We are a force for good, bringing quality, safety and sustainability to life for our clients, with a long-term 5x5 differentiated strategy for growth that has ensured another strong performance in 2021.(PDF 9.73mb)
2021: Year in review
We are a purpose-led force for good, committed to delivering sustainable value for all stakeholders.
We never stop reinventing ourselves to take Intertek to greater heights.
I truly believe that one of our responsibilities to our stakeholders is to communicate clearly and with total transparency.
I am therefore pleased to share with you a new format for the 2021 Annual Report that captures, in a systemic end-to-end architecture, what we did in 2021 in three distinct reports: Strategic, Sustainability and Financial.
These three separate, and yet connected, reports have been designed to make it easier for our stakeholders to fully understand our business, how we bring quality, safety and sustainability to life, what we offer our clients, and the opportunities we have ahead of us.
•We have a clear purpose of making the world ever better and our leading ATIC solutions are what society needs to build back ever better.
•The growth in our end-markets is accelerating as our clients have realised during Covid-19 that too many risks in their supply chains were not properly mitigated.
•Given our strong market leadership positions and our Science-based Customer Excellence, we are well positioned to seize the exciting growth opportunities ahead.
•We operate a high-quality earnings model with a track record of continuous growth in revenue, margin, cash and dividends with an excellent Return on Invested Capital.
•We are a high-quality global business delivering sustainable value for all stakeholders: customers, employees, suppliers, shareholders, regulators and our communities.
•Intertek has been included in the FTSE4Good Index for the fifth year running.
•In 2021, Intertek received a rating of 'AAA' in the MSCI ESG Ratings assessment.
•Intertek is an accredited Living Wage Employer in the UK.
•Continuous focus on reducing our direct GHG emissions and targeting net zero emissions by 2050.
•Proud member of the Valuable 500.
- Strong progress in revenue, margin, earnings and cash
- Revenue of £2,786.3m: +6.5% at constant rates and +1.6% at actual rates
- Robust LfL revenue of 5.6% at constant rates: Products: +7.6%, Trade: +3.0%, Resources +1.7%
- Strong H2 with LfL revenue, profit and margin ahead of 2019
- Double-digit adjusted operating profit growth of +15.4% at constant rates and +10.8% at actual rates
- Strong adjusted operating margin of 17.0%: +130bps at constant rates and +140bps at actual rates
- Strong free cash flow of £401.8m driven by cash discipline improving the negative Group working capital further
- Statutory operating profit of £433.2m, up 19.6% YoY at constant rates
- Statutory net profit after tax of £306.7m, up 22.4% at constant rates and 16.8% at actual rates
Revenue£2,786m (2020: £2742m)
Like-for-like revenue1£2,744m (2020: £2722m)
Adjusted free cash flow2£402m (2020: £436m)
Adjusted operating profit1, 2£474m (2020: £428m)
Statutory operating profit£433m (2020: £378m)
Organic Return on Invested Capital124.4% (2020: 21.6%)
Adjusted operating margin1, 217.0% (2020: 15.6%)
Statutory operating margin15.5% (2020: 13.8%)
Dividend per share3105.8p (2020: 105.8p)
Adjusted diluted earnings per share1, 2190.8p (2020: 170.9p)
Statutory diluted earnings per share177.9p (2020: 152.4p)
1. Definitions of the alternative performance measures, metrics and constant rates can be found in the Glossary.
2. Adjusted operating profit, adjusted operating profit margin, adjusted diluted earnings per share (‘EPS’) and adjusted free cash flow are non-GAAP measures. Adjusted measures are stated before Separately Disclosed Items, which are described in note 3 to the financial statements. Reconciliations between statutory and adjusted measures, as well as return on invested capital and cash conversion, are shown in the Financial review.
3. Dividend per share for 2021 is based on the interim dividend paid of 34.2p (2020: 34.2p) plus the proposed final dividend of 71.6p (2020: 71.6p).
Leveraging our 5x5 differentiated strategy for growth
Our differentiated 5x5 strategy continued to inform our operational priorities through the face of the Covid-19 pandemic and continues to do so. It is based on five strategic priorities, which are deliverable through five strategic enablers, and is designed to help us achieve five goals.
Fully engaged employees
Fully engaged employees working in a safe environment.
Superior customer service
Superior customer service in Assurance, Testing, Inspection and Certification.
Accretive revenue growth
Margin-accretive revenue growth based on GDP+ organic growth.
Strong cash conversion
Strong cash conversion from operations.
Disciplined capital allocation
Accretive, disciplined capital allocation policy.
Differentiated brand proposition
We are focused on developing a strong and differentiated brand, to position Intertek as the global market leader in Total Quality Assurance (‘TQA’).
