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2014 Full Year Results Presentation – Intertek

Intertek · Mar 2, 2015 · 38 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. 2014 Full Year Results Presentation – Intertek – slide 1
    2014 Full Year Results Presentation 2 March 2015 Wolfhart Hauser Edward Leigh Chief Executive Officer Chief Financial Officer 1 www.intertek.com
  2. 2014 Full Year Results Presentation – Intertek – slide 2
    Edward Leigh Chief Financial Officer Financial Performance 2014 Full Year Results Presentation 2 www.intertek.com
  3. 2014 Full Year Results Presentation – Intertek – slide 3
    Results Overview Good growth across most businesses and geographies Specific revenue headwinds Focus on cash management and profitability Dividend up 6.7% 4 www.intertek.com
  4. 2014 Full Year Results Presentation – Intertek – slide 4
    Financial highlights Revenue 2,093m + 2.3% at constant (4.2)% at actual Organic revenue at constant(2) (0.6)% + 1.4% excluding low-value contract exits Operating profit(1) 324m + 1.2% at constant (5.3)% at actual (1.4)% at constant…
  5. 2014 Full Year Results Presentation – Intertek – slide 5
    Revenue year on year bridge m (6.5)% FX 2.3% growth at constant rates impact 2,300 60 (138) 2,200 (51) 17 7 2,231 (2) 16 (4.2)% 2,184 TOTAL 2,100 2,093 2,000 (0.6)% at organic constant rates 1,900 1,800 1,700 1,600…
  6. 2014 Full Year Results Presentation – Intertek – slide 6
    Organic Revenue year on year bridge m 2,100 (0.6)% at constant organic (2.0)% 3.9% 2,029 (1.2)% 2,000 2,016 (0.8)% (0.5)% 1,900 1,800 1,700 1,600 FY 2013 I&A low-value I&A capex Minerals Europe Cargo & Rest…
  7. 2014 Full Year Results Presentation – Intertek – slide 7
    Operating Margin bridge % (20)bps at actual 16.0% (40)bps 50bps 15.7% (20)bps (10)bps 15.5% 15.0% 14.0% 13.0% 12.0% 11.0% 10.0% FY 2013 I&A Minerals Acquisitions Restructuring FY 2014 8 www.intertek.com
  8. 2014 Full Year Results Presentation – Intertek – slide 8
    Currency analysis: Revenue Local currency to GBP FY 2014 FY 2013 USD 5.8% 1.65 1.56 30% CNY 4.9% 10.15 9.68 EUR 5.1% 1.24 1.18 HKD 5.6% 12.80 12.12 55% 10% AUD 13.0% 1.83 1.62 CAD 13.0% 1.82 1.61 5% BRE 14.9% 3.86 3.36…
  9. 2014 Full Year Results Presentation – Intertek – slide 9
    Separately disclosed items m actual exchange rates 2014 2013 Adjusted operating profit(1) 324.4 342.6 Separately disclosed items: Amortisation of acquisition intangibles (20.8) (22.5) Acquisition and disposal costs (3.5)…
  10. 2014 Full Year Results Presentation – Intertek – slide 10
    Restructuring 23.5m 23.5m Asia Restructuring cost of 23.5m Central & Middle Overheads East & 70% people related Africa Headcount reduction of 1,100 C&P Re-shaping the portfolio C&E & CG Europe Europe/USA: C&P and Cargo…
  11. 2014 Full Year Results Presentation – Intertek – slide 11
    Cash flow, tax and investment m actual exchange rates 2014 2013 Cash Flow Adjusted operating profit(1) 324 343 +3% Free cash flow up 41% Depreciation/amortisation 76 71 Working capital (5) (31) Capex 109m; 5.2% of revenue Net capex…
  12. 2014 Full Year Results Presentation – Intertek – slide 12
    Financing Drawn debt 110m bond debt Bank Debt 188m Bank facility refinanced and expanded in July 2014 Bond Debt 565m Gross debt 753m; Cash 120m; Net debt 633m Strong maturity profile Debt duration Pro forma net debt: EBITDA…
  13. 2014 Full Year Results Presentation – Intertek – slide 13
    Dividend Increased by 6.7% Full year dividend per share Full year dividend 49.1p, up 6.7% m 14% CAGR 50 2014 full year pay-out of 79m 49.1 Reflects confidence in strong long-term 46.0 40 structural growth 41.0…
  14. 2014 Full Year Results Presentation – Intertek – slide 14
    Key financial assumptions 2015 Assumptions Interest charge c24-26m Effective tax rate 24.5-25.5% Minority interest c14-15m Diluted shares (as at 31 December 2014) 162.1m Capex as a percentage of revenue 5-6% Based on adjusted…
