TIDMITRK
RNS Number : 3900U
Intertek Group PLC
23 November 2023
TRADING STATEMENT
23 November 2023
ROBUST DEMAND FOR INTERTEK ATIC SOLUTIONS - ON TRACK TO DELIVER
2023 TARGETS
-- YTD revenue of GBP2.77bn, growth of 7.3% at CCY with broad-based LFL revenue growth of 6.3%
-- 5.2% LFL revenue growth at CCY in July-Oct : LFL of 6.9% in
Corporate Assurance, Health and Safety, Industry and
Infrastructure, and World of Energy combined; Consumer Products LFL
of 1%
-- Recent acquisitions in high growth, high margin segments
performing well ; YTD revenue contribution of GBP26m
-- Margin progression driven by pricing initiatives, good
operating leverage and disciplined cost controls
-- Disciplined performance management delivering strong cash flow and a robust balance sheet
-- Investing in organic and inorganic growth opportunities with
an accretive capital allocation policy
-- Confirming 2023 outlook : Mid-single digit LFL revenue growth
at CCY, margin progression and strong free cash flow
-- Intertek AAA differentiated growth strategy in place to
unlock the significant value growth opportunity ahead
Revenue Growth LFL Revenue Growth
YTD 23 YTD 23 Jul-Oct23 YTD 23
========== ========== ========== ==========
Change at Change at Change at Change at
CCY(1) AR(2) CCY(1) CCY(1)
========== ========== ========== ==========
Group 7.3% 5.1% 5.2% 6.3%
========== ========== ========== ==========
Consumer Products 1.1% (2.7%) 1.0% 1.1%
========== ========== ========== ==========
Corporate Assurance 10.5% 7.6% 6.6% 10.0%
========== ========== ========== ==========
Health and Safety 8.5% 7.8% 6.5% 6.5%
========== ========== ========== ==========
Industry and Infrastructure 8.5% 7.1% 5.7% 8.5%
========== ========== ========== ==========
World of Energy 12.1% 11.1% 8.7% 8.5%
========== ========== ========== ==========
(1. Constant currency 2. Actual rates)
André Lacroix: Chief Executive Officer statement
"The Group has delivered 7.3% revenue growth on a YTD basis at
CCY, driven by 8.5% LFL revenue growth in Corporate Assurance,
Health and Safety, Industry and Infrastructure, and the World of
Energy combined, while LFL for Consumer Products was 1.1%. Recent
acquisitions in high-growth, high-margin segments are performing
well, benefitting from the scale-up opportunities in our global
network. We are on-track to deliver our 2023 FY target of
mid-single digit LFL revenue growth at CCY, with margin accretion
and strong free cash flow performance enabling us to deliver an
excellent ROIC.
I would like to recognise my colleagues for their passion,
commitment and innovation, delivering a robust financial
performance in the first ten months of the year. We have delivered
the highest LFL revenue growth in the last 10 years at CCY,
benefitting from the robust demand for our ATIC solutions. We have
seen margin progression driven by our pricing initiatives, good
operating leverage and our disciplined cost approach. Our strong
free cash flow combined with our robust balance sheet enables us to
invest in growth and accelerate performance.
Our clients are increasing their focus on Risk-based Quality
Assurance to operate with higher standards on quality, safety and
sustainability in each part of their value chain, triggering a
higher demand for our ATIC solutions which are powered by our
Science-based Customer Excellence ATIC advantage. We have made
significant progress on our portfolio, which is poised for faster
growth with all our global business lines expected to benefit from
attractive structural growth drivers while the majority of our
local businesses are exposed to fast growth opportunities.
Earlier this year, we unveiled our Intertek AAA differentiated
growth strategy to capitalise on the best-in-class operating
platform we have built and target the areas where we have
opportunities to get better. Our passionate, innovative, and
customer-centric organisation is laser-focused to take Intertek to
greater heights putting our AAA strategy in action and deliver
sustainable growth and value for all stakeholders. We are targeting
mid-single digit LFL revenue growth, margin accretion to go back to
our 17.5% peak margin and beyond, and strong cash generation, while
pursuing disciplined investments in attractive growth and margin
sectors.
