INTERTEK TOTAL QUALITY ASSURANCE. 28 September 2017

Transcription

1 INTERTEK TOTAL QUALITY ASSURANCE 28 September 2017

2 AGENDA 01 INTERTEK TQA STRATEGY 02 TQA GROWTH OPPORTUNITIES 03 TQA VALUE PROPOSITION 04 TQA DELIVERY 05 INTERTEK PERFORMANCE

3 01 INTERTEK TQA STRATEGY

4 ATTRACTIVE GROWTH IN THE $250BN GLOBAL QUALITY ASSURANCE MARKET Existing customers: Increase account penetration ATIC cross selling New customers: New contracts $50BN Currently outsourced Existing & New customers: Outsourcing $200BN Currently in-house 4

5 THE QUALITY ASSURANCE INDUSTRY IS EVOLVING FROM TIC TO ATIC TIC PROVIDES QUALITY & SAFETY CONTROLS IN HIGH RISK AREAS SUPPLY TIER 3 TIER 2 TIER 1 3RD PARTY PRODUCTION OWNED TRANSPORTATION DISTRIBUTION DISTRIBUTION CENTRES RETAIL IN-STORE ONLINE CONSUMER A T T I I C C ASSURANCE PROVIDES AN END-TO-END ASSESSMENT OF QUALITY & SAFETY PROCESSES 5

6 INTERTEK TOTAL QUALITY ASSURANCE VALUE PROPOSITION Systemic Approach to Quality and Safety with ATIC Solutions RESEARCH & DEVELOPMENT CONSUMER MANAGEMENT Our Customer Promise Intertek Total Quality Assurance expertise delivered consistently with precision, pace and passion, enabling our customers to power ahead safely RAW MATERIALS SOURCING DISTRIBUTION & RETAIL CHANNELS Assurance Testing Inspection Certification COMPONENT SUPPLIERS TRANSPORTATION MANUFACTURING 6

7 OUR DIFFERENTIATED STRATEGY IS MOVING THE GROUP S CENTRE OF GRAVITY TOWARDS THE HIGH GROWTH HIGH MARGIN SECTORS 5x5 Strategic Goals Fully engaged employees working in a safe environment Superior customer service in Assurance, Testing, Inspection and Certification Margin accretive revenue growth based on GDP+ organic growth 5 Strategic Priorities 5 Enablers Strong cash conversion from operations Accretive, disciplined capital allocation policy Differentiated Brand Proposition Superior Customer Service Living Our Customer Centric Culture Disciplined Performance Management Effective Sales Strategy Superior Technology Growth and Margin Accretive Portfolio Energising Our People Operational Excellence Delivering Sustainable Results 7

8 02 TQA GROWTH OPPORTUNITIES 8

9 GLOBAL TRADING LANDSCAPE SIGNIFICANTLY DIFFERENT 50 YEARS AGO n/a 38% 10% 27% 72% 7% 20% Companies produced locally and were focussed on their domestic markets Global Trade represented 25% of World GDP in the 1960 s Trade as % of GDP Source: World Bank. Trade is the sum of exports and imports of goods and services measured as a share of gross domestic product. 9

10 THE 21ST CENTURY HAS CREATED A TRULY GLOBAL MARKET 69% 51% 53% 65% 57% 86% 28% 61% 35% 73% 43% 41% 37% 73% 39% 45% 27% 63% 31% 75% 65% 49% 132% Global trade as a % of global GDP 56% 58% 44% 39% 33% 24% 29% 63% 41% Demand has become truly global, reflected in global supply Today Global Trade represents 58% of World GDP Trade as % of GDP Source: World Bank. Trade is the sum of exports and imports of goods and services measured as a share of gross domestic product. 10

11 CORPORATIONS RUN GLOBAL MULTI-TIER SOURCING AND MANUFACTURING OPERATIONS SUPPLY TIER 3 TIER 2 TIER 1 3RD PARTY PRODUCTION OWNED Improved emerging market manufacturing capabilities Cheaper materials sourcing Focus on core competencies Faster communication & infrastructure Increased corporation focus on risk management Global multi-tier sourcing and manufacturing operations Global multi-tier sourcing Global manufacturing 11

