AUDIOCAST 9.

30AM UK – 2 August 2024

2024 Half Year Results Script

Introduction

Good morning to you all and thanks for joining us on our call.

I have with me Colm Deasy, our CFO and Denis Moreau our VP of Investor Relations.

I would like to start our call today recognising all my colleagues for having delivered a strong
performance in the first half of the year with double digit growth in operating profit, EPS
and free cash flow.

1
CAUTIO ARY STAT M T R ARDI
OR ARD OOKI STAT M TS

2
Here are the key take aways from our call today:
• W LFL 6 1%
• W Y Y 11

• EPS 17 5%
• E 118% fl Y Y 1 %
• W RO C
%
• 65% 3%
• W
•

3
Performance Highlights

1 3 5
P 1 F L S
R R O

L ’

4
 STRO R ORMA C

Y Y Y Y
H 24 H 23
C sta t rates Actual rates

R £1 669 5 £1 6 6 6% 1 8%
L £1 659 6 £1 637 5 6 1% 1 3%
O P 1 £ 65 1 £ 5 1 % 8 %
O 1 15 9% 15 % 11 9
EPS 1 9 95 17 5% 1 %
RO C % 19 3% 11
F C F £9 6 £79 6 13 8%
D 53 9 37 7 3 %
F E D 1 11

1 5

We have delivered a strong financial performance in the first half of 2024 with:
• 6 6% 1 8%
• LFL 6 1%
• O 1 % 8 %
• 15 9% 11 9
• EPS 17 5% 1 %
• RO C % 11
• fl £91 Y Y 1 %
• 53 9 3 %
• O E D 1

5
L ’ LFL 6.1% was broad based
with:
• C P 6 %
• C 8 3%
• S 8 5%
• %
• W E 8 3%

Our LFL revenue growth was driven by both volume and price.

We have enjoyed an acceleration of our underlying LFL growth in May-June. Adjusting for
the two fewer working days in the period, our LFL growth was close to 9% in May-June and
7.7% for H1 24.

’ reat to see the demand for our ATIC solutions accelerating with a 2-year revenue
growth of 13.2%.

6
The JLA, CEA, PlayerLync and Base Met Labs acquisitions we have made to scale up our
portfolio in high growth and high margin sectors are performing well.

The consolidation opportunities in our industry are significant, and we will continue to
invest in inorganic growth.

7
Margin accretive revenue growth is central to the way we deliver value, and our disciplined
performance management has resulted in a margin progression of 110bps at constant rates
to 15.9%.

We benefitted from mix, pricing, fixed cost leverage linked to growth, productivity
improvements and our restructuring programme while continuing to invest in our ATIC
capability for growth.

Looking at our performance by division, we made good progress improving margin by more
than 100bps in three of the five divisions.

Last year, we announced a multi-year cost reduction programme to target productivity

opportunities based on operational streamlining and technology upgrade initiatives.

The implementation of this programme is on track, and after having delivered a cost
reduction benefit of £13m in 2023, we expect a full year benefit of £11m in 2024 based on
£5m in H1 and £6m in H2.

8
The compounding effect of all our margin initiatives has enabled us to deliver a 2-year
margin progress of 180bps.

9
H1 24 Financial Results

I will now handover to Colm to discuss our H1 results in detail.

10
Thank you, André.

In H1 2024, the Group delivered a strong financial performance.

Total revenue growth was 6.6% at constant currency and 1.8% at actual rates as Sterling
strengthened compared to major currencies that impacted our revenue growth by (480bps).

Operating profit at constant rates was up 14.2% to £265.1 million, delivering a margin of
15.9%, up year-on-year by 110bps at constant currency and 90bps at actual rates. Diluted
earnings per share were 104.9p, growth of 17.5% at constant rates and 10.2% at actual
rates.

11
Our cash conversion was strong, and we delivered an Adjusted free cash flow of £90.6m up
year on year by 14%.

We finished H1 24 with financial net debt of £708.2m, which is down year on year and
represents a financial net debt to adjusted EBITDA ratio of 1.0x.

12
Now turning to our financial guidance for 2024.

We expect net finance costs to be in the range of £41-43m. We expect our effective tax rate
to be between 25%-26%, our minority interest to be between £23-24m, and capex
investment to be in the range of £135-145m.

Our financial net debt guidance, excluding future change in FX rates or M&A is £510- 560m.

I will now hand back to André.

13
Business Lines Review

Thank you, Colm

I will now summarise our performance by division.

All comments I will make in this section will be at constant rates.

14
Our Consumer Products-related business delivered a revenue of £468m, up 6% year on year.

Our mid-single digit LFL performance was driven by:

• LFL S ft
• LFL
• LFL E &C W
• LFL S

Operating profit increased 12% to £123m with margin of 26.2%, up by 140bps.

In 2024, we continue to expect our Consumer Products division to deliver mid-single digit
LFL revenue growth.