We operate a differentiated, high-quality growth business with
excellent fundamentals and intrinsic defensive characteristics,
giving our customers the Intertek Science-based ATIC advantage to
strengthen their businesses. Our leading ATIC solutions are
mission-critical for the world to operate safely and the growth in
our end-markets is accelerating. The implementation of our Intertek
AAA differentiated growth strategy will capitalise on our
high-quality earnings and cash compounder model to unlock the
significant value growth opportunity ahead."
Intertek Group plc ("Intertek" or "the Group"), a leading Total
Quality Assurance provider to industries worldwide, today releases
its November Trading Update for the period from 1 January to 31
October 2023 ("period"). All comparative comments in this statement
reflect comparisons with the corresponding period during 2022. The
Group's full year results to 31 December 2023 will be announced on
5 March 2024.
Revenue Performance - 5 divisions
10 months - January to October 4 months - July to October
=========================================================
2023 2022 Change Change 2023 2022 Change Change
GBPm GBPm at at constant GBPm GBPm at at constant
actual currency actual currency
rates rates
========== ========== =========== ========================= =========== ========== ========== ====================
Group
Revenue 2,765.7 2,632.4 5.1% 7.3% 1,125.7 1,140.7 (1.3%) 5.9%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 2,739.8 2,632.4 4.1% 6.3% 1,118.1 1,140.7 (2.0%) 5.2%
========== ========== =========== ========================= =========== ========== ========== ====================
Consumer products
Revenue 779.5 801.3 (2.7%) 1.1% 311.6 338.4 (7.9%) 1.0%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 779.5 801.3 (2.7%) 1.1% 311.6 338.4 (7.9%) 1.0%
========== ========== =========== ========================= =========== ========== ========== ====================
Corporate Assurance
Revenue 391.9 364.3 7.6% 10.5% 160.1 160.1 - 7.6%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 390.4 364.3 7.2% 10.0% 158.6 160.1 (0.9%) 6.6%
========== ========== =========== ========================= =========== ========== ========== ====================
Health and Safety
Revenue 269.6 250.1 7.8% 8.5% 112.9 107.7 4.8% 9.3%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 264.6 250.1 5.8% 6.5% 110.0 107.7 2.1% 6.5%
========== ========== =========== ========================= =========== ========== ========== ====================
Industry and infrastructure
Revenue 721.8 674.2 7.1% 8.5% 294.8 299.0 (1.4%) 5.7%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 721.8 674.2 7.1% 8.5% 294.8 299.0 (1.4%) 5.7%
========== ========== =========== ========================= =========== ========== ========== ====================
World of Energy
Revenue 602.9 542.5 11.1% 12.1% 246.3 235.5 4.6% 10.2%
========== ========== =========== ========================= =========== ========== ========== ====================
Like-for-like
revenue 583.5 542.5 7.6% 8.5% 243.1 235.5 3.2% 8.7%
========== ========== =========== ========================= =========== ========== ========== ====================
Revenue Performance - PTR
10 months - January to October 4 months - July to October
===========================================================
2023 2022 Change Change 2023 2022 Change Change
GBPm GBPm at at constant GBPm GBPm at at constant
actual currency actual currency
rates rates
========== ========== ========== ========================= =========== ========== ========== ======================
Group
Revenue 2,765.7 2,632.4 5.1% 7.3% 1,125.7 1,140.7 (1.3%) 5.9%
========== ========== ========== ========================= =========== ========== ========== ======================
Like-for-like
revenue 2,739.8 2,632.4 4.1% 6.3% 1,118.1 1,140.7 (2.0%) 5.2%
========== ========== ========== ========================= =========== ========== ========== ======================
Products
Revenue 1,721.4 1,674.6 2.8% 5.0% 698.4 723.6 (3.5%) 3.8%
========== ========== ========== ========================= =========== ========== ========== ======================
Like-for-like
revenue 1,719.9 1,674.6 2.7% 5.0% 696.9 723.6 (3.7%) 3.5%
========== ========== ========== ========================= =========== ========== ========== ======================
Trade
Revenue 550.6 523.9 5.1% 6.8% 224.9 224.3 0.3% 6.6%
========== ========== ========== ========================= =========== ========== ========== ======================
Like-for-like
revenue 545.6 523.9 4.1% 5.8% 222.0 224.3 (1.0%) 5.3%
========== ========== ========== ========================= =========== ========== ========== ======================
Resources
Revenue 493.7 433.9 13.8% 16.7% 202.4 192.8 5.0% 13.0%
========== ========== ========== ========================= =========== ========== ========== ======================
Like-for-like
revenue 474.3 433.9 9.3% 12.1% 199.2 192.8 3.3% 11.2%
========== ========== ========== ========================= =========== ========== ========== ======================
Contacts
For further information, please contact:
Denis Moreau, Investor Relations
Telephone: +44 (0) 20 7396 3415 investor@intertek.com
Jonathon Brill/James Styles, Dentons Global Advisors
Telephone: +44 (0)7510 385 554 intertek@dentonsglobaladvisors.com
Analysts' Call
A live audiocast for analysts and investors will be held today
at 7.45am UK time; +44 (0) 33 0551 0200 ( Link to audiocast ).