12 CORPORATIONS DISTRIBUTION ACTIVITIES ARE GLOBAL AND MULTI-CHANNEL TRANSPORTATION DISTRIBUTION DISTRIBUTION CENTRES RETAIL IN-STORE ONLINE CONSUMER Global, multi-channel distribution operations Consumers are demanding more variety in their products Developing countries share of global demand is rising Access to technology is a major driver to accelerate innovation Increased number of trade channels Increased number of communication channels Multi-country distribution Multi-channel routes to market 12

13 CORPORATIONS ARE INCREASING THEIR FOCUS ON SYSTEMIC OPERATIONAL RISK SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Global multi-tier sourcing Global manufacturing Multi-country distribution Multi-channel routes to market 13

14 THE QUALITY ASSURANCE INDUSTRY IS EVOLVING FROM TIC TO ATIC SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Testing Testing is evaluating how products and services meet and exceed quality, safety, sustainability and performance standards Inspection Inspection is validating the specifications, value and safety of raw materials, products and assets Certification Certification is certifying that products and services meet trusted standards 14

15 THE QUALITY ASSURANCE INDUSTRY IS EVOLVING FROM TIC TO ATIC SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Assurance Ensures our customers identify and mitigate the intrinsic risk in their operations, supply chain and quality management systems 15

16 INTERTEK PROVIDES GLOBAL TOTAL QUALITY ASSURANCE: A + T + I + C TIC PROVIDES QUALITY & SAFETY CONTROLS IN HIGH RISK AREAS SUPPLY PRODUCTION DISTRIBUTION RETAIL A TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER A T T I I C C Global multi-tier sourcing Global manufacturing Multi-country distribution Multi-channel routes to market ASSURANCE PROVIDES AN END-TO-END ASSESSMENT OF QUALITY & SAFETY PROCESSES 16

17 03 TQA VALUE PROPOSITION

18 INTERTEK PROVIDES A DEPTH AND BREADTH OF ATIC SOLUTIONS Assurance Testing Inspection Certification Management Systems Softlines Agriculture Appliance & Electronic Benchmarking in Quality & Performance Sustainability & Environment Facility / Plant & Equipment Legal & Regulatory Product Development Vendor Compliance Corporate Social Responsibility Failure Investigation Laboratory Outsourcing Risk Management Supply Chain Assessment Network Assurance Hardlines Automotive Biofuels Building & Construction Chemicals & Pharma Electrical Food Health & Beauty Minerals Packaging Pharmaceutical Oil & Gas Asset Integrity Building & Construction Chemical & Petrochemical Electrical Exporter & Importer Field Labelling Industrial Minerals Oil & Gas Site Construction Textile & Apparel Aerospace & Automotive Building & Construction Conformity by Country Eco-Textile Food & Food Services Hazardous Locations HVACR 1 Industrial Equipment IT & Telecoms Life Safety & Security Lighting Medical Devices 1 Heating Ventilation Air Conditioning and Refrigeration 18

19 WE ARE UNIQUELY POSITIONED TO DELIVER ATIC SOLUTIONS WITH OUR GLOBAL NETWORK 42,000+ employees 100+ countries Global Market Leader in Assurance 3,000 auditors Global Market Leader in TIC 1,000+ labs and offices 90,000+ audits Assurance Testing Inspection Certification 80+ languages Systemic approach to Quality and Safety with ATIC Solutions 19

20 T-SHIRT GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Global Organic Textile Standard Commercial & Functional Claims High Volume Instrument Testing Retail Store Building Testing & Inspection Raw Materials & Pre-Production Inspection Product Testing for Physical and Chemical Safety Properties & Qualities Random Inspection & Loading Supervision Certificate of Conformity Cotton Field Spinning Mill Dyeing & Finishing Mill Garment Factory Exporter Importer Retailer Retailer T + I + C To control quality and safety at the high-risk / regulated points of the supply chain 20

