere AAA MEDIUM-TERM TARGET: MSD LFL REVENUE GROWTH, 17.5%+ MARGIN AND STRONG CASH
Slide 21: AAA differentiated strategy for growth in action
AAA DIFFERENTIATED STRATEGY FOR GROWTH IN ACTION Investing in Sustainability is Building a our Global the movement Tek-based ATIC Capability of our time Advantage 21 21
Slide 22: Investing in our global ATIC capability
INVESTING IN OUR GLOBAL ATIC CAPABILITY Our Strategy Always anticipating the structural changes of our Clients and investing in our global ATIC capability 22
Slide 23: Investing in our global ATIC capability: client priorities
INVESTING IN OUR GLOBAL ATIC CAPABILITY Our Strategy Always anticipating the structural changes of our Clients and investing in our global ATIC capability Our Clients’ Priorities A more Diversified Footprint: China +1, Near Shoring and On Shoring 23
Slide 24: Investing in our global ATIC capability: APAC, EMEA, Americas
INVESTING IN OUR GLOBAL ATIC CAPABILITY Our Strategy Always anticipating the structural changes of our Clients and investing in our global ATIC capability Our Clients’ Priorities A more Diversified Footprint: China +1, Near Shoring and On Shoring Our investments to expand our Global ATIC Capability
Slide 25: APAC investing to support our clients' supply chains
APAC INVESTING TO SUPPORT OUR CLIENTS’ SUPPLY CHAINS APAC 35% Group Revenue1 Caleb Brett Minerals Minerals Australia LNG footprint expansion Launch of critical metals detection New KMS & ABRA mine sites Softlines Sustainability Softlines Bangladesh Enhanced analytical capabilities CSR expansion Chem
Slide 26: EMEA investing to support our clients' supply chains
EMEA INVESTING TO SUPPORT OUR CLIENTS’ SUPPLY CHAINS EMEA 26% Group Revenue1 Caleb Brett AgriWorld AgriWorld Egypt Enhanced additives capability New ISO17020-25 accreditation Enhanced fumigation offering Transportation Technologies World of Energy Electrical Germany Dedicated customer testing equip.
Slide 27: Americas investing to support our clients' supply chains
AMERICAS INVESTING TO SUPPORT OUR CLIENTS’ SUPPLY CHAINS AMERICAS 39% Group Business Assurance Caleb Brett AgriWorld Revenue1 Arg/Chi/Ecu New 14064/65 accred. in Arg. New oxigenates testing in Chile Expansion of capacity Caleb Brett Sustainability Food Brazil Centre of Excellence Environmental testi
Slide 28: Increased corporate focus on sustainability, accelerating regulatory landscape
INCREASED CORPORATE FOCUS ON SUSTAINABILITY ACCELERATING REGULATORY LANDSCAPE US SEC Climate Disclosure EU Energy Performance of Norway Transparency Act Buildings Directive China Mandatory ESG Reporting CA Supply Chain German Supply Chain Due Canada Bill: Child and Forced Transparency Diligence Act
Slide 29: Our end-to-end total sustainability assurance solutions
OUR END-TO-END TOTAL SUSTAINABILITY ASSURANCE SOLUTIONS Operational sustainability Corporate sustainability ESG assurance solutions certification 29
Slide 30: T-shirt - sustainability risk-based ATIC solutions
T-SHIRT - SUSTAINABILITY RISK-BASED ATIC SOLUTIONS SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3rd PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRE INSTORE ONLINE CONSUMER Global Organic Commercial & Textile Standard Functional Claims Retail Store Building Testing High Volume & Inspecti
Slide 31: Lightbulb - sustainability risk-based ATIC solutions
LIGHTBULB - SUSTAINABILITY RISK-BASED ATIC SOLUTIONS SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3rd PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRE INSTORE ONLINE CONSUMER Commercial & Functional Physical Claims Hazardous Testing & Material Market Chemical Assessment Surveillance Anal