Details can be found at http://www.intertek.com/investors/ together
with a pdf copy of this report. A recording of the audiocast will
be available later in the day.
Intertek is a leading Total Quality Assurance provider to industries worldwide.
Our network of more than 1,000 laboratories and offices in more than 100
countries, delivers innovative and bespoke Assurance, Testing, Inspection
and Certification solutions for our customers' operations and supply chains.
Intertek is a purpose-led company to Bring Quality, Safety and Sustainability
to Life. We provide 24/7 mission-critical quality assurance solutions to
our clients to ensure that they can operate with well-functioning supply
chains in each of their operations.
Our Customer Promise is: Intertek Total Quality Assurance expertise, delivered
consistently, with precision, pace and passion, enabling our customers
to power ahead safely.
intertek.com
Consumer Products Division
In the four-month period to end October 2023, our Consumer
Products-related business delivered LFL revenue of GBP311.6m, up
YoY by 1% at CCY enabling us to deliver a LFL revenue of GBP779.5m
on YTD basis, up YoY at CCY by 1.1% and down YoY by 2.7% at actual
rates.
-- Our Softlines business delivered a low-single digit negative
LFL revenue in the period resulting in a stable LFL revenue
performance YTD as ATIC investments by our clients in e-commerce,
risk-based Quality Assurance and end-to-end sustainability have
been offset by a slow-down in new product development given that
most retailers in North America and Europe remain focused on
reducing inventory.
-- Hardlines reported a low-single digit negative revenue
performance in the period and stable LFL revenue growth on a YTD
basis as ATIC investments by our clients in e-commerce and
sustainability have been offset by lower investments in new product
development from our major customers in North America and
Europe
-- With increased ATIC activities driven by greater regulatory
standards in energy efficiency, more demand for medical devices and
5G investments, our Electrical & Connected World business
delivered high-single digit LFL revenue growth in the period
resulting in a mid-single digit LFL revenue growth YTD.
-- Our Government & Trade Services business provides
certification services to governments in the Middle East and Africa
to facilitate the import of goods in their markets, based on
acceptable quality and safety standards. The business reported
double-digit negative LFL revenue growth both in the period and YTD
as increasing client supply chain activities were offset by the
non-renewal of two major contracts last year.
Full Year growth outlook
In 2023, we expect our Consumer Products division to deliver
low-single digit LFL revenue growth at constant currency.
Mid to long-term growth outlook
Our Consumer Products division will benefit from growth in new
brands, SKUs & ecommerce, increased regulation, a greater focus
on sustainability and technology, as well as a growing middle
class.
Our mid to long-term guidance at CCY for Consumer Products is
low to mid-single digit.
Corporate Assurance Division
In the four-month period to end October 2023, our Corporate
Assurance-related business delivered a LFL revenue of GBP158.6m, up
YoY by 6.6% at CCY enabling us to deliver a LFL revenue of
GBP390.4m on a YTD basis, up YoY at CCY by 10.0% and up by 7.2% YoY
at actual rates.