21 T-SHIRT GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER A To provide an end-to-end assessment of quality & safety processes Cotton Field Spinning Mill Dyeing & Garment Exporter Importer Retailer Retailer Finishing Mill Factory Damage Survey GRS/Global Recycled Standard Mill Qualification Programme Environmental Chemical Management Solutions ISO Workplace Conditions Assessment ISO 9001 Quality Audits Supplier Qualification Programme Customs and Trade Partnership Quality & Safety Counterfeiting Assurance Security Assessments Benchmarking & Brand Audits Cybersecurity Assurance, Lifecycle Assessments 21

22 T-SHIRT GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Global Organic Textile Standard Commercial & Functional Claims High Volume Instrument Testing Retail Store Building Testing & Inspection Raw Materials & Pre-production Inspection Product Testing for Physical and Chemical Safety Properties & Qualities Random Inspection & Loading Supervision Certificate of Conformity Cotton Field Spinning Mill Dyeing & Finishing Mill Garment Factory Exporter Importer Retailer Retailer Damage Survey GRS/Global Recycled Standard Mill Qualification Programme Environmental Chemical Management Solutions ISO Workplace Conditions Assessment ISO 9001 Quality Audits Supplier Qualification Programme Customs and Trade Partnership Quality & Safety Counterfeiting Assurance Security Assessments Benchmarking & Brand Audits Cybersecurity Assurance, Lifecycle Assessments Intertek Total Quality Assurance: A + T + I + C 22

23 LIGHTBULB GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Physical Testing & Chemical Analysis Commercial & Functional Claims Hazardous Material Assessment Market Surveillance Inspecting On-Sale Product Quality Factory Working Conditions Evaluation Global Safety Certification Energy Efficiency Testing IoT services Transportation testing Green Packaging Claim Certification Copper Mine R&D Manufacturing Manufacturing Laboratory Manufacturing Manufacturing Haulier Distributor Retailer Retailer T + I + C To control quality and safety at the high-risk / regulated points of the supply chain 23

24 LIGHTBULB GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER A To provide an end-to-end assessment of quality & safety processes Copper Mine R&D Manufacturing Manufacturing Laboratory Manufacturing Manufacturing Haulier Distributor Retailer Retailer Damage Survey Environmental Modelling Services Quality/Health & Safety, Environmental Audits Training Programs Global Market Access Assurance Packaging Evaluation Global Security Verification Programme Expediting Services Benchmarking Product Returns Analysis 24

25 LIGHTBULB GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER Physical Testing & Chemical Analysis Commercial & Functional Claims Hazardous Material Assessment Market Surveillance Inspecting On-Sale Product Quality Factory Working Conditions Evaluation Global Safety Certification Energy Efficiency Testing IoT services Transportation testing Green Packaging Claim Certification Copper Mine R&D Manufacturing Manufacturing Laboratory Manufacturing Manufacturing Haulier Distributor Retailer Retailer Damage Survey Environmental Modelling Services Quality/Health & Safety, Environmental Audits Training Programs Global Market Access Assurance Packaging Evaluation Global Security Verification Programme Expediting Services Benchmarking Product Returns Analysis Intertek Total Quality Assurance: A + T + I + C 25

26 CAR GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 OEM TRANSPORTATION DISTRIBUTION CENTRES OEM CONSUMER Design Validation Planning Certification Aftermarket Sales Material, Component & Software Validation Regulatory Compliance Ergonomic Evaluations Bill of Materials & Part Quality Inspection Fleet & Track Testing, Homologation Import and Pre-Shipment Inspection Vehicle and Site Evaluations Statutory Vehicle Inspections Research & Development Raw Materials, Components & Systems Component Manufacturing Component Production Full Vehicle Manufacturing Import/Export Dealerships Customer Experience Aftermarket Government T + I + C To control quality and safety at the high-risk / regulated points of the supply chain 26