Slide 32: Honey & bee products - sustainability risk-based ATIC solutions
HONEY & BEE PRODUCTS– SUSTAINABILITY RISK-BASED ATIC SOLUTIONS PRIMARY PRODUCER/ BEEKEEPER PURCHASER EXPORTER IMPORTER / BROKER PACKER RETAIL PRODUCTION LOGISTICS & DISTRIBUTION CENTRES PROCESSING SALES Production Product Good Beekeeping process monitoring Practices risk control, Quality & Raw mater
Slide 33: Sustainable aviation fuel - sustainability risk-based ATIC solutions
SUSTAINABLE AVIATION FUEL – SUSTAINABILITY RISK-BASED ATIC SOLUTIONS FEEDSTOCK REFINING TRADING COMMERCIAL END USE 3RD PARTY OWNED TRANSPORTATION STORAGE AIRPORTS INDUSTRY Soil, Water, Air Quality Blending (Environmental) inspection Testing Third Party Inspection, Engineering Testing quality of raw
Slide 34: M&A and innovation are core to our AAA growth strategy
M&A AND INNOVATION ARE CORE TO OUR AAA GROWTH STRATEGY 3 STRATEGIC PRIORITIES SCIENCE-BASED TQA CUSTOMER EXCELLENCE + BRAND PUSH & PULL + WINNING INNOVATIONS 3 STRATEGIC ENABLERS 10X PURPOSE-BASED ENGAGEMENT + SUSTAINABILITY EXCELLENCE + MARGIN ACCRETIVE INVESTMENTS 34
Slide 35: Building a Tek-based ATIC advantage through innovation and M&A
BUILDING A TEK-BASED ATIC ADVANTAGE THROUGH INNOVATION AND M&A Zero to 1 Amazing Margin Accretive Innovation (MAI) 1-100 First Mover Advantage WINNING INNOVATIONS 10X Global MAI TQA in a Few Clicks Tek Advantage Business line and geographic portfolio optimization MARGIN ACCRETIVE New services in hig
Slide 36: SaaS based People Assurance offering
SAAS BASED PEOPLE ASSURANCE OFFERING Comprehensive suite of learning, communication and engagement SAAS offering for frontline workers • Expanded Intertek’s global Assurance offering with tech-enabled training solutions for frontline Corporate workers across principally the food & beverage manufactu
Slide 37: Digital service delivery
DIGITAL SERVICE DELIVERY Leveraging digital solutions to deliver innovative solutions with a focus on improving the customer experience Consumer Robust online inspection management giving customers the power of informed decision-making. Products • Technology-based inspection • One-stop-shop for all
Slide 38: Tek-enabled supply chain traceability
TEK-ENABLED SUPPLY CHAIN TRACEABILITY Providing digital tools for our customers to deliver supply chain trust and traceability Leading platform that enables organisations to better understand their supply chain risks and Corporate protect their brand. Assurance • Web-based platform to identify, visu
Slide 39: 2024 Outlook
01 02 03 04 05 Performance H1 23 Financial Business Lines AAA Strategy 2024 Highlights Results Review in Action Outlook 39
Slide 40: Strong 2024 outlook
ROBUST STRONG2024 2024OUTLOOK OUTLOOK MSD LFL Revenue growth at CCY Consumer Products: MSD Corporate Assurance: HSD Health and Safety: HSD Industry and Infrastructure: LSD World of Energy: HSD Margin progression year-on-year Strong free cash flow Capex: £135-145m Financial net debt: £510-560m 40 Not
Slide 41: Disciplined capital allocation
ACCRETIVE DISCIPLINED CAPITAL ALLOCATION Capex and working capital investment to support organic growth 01 (target c.5% of revenue in capex) Sustainable shareholder returns through payment of progressive 02 dividends based on a target payout ratio of c.65% M&A focused on strong growth and margin pro
Slide 42: Significant value growth opportunity
SIGNIFICANT VALUE GROWTH OPPORTUNITY MSD LfL revenue growth Investments in Intertek high high-growth and quality cash Margin-accretive revenue growth high-margin sectors compounder earnings model Disciplined capital Strong free allocation cash flow 42
Slide 43: Intertek Total Quality. Assured.
ntertek Total Quality. Assured.