Business Assurance delivered high-single digit LFL revenue
growth in the period and double-digit LFL revenue growth on YTD
basis driven by increased investments by our clients to improve the
resilience of their supply chains, the continuous focus on ethical
supply and the greater need for sustainability assurance.
The Assuris business reported negative mid-single digit LFL
revenue performance in the period due a base-line effect in 2022.
However, LFL revenue is stable on a YTD basis as we continue to
benefit from improved demand for our regulatory assurance solutions
and from increased corporate investment in ESG.
Full Year growth outlook
In 2023, we expect our Corporate Assurance division to deliver
high-single digit LFL revenue growth at constant currency.
Mid to long-term growth outlook
Our Corporate Assurance division will benefit from a greater
corporate focus on sustainability, the need for increased supply
chain resilience, enterprise cyber-security, People Assurance
services and regulatory assurance.
Our mid to long-term LFL guidance at CCY for Corporate Assurance
is high-single digit to double-digit.
Health and Safety Division
In the four-month period to end October 2023, our Health and
Safety-related business delivered LFL revenue of GBP110.0m, up YoY
by 6.5% at CCY. YTD LFL revenue of GBP264.6m is up YoY at CCY by
6.5% and up YoY by 5.8% at actual rates.
-- AgriWorld provides inspection activities to ensure that the
global food supply chain operates fully and safely. The business
reported mid-single digit LFL revenue growth both in the period and
on YTD basis as we continue to see an increase in demand for
inspection activities driven by sustained growth in the global food
industry.
-- Our Food business registered mid-single digit LFL revenue
growth in the period and high-single digit LFL revenue growth on
YTD basis as we continue to benefit from higher demand for food
safety testing activities as well as hygiene and safety audits in
factories.
-- In Chemicals & Pharma we saw mid-single digit LFL revenue
growth in the period and on YTD basis reflecting improved demand
for regulatory assurance and chemical testing and from the
increased R&D investments of the pharma industry.
Full Year growth outlook
In 2023, we expect our Health and Safety division to deliver
mid-single digit LFL revenue growth.
Mid to long-term growth outlook
Our Health and Safety division will benefit from the demand for
healthier and more sustainable food to support a growing global
population, increased regulation, and new R&D investments in
the pharma industry.
Our mid to long-term LFL guidance at CCY for Health and Safety
division is mid to high-single digit.
Industry and Infrastructure Division
In the four-month period to end October 2023, our Industry and
Infrastructure-related business delivered LFL revenue of GBP294.8m,
YoY growth of 5.7% at CCY enabling us to deliver a LFL revenue of
GBP721.8m on YTD basis, up YoY at CCY by 8.5% and up YoY by 7.1% at
actual rates.
Industry Services includes our Capex Inspection services and
Opex Maintenance services. The Capex Inspection business delivered
double-digit LFL revenue growth in the period and on YTD basis as
we benefitted from increased capex investment in traditional Oil
and Gas exploration and production as well as in renewables. With
our clients increasing their maintenance efforts to increase the
productivity of existing production assets, we delivered
double-digit LFL revenue growth in the period and on YTD basis in
Opex Maintenance.
The continuing high demand for testing and inspection activities
drove high-single digit LFL revenue growth in the period and
double-digit LFL revenue growth on YTD basis in our Minerals
business.
Growing demand for more environmentally friendly buildings and
the increased number of infrastructure projects in North America
produced low-single digit LFL revenue growth in the period and on
YTD basis for our Building & Construction business.
Full Year growth outlook
In 2023, we expect our Industry & Infrastructure related
businesses to deliver high-single digit LFL revenue performance at
constant currency.
Mid to long-term growth outlook
Our Industry & Infrastructure division will grow in the mid
to long-term, benefitting from increased global energy consumption,
the transition to greener energy, population growth, large scale
infrastructure investment, and demand for Greener buildings.
Our mid to long-term LFL guidance at CCY for Industry and
Infrastructure is mid to high-single digit.