27 CAR GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 OEM TRANSPORTATION DISTRIBUTION CENTRES OEM CONSUMER A To provide an end-to-end assessment of quality & safety processes Research & Development Raw Materials, Components & Systems Component Manufacturing Component Production Full Vehicle Manufacturing Import/Export Dealerships Customer Experience Aftermarket Government Regulatory Compliance Assessment Quality/Health & Safety, Environmental Audits, Training Programs Functional Safety & Risk Assessment Working Conditions Assessment Greenhouse Gas Validation and Verification Failure analysis Global Supply Chain Management Harmonised System Customs Coding Benchmark Vehicles, Components and Systems Benchmarking & Brand Audits Field Performance Data Collection and Analysis 27

28 CAR GLOBAL OPERATIONS SYSTEMIC RISK MANAGEMENT SUPPLY PRODUCTION DISTRIBUTION RETAIL TIER 3 TIER 2 TIER 1 OEM TRANSPORTATION DISTRIBUTION CENTRES OEM CONSUMER Design Validation Planning Certification Aftermarket Sales Material, Component & Software Validation Regulatory Compliance Ergonomic Evaluations Bill of Materials & Part Quality Inspection Fleet & Track Testing, Homologation Import and Pre-Shipment Inspection Vehicle and Site Evaluations Statutory Vehicle Inspections Research & Development Raw Materials, Components & Systems Component Manufacturing Component Production Full Vehicle Manufacturing Import/Export Dealerships Customer Experience Aftermarket Government Regulatory Compliance Assessment Quality/Health & Safety, Environmental Audits, Training Programs Functional Safety & Risk Assessment Working Conditions Assessment Greenhouse Gas Validation and Verification Failure analysis Global Supply Chain Management Harmonised System Customs Coding Benchmark Vehicles, Components and Systems Benchmarking & Brand Audits Field Performance Data Collection and Analysis Intertek Total Quality Assurance: A + T + I + C 28

29 THE ATIC OPPORTUNITY IS INDUSTRY AGNOSTIC TIC PROVIDES QUALITY & SAFETY CONTROLS IN HIGH RISK AREAS ASSURANCE PROVIDES AN END-TO-END ASSESSMENT OF QUALITY & SAFETY PROCESSES SUPPLY PRODUCTION DISTRIBUTION RETAIL A TIER 3 TIER 2 TIER 1 3RD PARTY OWNED TRANSPORTATION DISTRIBUTION CENTRES IN-STORE ONLINE CONSUMER A T T I I C C 29

30 04 TQA DELIVERY

31 INTERTEK IS A PURPOSE-LED COMPANY OUR PURPOSE Bringing Quality and Safety to Life OUR VISION To be the world s most trusted partner for Quality Assurance OUR VALUES We are a global family that values diversity We always do the right thing. With precision, pace and passion We trust each other and have fun winning together We own and shape our future We create sustainable growth. For all 31 31

32 INTERTEK S INNOVATIVE CULTURE HAS PIONEERED THE INDUSTRY FOR 130 YEARS : Milton Hersey establishes his chemical testing lab in Canada 1896: Thomas Edison sets-up the Lamp Testing Bureau in the US (this later becomes the Electrical Testing Laboratories of ETL a mark that Intertek still applies today 1987: Inchcape Testing Services (ITS, the future Intertek) is founded and completes the purchase of Caleb Brett 1973: Labtest established in Hong Kong, initially to focus on testing textiles 1996: Inchcape sells ITS to Charterhouse Development Capital. ITS is renamed Intertek : Intertek enters the FTSE 100 index 2015: Intertek acquires the PSI building and construction assurance business 2017: Intertek acquires KJ Tech Services a leading provider of automotive testing solutions in Germany 1885: Caleb Brett founds his cargo certification business in the UK 1925: SEMKO (the Swedish Electronic Equipment Control Office) is founded 1911: Moody International, Oil and Gas testing and certification business 1927: Charles Warnock company is created in Canada to inspect steel products : ITS acquires ETL 1989: ITS enters the Chinese market 1994: ITS acquires SEMKO : Intertek Group plc lists on the London Stock Exchange 2011: Intertek acquires Moody International 2016: Intertek acquires: FIT Italia a food quality & safety assurance business EWA Canada a leading cyber security business ABC Analitic a JV in Mexico s fast growing environmental testing market Intertek s pioneering founders Intertek develops into an international testing business through organic and inorganic growth Intertek Group plc listed on the LSE 32