Superior customer service
Delivering the highest standards of customer service is at the heart of our journey to being the world’s most trusted TQA partner.
Effective sales strategy
Driving continuous improvement in margin-accretive revenue growth demands a structured and disciplined approach to sales effectiveness that is increasing leads and conversion rates.
Growth and margin-accretive portfolio
Prioritising investments with high-growth and high-margin prospects which help us to deliver maximum value.
An ‘ever better’ approach to continuously improving our efficiency and productivity through quality management and operational excellence.
Living our customer-centric culture
Strong spirit of entrepreneurship, a customer-focused mindset and engagement at all levels of the organisation.
Disciplined performance management
Financial and non-financial metrics and processes focusing on margin-accretive revenue growth and strong cash conversion.
Improving the customer experience, leveraging back office synergies and delivering superior business intelligence.
Energising our people
Through investments in their capabilities, providing a fully aligned reward system and promoting internal growth.
Delivering sustainable results
Providing growth for our customers and shareholders and recognising the importance of sustainability for the wider community.
Our business model
Doing business the right way with a systemic approach is the only way to deliver our corporate goals and create sustainable value for all stakeholders.
How Intertek is...
...well positioned to seize growth
Who we are
We are passionate about our purpose and committed to being ‘ever better’. Our core strength is our people and sustainability is central to everything we do.Find out more
What we do
Intertek’s unrivalled Total Quality Assurance is delivered consistently with precision, pace and passion. This is what makes us different.Find out more
We concentrate our capabilities into three attractive growth and high-margin sectors – Products, Trade and Resources.Find out more
How we do it
We provide industry-leading solutions by building trusted relationships based on listening to our customers and investing in our global network.Find out more
The value we create
We are a force for good in the world, and our solutions create meaningful and sustainable long term value for a broad range of stakeholders.Find out more
Science-based Customer Excellence
True to our pioneering spirit, and building on our existing strengths, we will continue to innovate and provide customers with the mission- critical solutions they need in a changing world.
Our USP is our Science-based Customer Excellence in quality, safety and sustainability that enables us to provide our 400,000 clients with leading ATIC solutions in Products, Trade and Resources in more than 100 countries.
Moving forward, we expect the global market for our ATIC services to grow faster than ever before. We expect that clients will increase their investments in three key areas: more resilient supply chains, product and services innovation and sustainability.
Covid-19 is proving a catalyst for many corporations to improve the resilience of their supply chains and the major corrective actions our clients are putting in place include:
- Better data on what is happening in all parts of the supply chain;
- Tighter risk management, with razor-sharp business continuity planning;
- A more diversified portfolio of suppliers across all tiers;
- A more diversified portfolio of factories, including on-shoring to both enhance supply chain resilience and reduce the carbon footprint of their operations; and
- Investments in processes, technology and training to improve their supply chain capabilities.
Inlight 2.0 enables organisations to manage increasingly complex supply chain risks, empowering them to bring visibility to the workings of their vendor partners and turn potential disruptions and compliance irregularities to their competitive advantage.Read the case study
We are seeing our clients realise that they need to invest more in product and service innovation to meet the changing needs of their consumers. As a result of the pandemic, corporations have seen consumer expectations change rapidly as they target a brighter, better future.
Intertek has always been a pioneer in our industry, providing new innovative solutions to clients capitalising on the Science-based Customer Excellence and the creativity of our organisation.
Accelerating to net zero with New Electric Vehicle Testing Centre of Excellence
As we accelerate at a rapid pace into a more sustainable future, the automotive industry has a critical role to play in the energy transition the world needs. Our new award-winning, state-of-the-art Electric Vehicle Centre of Excellence, opened in November 2021 in Milton Keynes, UK.Read the case study
The sprint to net zero emissions is real, forcing corporations to reinvent how they reduce their carbon footprint, across their operational footprint and how they communicate their progress towards net zero with independently verified carbon-emission claims disclosures that assure transparency and greater accountability.
Our clients’ additional investments in these three areas of their quality-assurance activities to build greater resilience, sustainability and safety will deliver additional growth opportunities for Intertek.
All stakeholders in society expect governments and corporations to build back a better world with a sharper focus on end-to-end Quality Assurance, and we expect the $250 billion global Quality Assurance market to grow faster post-Covid-19.
In short, the world of Quality Assurance, our unique TQA position within it and our emphasis on quality, safety and sustainability, is set to become more exciting than ever, as companies everywhere gear up to meet the needs and expectations of their stakeholders, outperform the competition and attract new customers and investment.
Intertek Total Sustainability Assurance
Our clients understand that they have to focus on operational and corporate sustainability matters, and they are asking us to deliver comprehensive solutions that address both aspects.Read the case study