World of Energy Division
In the four-month period to end October 2023, our World of
Energy-related business delivered LFL revenue of GBP243.1m, up YoY
by 8.7% at CCY. YTD LFL revenue of GBP583.5m is up YoY at CCY by
8.5% and up 7.6% at actual rates.
Caleb Brett, the global leader in the Crude Oil and Refined
products global trading markets, benefitted from improved momentum
driven by increased global mobility and higher testing activities
for biofuels with double-digit LFL revenue growth in the period and
on a YTD basis.
Transportation Technologies delivered a low-single digit LFL
revenue growth in the period and mid-single digit LfL revenue
growth on YTD basis driven by increased investment in new
powertrains to lower CO2/NOx emissions and in traditional
combustion engines to improve fuel efficiency.
Our CEA business continued to benefit from the increased
investments in solar panels which is the fastest growing form of
renewable energy and delivered a double-digit LFL revenue growth in
the period and YTD.
Full Year growth outlook
In 2023, we expect our World of Energy division to deliver
high-single digit LFL revenue growth at constant currency.
Mid to long-term growth outlook
The World of Energy division will benefit from increased
investment from energy companies to meet growing demand and
consumption of energy from the growing global population, the
scaling up of Renewables, increase R&D investments that OEMs
are making in EV/Hybrid vehicles and from the development greener
fuels.
Our mid to long-term LFL guidance at CCY for the World of Energy
division is low to mid-single digit.
Innovation
True to our pioneering spirit, we continue to lead the industry
and innovate to meet the emerging needs of our customers with
winning ATIC solutions.
We are constantly learning from our customers, using extensive
feedback they provide us every month with our extensive NPS
research programme to help us deliver ever better solutions to
their evolving requirements.
We believe that successful innovation starts with investing in
the insight advantage, which means having a deep understanding of
what our customers need and want. With the ability to access
world-class customer intelligence site-by-site from anywhere across
our global network, we have a continuous stream of data that
enables us to build on our insights and use this to develop new
ATIC solutions.
Recently we launched a new certification mark that aims to give
consumers transparency regarding the claims made by the
manufacturers and marketers of vegan foods. This is a timely
introduction given the exponential global growth in the number of
consumers who are exploring a plant-based diet as part of a
healthier lifestyle with a reduced environmental impact.
Sustainability-related innovations include Intertek EcoCheck, a
tourism solution that audits management systems and is supported by
our capabilites to deliver accessibility, circularity and carbon
emission accounting services.
Launched earlier this year, Global Market Access (GMA) is
designed to help retailers and brands of soft goods, hard goods and
personal protective equipment to understand and comply with the
different regulations in force in different markets across the
world. GMA is a one-stop digital knowledge portal, developed with
the aim of increasing compliance for improved consumer safety and
protecting corporate reputations in today's interconnected
world.
Earlier this month, we launched an exciting digital innovation
iCare in Turkey. This new pioneering one-stop digital platform
delivers customer excellence to fashion manufacturers in a few
clicks. In today's increasingly digital world, manufacturers expect
seamless and efficient communication with testing service
providers. iCare fulfils this expectation by providing customers
with full transparency and real-time information about the status
and progress of their submitted samples. Through iCare, customers
can effortlessly manage all their testing projects on one
centralised platform, accessible 24/7.
Sustainability
Sustainability is the movement of our time and is central to
everything we do at Intertek, anchored in our Purpose, our Vision,
our Values and our strategy.
Sustainability is important to all stakeholders in society who
are consistently demanding faster progress and greater transparency
in sustainability reporting. Companies everywhere therefore
continuously need to upgrade and reinvent how they manage their
sustainability agenda, particularly with regard to how they
disclose their performance.
This is why, under our global Total Sustainability Assurance
(TSA) programme, we provide our clients with proven independent,
systemic and end-to-end assurance on all aspects of their
sustainability strategies, activities and operations.
The TSA programme comprises three elements:
-- Intertek Operational Sustainability Solutions
-- Intertek ESG Assurance
-- Intertek Corporate Sustainability Certification
For ourselves at Intertek, we focus on 10 highly demanding TSA
sustainability standards which are truly end-to-end and
systemic.