33 INTERTEK S DECENTRALISED CUSTOMER 1 ST OPERATING MODEL INTERTEK ORGANISATIONAL STRUCTURE BUSINESS LINES GEOGRAPHIC AREAS GLOBAL FUNCTIONS PRODUCTS Softlines, Hardlines, Electrical & Network Assurance, Business Assurance, Building & Construction, Transportation Technologies, Chemicals & Pharma, and Food Americas China Group ATIC Customer Service & Operations Excellence Marketing and Communications TRADE Cargo & Analytical Assessment Government & Trade Services South and South East Asia HR AgriWorld Middle East and Africa Finance and IT RESOURCES Industry Services Minerals Europe & Central Asia North East Asia & Australasia Legal, Risk and Compliance Corporate Development 33

34 SYSTEMIC PERFORMANCE MANAGEMENT AT THE SITE, COUNTRY, BUSINESS LINE AND GROUP LEVEL Revenue ( m) Operating Profit ( m) Operating margin (%) Cash Flow from Operations ( m) 1,204 1, % 16.3% H1 16 H % +2.7% CCR H1 16 H % +10.1% CCR H1 16 H bps +110bps CCR H1 16 H % FINANCIAL KPIs Revenue growth Pricing power NON-FINANCIAL KPIs Marketing Customer PRODUCTIVITY MANAGEMENT Monthly performance reviews THREE TIER PORTFOLIO STRATEGY Capital and resource allocation discipline Margin accretion Working capital Sales Service Business line and country benchmarking Strategic review of underperforming business units ROCE/ROIC Operational excellence Consolidation of facilities 34

35 05 INTERTEK PERFORMANCE

36 Our Mid- to Long-Term Value Creation Our Sectors Our Services HIGH MARGIN AND STRONGLY CASH GENERATIVE EARNINGS MODEL Assurance Testing Inspection Certification Products Trade Resources GDP+ GDP growth Long-term growth GDP+ Organic revenue growth Margin accretive revenue growth Strong free cash flow Disciplined capital allocation Capex / M&A Investments in growth 36

37 ACCRETIVE DISCIPLINED ALLOCATION OF CAPITAL 01 Capex and working capital investment to support organic growth (target c.5% of revenue in capex) Sustainable shareholder returns through payment of progressive dividends M&A focused on strong growth and margin prospects in businesses with leading market positions or in new attractive growth areas, geographies or services Efficient balance sheet with flexibility to invest in growth with Net Debt / EBITDA target of 1.5x - 2.0x 04 37

38 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 TRACK RECORD OF SHAREHOLDER VALUE-CREATION Revenue ( m) 10y CAGR 14.5% EPS (p) 10y CAGR 14.5% % % ,004 1,237 1,374 1,749 2,054 2,184 2,093 2,166 2, Cash Generated from Operations ( m) Dividend (p) 10y CAGR 15.9% 10y CAGR 15.5% % %

39 SUMMARY The industry is evolving from TIC to ATIC and creating exciting growth opportunities Intertek is well positioned to seize these growth opportunities with its differentiated TQA value proposition Decentralised customer 1 st operating model delivering superior customer service Disciplined performance management and accretive capital allocation Track record of creating sustainable shareholder value 39

40 APPENDIX

41 STRUCTURAL GROWTH DRIVERS Products Trade Resources 58% of Revenue 73% of Profit 24% of Revenue 21% of Profit 18% of Revenue 6% of Profit Increased number of Brands & SKUs Faster innovation cycle Population growth GDP growth Long term demand for energy Investment in infrastructure Increased regulation Increased consumer focus on sustainable products Development of regional trade Growth in transport infrastructure Supply chain risk management Growth in alternative energy Improvements in safety, performance and quality Increased corporation focus on risk management Increased focus on traceability Growth in port infrastructure Sustainability of energy supply Focus on health & safety GDP+ GDP growth Long-term growth Mid to long-term outlook: GDP+ Organic revenue growth in real terms 41