15
We grew revenue in our Corporate Assurance-related business by 9.4% to £242.1m.

Our high-single digit LFL performance was driven by:

• LFL
• LFL

Operating profit of £52m was up year on year by 14% with a margin of 21.6%,
an improvement of 90bps.

FY24 expectations for our Corporate Assurance division are unchanged at high-single digit
LFL revenue growth.

16
Our Health and Safety-related business delivered revenues of £167m, an increase of 11%.

Our high-single digit LFL revenue growth performance was driven by:
• LFL C &P
• D LFL F

Operating profit rose 27% to £20m with a margin of 12.2% up YoY by 160bps.
Our Health and Safety division guidance is unchanged, and we expect to deliver high-single
digit LFL in FY24.

17
Our Industry & Infrastructure business reported revenues of £420.5m, an increase of 2.8%.

Our low-single digit LFL revenue growth performance was driven by:
• LFL S
• LFL
• S LFL &C

Operating profit of £37m was up 4% with a margin of 8.8%, up 10bps compared to last year.

In 2024, we expect our Industry and Infrastructure related businesses to deliver low-single
digit LFL revenue growth, given the slow-down in large infrastructure projects in the USA.

18
Revenue in our World of Energy-related businesses were £372m, 8% higher than last year.

Our high-single digit LFL revenue growth was driven by:

• LFL C tt
• L LFL
• D LFL CE

Operating profit was £33m, up 31%, margin rose 150bps to 8.8%.

In 2024, we continue to expect our World of Energy division to deliver high-single digit LFL
revenue growth.

19
AAA Strategy in Action

At our capital markets event last year, we shared with you our AAA differentiated strategy
for growth to unlock the significant value growth opportunity ahead.

20
In March, I gave you an update on why we expect faster LFL revenue growth for our ATIC
solutions, how we will deliver our 17.5%+ margin target, and how our high-quality earnings
model will deliver sustainable value creation.

21
Today, we would like to give you an update on three important investment areas to execute
our AAA growth strategy:
•
CC z

• S

• C

22
Supply chains never stand still, and we have seen several structural changes in the
operations of our clients in the last few decades.

Our mantra at Intertek is to always anticipate where our clients are taking their supply
chains using the circa 6,000 interviews we do with our customers every month, investing in
our global ATIC capability.

Our global footprint and our capital-light business model make us very agile, giving us the
ability to move fast if we need to build additional ATIC capability for our clients in existing or
new markets.

Over the years, we have invested in many markets to expand our global footprint.

This is how we have built a strong presence in Vietnam, India, Bangladesh, Cambodia, Egypt,
Türkiye, Greece, Morrocco, Guatemala, Brazil, Colombia, and Mexico.

23
There have been a lot of discussions about brands exiting their manufacturing footprint in
China.

We only have seen a handful of brands doing so as changing production location is high-risk
decision for any business.

China has a track record of manufacturing excellence, with good customer service as well as
planned long-term investments in new sectors such as energy storage, solar panels and EV’ .

’ Chinese export economy in 2023 was 37% larger than in 2019 and 46% in H1
24.

We operate a strong business in China that has demonstrated its ability to deliver mid-single
digit LFL revenue growth over the years including in H1 24.

24
What we have seen, is companies pursuing a China+1 strategy which consists of building
their supply chains for new businesses, in a new country, to operate a more diversified
footprint.

This has resulted in additional manufacturing investments in countries like Vietnam,

Cambodia, India, and Bangladesh, while China has invested in new sectors.

We also have seen investments in nearshoring to reduce the time to market and Co2
emissions, with the main beneficiaries being Egypt, Türkiye, Portugal, Morocco,
Guatemala and Mexico.

Finally, we are seeing onshoring investments in the renewables sector with

manufacturing investments in energy storage, solar, and wind which are strategic sectors for
the energy security of the European and North American markets.

25
Over the last three years, we have invested £330m in capex, to support our clients supply
chains in APAC, EMEA and the Americas, and this year we plan to invest another £135-
145m.

I would like now to give you a sense of the investments we have made to expand our global
ATIC footprint.

26
We operate an excellent ATIC portfolio in APAC which represents 35% of our revenue and
here you can get a sense of the type of investments we have made to broaden our ATIC
footprint.

I will not comment on all of these of course, and here are a few builds based on my recent
market visits.

• W P

• O
’ tt
• L

27
EMEA represents 26% of our revenue and these are the investments we have made
recently.

• W tt C E

• W
S ft
D
• UK EV
C E

28
The Americas is our largest region with 39% of the group revenue and we have invested
significantly in the last few years to take advantage of the ATIC demand acceleration.

• W L

• EV C E
EV

29
L ’ clients with our sustainability
solutions.

Sustainability is the movement of our time and corporations are increasing their focus on
this area.

These investments in sustainability are driven by an increase in the number of regulations

around the world as well as meeting the needs of more demanding consumers.

Our clients are facing some real challenges to take a strategic approach to sustainability and
we have developed industry leading end to end Total Sustainability Assurance solutions to
mitigate their operational, corporate and reputational risks.