You can read in detail about our Sustainability Excellence
agenda and results in our 2022 Sustainability Report, which
included:
-- Continuous progress on Health and Safety with a reduction of
7bps in our Total Recordable Incident Rate vs 2021.
-- Since 2015, we have used the Net Promoter Score ('NPS')
process to listen to our customers that has enabled us to improve
our customer service over the years consistently.
-- We are driving environmental performance across our
operations through new science-based reduction targets to 2030 as
well as site-by-site action plans. Our rigorous monthly performance
management of our net zero plans against emission reduction targets
has delivered total CO2e emissions (market-based) reductions of
7.8% vs 2021.
-- We recognise the importance of employee engagement in driving
sustainable performance for all stakeholders, and we measure
employee engagement against our Intertek ATIC Engagement Index. Our
2022 score was 80.
-- Our voluntary permanent employee turnover was at a low rate of 14%.
At the end of August, we were pleased to announce that the
Group's near-term greenhouse gas (GHG) emissions reduction targets
have been approved by the Science Based Targets initiative (SBTi).
Through the validation of its scope 1, scope 2 and scope 3 targets,
the SBTi found Intertek to be in line with the ambition to limit
global temperature increases to 1.5degC above pre-industrial
levels.
Intertek is committed to:
-- reducing absolute scope 1 and 2 GHG emissions by 50% by 2030 from a 2019 base year;
-- reducing absolute scope 3 GHG emissions from business travel
and employee commuting by 50% within the same timeframe;
-- ensuring 70% of its suppliers by spend will have science-based targets by 2027.
This achievement serves to reconfirm Intertek's commitment to
sustainable growth and acknowledges the Group's ongoing efforts to
limit the effects of climate change as part of the Race to
Zero.
M&A
We are investing inorganically to seize the attractive growth
opportunities in the global Quality Assurance market and to
strengthen our ATIC portfolio in high-margin, high-growth
areas.
Our recent acquisitions, SAI Global Assurance, JLA Brasil
Laboratório de Análises de Alimentos S.A. and Clean Energy
Associates LLC and Controle Analtico have been successfully
integrated and are performing well and in line with our
expectations.
In August, we announced the acquisition of US-based PlayerLync,
a leading provider of high-quality mobile-first training and
learning content to frontline workforces at some of the world's
leading consumer brands, strengthening our position as a leader in
SaaS-based, technology- enabled People Assurance services. We
invested in our People Assurance business with the acquisition of
Alchemy/Wisetail in 2018, and PlayerLync provides a compelling
opportunity to further enhance our differentiated TQA proposition
and customer excellence advantage in what is a fast-evolving
landscape. As the deskless frontline workforce continues to grow,
software-based technology solutions that deliver learning,
communications and engagement are ever more important and the
combination of Wisetail and PlayerLync are exceptionally
well-placed to address those needs.
We will continue to look at M&A opportunities in attractive
high-margin and high-growth areas to broaden our ATIC portfolio of
solutions with new services we can offer to our clients and to
expand our regional coverage.
Outlook 2023
In 2023, we continue to expect the Group will deliver mid-single
digit LFL revenue growth at constant currency, with margin
progression year-on-year and a strong free cash flow
performance.
Our mid-single digit LFL revenue growth at constant currency
will be driven by the following contribution from our
divisions:
-- Consumer Products: Low-single digit
-- Corporate Assurance: High-single digit
-- Health and Safety: Mid-single digit
-- Industry and Infrastructure: High-single digit
-- World of Energy: High-single digit
Our financial guidance for 2023 is that we expect:
-- Capital expenditure in the range of GBP115-125m
-- Net Finance costs in the GBP40-42m range
-- Effective Tax Rate in the 25%-26% range
-- Minority interests of between GBP22-23m
-- FY23 financial net debt to be in the range of GBP630-680m
Currency has remained volatile, and we are updating our FY forex
guidance. The average Sterling rate since the beginning of the year
applied to our FY 2022 results, would reduce our FY revenue by
300bps and FY Earnings by 500bps.