42 Geographic GBL WE HAVE A CLEAR AND DEFINED THREE TIER ACCRETIVE PORTFOLIO STRATEGY Grow Scale Businesses Invest in Fast Growing Businesses Improve Performance Softlines Hardlines Business Assurance Agriculture Industry Services Minerals Electrical & Network Assurance Cargo & Analytical Assessment Government & Trade Services Building & Construction Transportation Technologies Food North America South Asia Australia Greater China South East Asia South America Middle East and Africa Europe 42

43 STRONG EARNINGS GROWTH AND CASH GENERATION Revenue ( m) Operating Profit ( m) Operating margin (%) 1,204 1, % 16.3% H1 16 H % +2.7% CCR Cash Flow from Operations ( m) H1 16 H1 17 Adjusted EPS (p) +20.4% +10.1% CCR H1 16 H1 17 Interim Dividend (p) +90bps +110bps CCR H1 16 H % H1 16 H % +11.4% CCR H1 16 H % 43

44 GROUP S CENTRE OF GRAVITY MOVING TOWARDS HIGH GROWTH HIGH MARGIN SECTORS 1,500m 1,200m 900m 600m 300m 0m Group Revenue Group Operating Profit Group Margin 1,372m 1,204m 1,060m 58% 56% 50% 25% 23% 24% 25% 21% 18% H1 15 H1 16 H m 200m 224m 186m 164m 150m 73% 72% 67% 100m 50m 22% 20% 21% 0m 11% 8% 6% H1 15 H1 16 H % 16.2% 15.8% 15.4% 15.0% +90bps +110bps CCR % -10bps 15.5% +10bps CCR % H1 15 H1 16 H1 17 Note: (1) At 2016 constant currency rates; (2) At 2017 constant currency rates 44

45 5.5% ORGANIC REVENUE GROWTH IN 94% OF EARNINGS H1 17 Organic revenue growth CCR 1 (%) 10.0% 5.0% Products: +5.8% 73% of earnings 21% of earnings Trade: +4.6% (10.0%) 10.0% 20.0% H1 17 Total revenue growth (%) (5.0%) Resources: (12.3%) 6% of earnings (10.0%) GDP+ Organic Growth in Products & Trade: +5.5% (15.0%) Note: (1) At 2017 constant currency rates 45

46 ORGANIC OPERATING MARGIN ACCRETION OF 100BPS Organic operating margin improvement bps +40bps +60bps H1 15 H1 16 H1 17 Cost reduction activities Headcount Savings m m m Productivity management Monthly performance reviews for Top 30 countries/16 Business Lines Performance benchmarking by business line, country and site Price and cost discipline Portfolio strategy Margin accretive revenue growth in Products and Trade Investments in attractive growth and margin sectors Strategic review of underperforming business units Note: (1) Organic operating margin at constant currency rates when reported (CCR); (2) Annualised 46

47 GROUP OUTLOOK 2017 Solid organic revenue growth at constant currency Robust growth momentum in Products Good growth momentum in Trade Continuing challenging trading conditions in Resources Robust Group margin progression at constant currency Continuous cost discipline Performance management Portfolio strategy Strong cash conversion Capex: 120m 130m Net debt: 600m 650m 1 Note: (1) Before any material change in FX rates and any additional M&A 47

48 KEY INVESTOR INFORMATION Key dates: 2017 November Trading Update 21 November Full Year Results 6 March 2018 Conference attendance: Key contacts: Sanford C. Bernstein, Strategic Decisions Conference, London 28 September 2017 CEO, IR Berenberg, Testing, Inspection & Certification Conference, London 5 October 2017 IR Societe Generale, European ESG/SRI Conference 7 November 2017 IR Deutsche Bank, Business Services, Leisure and Transport 28 November 2017 IR Credit Suisse, Business Services and Consumer Conference, San Francisco 5 December 2017 IR Josh Egan, Investor Relations Director ; +44 (0) ; investor@intertek.com 48