30
We always advise our clients to start their sustainability journey at the heart of their value
chain.

We offer Industry leading Operational solutions that cover among others: R&D
development, tier 1/2/3 supplier sustainability performance, energy-waste-water-chemical-
air quality-safety management, carbon footprint assessment for scope 1/2/3 and Eco-
scoring of their products.

In simple terms, our operational sustainable solutions focus on the high risks inside the
value chain of our clients.

We also advise them to complement these with the right sustainability policies underpinned
by precise corporate processes which we can audit with our Corporate Sustainability
Certification programme.

31
The reputational risks for companies are significant, and we have seen recently world class
companies being fined by regulators for having made unsubstantiated claims about their
products.

’ e help our clients with our ESG assurance solutions which offers an
independent audit of their non-financial disclosures.

Every industry is different, and every industry has its own sustainability risks.

We therefore go to market with industry specific suites of end-to-end ATIC solutions that
address the specific needs of our clients in the areas of quality, safety and sustainability.

Let me give you a few concrete examples of how we work with our clients in a few
industries.

32
This is a visual representation of our ATIC solutions, for a company producing T-shirts and
we have highlighted in blue ’ operational sustainability
risks.

33
Here is our ATIC sustainability approach for a light bulb producer.

34
Here we are sharing our ATIC approach in the Food sector, in this case a Honey
manufacturer.

35
And, in this case we are sharing our ATIC approach for an Oil and Gas company producing
Sustainable Aviation Fuel.

36
L ’ our Tek-based ATIC solutions.

You would recall that during our capital markets event, we discussed the importance of
innovation and M&A to strengthen our customer service targeting high growth and high
margin spaces.

37
Today, I would like to give you an update on where we are in the digitisation of our ATIC
value proposition.

We believe in the importance of technology to augment the strengths of our ATIC solutions
with a superior digitised customer service.

We have made a lot of progress in that space and equally there is much more to go for
moving forward.

The benefits of a Tek-based ATIC solutions are significant:

• tt
• tt
•

I would like to now share how we have built a Tek-based ATIC advantage in three market
segments.

38
Let’s start with People Assurance which helps our clients identify and mitigate the skills gaps
they have at the operational levels.

We provide a comprehensive suite of audit, training, engagement solutions in a SAAS

delivery platform targeted at front line workers with Alchemy, Wisetail and PlayerLync.

We entered the adjacent ATIC space of People Assurance when we made the acquisition of
Alchemy six years ago, opening excellent new business opportunities in a high margin
sector.

39
Let’s now talk about a few examples of digital service delivery.

Within our Softlines and Hardlines business lines we have strengthened our customer value
proposition with the digitisation of our Inspection solutions with I2Q and of our testing
solutions with iCare.

Recently, we partnered with ESG Playbook which offers a digital platform for our clients to
collect and manage Carbon data.

40
The responsibility of companies within their own supply chain and their extended supply
chain is significant but very complex to manage. ’ our clients need Tek-enabled
supply chain traceability tools.

We launched a few years ago Inlight which helps companies manage their tier 1/2/3
suppliers in a very granular way to better identify and mitigate important risks.

We operate SourceClear which is an industry leading platform for chain of custody

traceability in the Textile industry.

Recently we partnered with Trade for Good to provide product level traceability and
products passport to our clients in consumer products.

We are pleased with the progress we have made to digitise our ATIC value proposition, and
we will continue to invest in technology to strengthen our Tek-based ATIC Advantage.

41
2024 Outlook

Before taking your questions, I would like to cover our guidance for 2024.

42
Given the strong performance we delivered in H1, we are entering H2 with confidence and
except to deliver a strong performance in 2024.

We expect the Group will deliver mid-single digit LFL revenue growth at constant currency
driven by:
• C P
• C S W E
• L

We are targeting year on year margin progression.

Our cash discipline will remain in place to deliver strong free cash flow.

We will invest in growth with Capex of circa £135-145m.

We expect our financial net debt to be in the range of £510-560m, before any
M&A or Forex movements.

43
A quick update on currencies for your model.

The average Sterling exchange rate in the last three months applied to the full
year results of 2023 would reduce our FY revenue and operating profit by circa 300bps and
400bps respectively.

44
We believe in the value of accretive disciplined capital allocation and during our Capital
Markets event last year, we discussed the approach we have in place.

We are very excited about the organic and inorganic investment opportunities.

Our investments will continue to be made with the same disciplined ROIC-driven approach.

45
In summary, our highly engaged, customer-centric organisation is laser-focused to take
Intertek to greater heights putting our AAA strategy in action.

To deliver sustainable growth and value for our shareholders, we will capitalise on our high-
quality cash compounder earnings model, benefiting year after year from the compounding
effect of MSD LFL revenue growth, margin accretion, strong free cash-flow and disciplined
investments in high growth and high margin sectors.

The value growth opportunity ahead is significant.

We will now take any questions you may have.

46