Significant value growth opportunity
We have made strong progress in the last eight years, delivering
sustainable growth and value for our stakeholders and we are very
excited about the significant growth value opportunity ahead,
capitalising on our Science-based Customer Excellence ATIC
advantage. Our clients understand the mission-critical nature of
risk-based quality assurance to make their businesses stronger and
we have seen the demand for our ATIC solutions accelerate in the
last few years.
On 3 May 2023, at our Capital Markets event in London, we
announced our Intertek 30 AAA Growth Strategy to unlock the
significant value growth opportunity ahead.
True to our high performance 10X Culture, our Intertek AAA
differentiated growth strategy is about being the best and creating
significant value for every stakeholder, all the time. We want to
be the most trusted TQA partner for our customers, the employer of
choice with our employees, to demonstrate sustainability excellence
everywhere in our community and deliver significant growth and
value for our shareholders.
To seize the significant growth value opportunity ahead we will
be laser-focused on three strategic priorities and three strategic
enablers. Our Strategic Priorities are defined as Science-based
Customer Excellence TQA, Brand Push & Pull and Winning
Innovations, and our three Strategic Enablers are based on 10X
Purpose-based Engagement, Sustainability Excellence and Margin
Accretive Investments. We will both further improve where we are
already strong and address the areas where we can get better.
Our high-quality portfolio is poised for faster growth:
-- The depth and breadth of our ATIC solutions positions us well
to seize the increased opportunities arising from corporate needs
for Risk-based Quality Assurance
-- All of our global business lines have plans in place to seize
the exciting growth drivers in each of our divisions
-- At the local level, our local portfolio is strong, with the
majority of our revenues exposed to fast growth segments
-- Geographically we have the right exposure to the structural
growth opportunities across our global markets
We have improved our segmental disclosures to better reflect the
growth drivers in our businesses reporting revenue, operating
profit and margin in five divisions:
-- Consumer Products
-- Corporate Assurance
-- Health and Safety
-- Industry and Infrastructure
-- World of Energy
In terms of LFL revenue growth we are targeting Group mid-single
digit LFL revenue growth at constant currency with the following
expectations by division:
-- Low- to mid-single digit in Consumer Products
-- High-single digit to double digit in Corporate Assurance
-- Mid- to high-single digit in Health and Safety
-- Mid- to high-single digit in Industry and Infrastructure
-- Low- to mid-single digit in the World of Energy
Margin accretive revenue growth is central to the way we deliver
value, and we are confident that over time we will return to our
17.5% peak margin performance and go beyond from there. Our
confidence is based on three simple reasons: we have the proven
tools and processes in place, we operate with a span of
performance, and we pursue a disciplined accretive portfolio
strategy.
To deliver sustainable growth and value we will stay focused on
our Intertek Virtuous Economics based on the compounding effect
year after year of mid-single digit LFL revenue growth, margin
accretive revenue growth, strong free cash-flow and disciplined
investments in high growth and high margin sectors.
We believe in the value of accretive disciplined capital
allocation and pursue the following priorities:
-- Our first priority is to support organic growth through
capital expenditure and investments in working capital (target
circa 5% of turnover in capex).
-- The second priority is to deliver sustainable returns for our
shareholders through the payment of progressive dividends and we
target a pay-out ratio of circa 50%.
-- The third priority is to pursue M&A activities that
strengthen our portfolio in attractive growth and margin areas,
provided we can deliver good returns.
-- And our fourth priority is to maintain an efficient balance
sheet with flexibility to invest in growth. Our leverage target is
1.3 - 1.8 net debt to EBITDA with the potential to return excess
capital to shareholders subject to our future requirements and
prevailing macro environment.
Our good to great journey continues to unlock the significant
value growth opportunity ahead.
-ENDS-
The 2023 November Trading Statement Audiocast CEO Script will be
available after the call at www.intertek.com/investors/
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END
TSTKLLFLXFLXFBV
(END) Dow Jones Newswires
November 23, 2023 02:00 ET (07:00 GMT)
Grafico Azioni Intertek (LSE:ITRK)
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Da Ott 2024 a Nov 2024
Grafico Azioni Intertek (LSE:ITRK)
Storico
Da Nov 2023 a Nov 2024