  15. 2014 Full Year Results Presentation – Intertek – slide 15
    Financial priorities Invest for growth Cost management and efficiency Margin development 16 www.intertek.com
  16. 2014 Full Year Results Presentation – Intertek – slide 16
    Wolfhart Hauser Chief Executive Officer Operating Performance 2014 Full Year Results Presentation 17 www.intertek.com
  17. 2014 Full Year Results Presentation – Intertek – slide 17
    Divisional Overview FY 2014 FY Organic % of Group Revenue mix revenue growth FY Profit Industry Chemicals (7.8)% 20% & Pharma & Assurance 8% Commercial & Commodities (0.3)% 20% Electrical Industry & Assurance 17% 31%…
  18. 2014 Full Year Results Presentation – Intertek – slide 18
    Industry & Assurance FY 14 Performance FY 14 Trading m constant Organic Industry Services: Technical Inspection (TI) down -9% on oil exchange FY 14 Change change and gas capex. Growth in opex Revenue 642.9 (2.8)% (7.8)% 40m low-value…
  19. 2014 Full Year Results Presentation – Intertek – slide 19
    Commodities FY 14 Performance FY 14 Trading m constant Organic Minerals: 15% decline, Indonesian trade bans exchange FY 14 Change change Cargo: Continuing growth, led by Asia and Middle East. Revenue 542.4 (0.5)% (0.3)% Europe weak…
  20. 2014 Full Year Results Presentation – Intertek – slide 20
    Oil & Gas business mix Approx. % of Activity Group Revenue1 Demand Drivers Key Services Oil & Gas 13% Capital Technical inspection Expenditure Technical staffing Capex (Capex) Industry & Assurance Oil & Gas 7% Operational Asset…
  21. 2014 Full Year Results Presentation – Intertek – slide 21
    Consumer Goods FY 14 Performance FY 14 Trading m constant Organic Softlines: Strong growth driven by retailer sourcing in exchange FY 14 Change change emerging markets, fashion diversity, chemical testing Revenue 375.3 4.4% 4.5% Toys &…
  22. 2014 Full Year Results Presentation – Intertek – slide 22
    Commercial & Electrical FY 14 Performance FY 14 Trading m constant Organic Transport: Very high growth, investments coming online exchange FY 14 Change change Electrical: Good growth, new designs & technologies Revenue 359.6 13.9% 5.4%…
  23. 2014 Full Year Results Presentation – Intertek – slide 23
    Chemicals & Pharma FY 14 Performance FY 14 Trading m constant Organic Chemicals & Materials: EU weak, continued exchange FY 14 Change change restructuring Revenue 173.1 5.7% 4.5% Fuel and lubricants strong from new standards, engines…
  24. 2014 Full Year Results Presentation – Intertek – slide 24
    Our strategic portfolio Chemicals & Pharma Minerals Consumers RETAIL & COMMODITIES MANUFACTURED & MATERIALS PRODUCTS INDUSTRY ASSETS Energy Food & Agri Business Assurance 26 www.intertek.com
  25. 2014 Full Year Results Presentation – Intertek – slide 25
    Market drivers in product industries 2014 Highlights Business Assurance, USA +14% Electrical, Taiwan Vietnam +13% End-User quality +24% expectations and diversity Consumers demanding safe and quality brands Transport Colombia…
  26. 2014 Full Year Results Presentation – Intertek – slide 26
    Outlook 2015 Continuing good growth in product-related industries Capex spending in oil and gas sector uncertain Organic revenue growth rate to improve gradually during the year Broadly similar margin Mid-term Quality demand will…
  27. 2014 Full Year Results Presentation – Intertek – slide 27
    Our Growth Platform RETAIL & COMMODITIES MANUFACTURED & MATERIALS PRODUCTS GLOBAL TRADE MARKET DRIVERS QUALITY NETWORK & SERVICE OUTSOURCING & CONSULTING INDUSTRY CONSOLIDATION INDUSTRY ASSETS 29 www.intertek.com
  28. 2014 Full Year Results Presentation – Intertek – slide 28
    Appendix 2014 Full Year Results Presentation 30 www.intertek.com
  29. 2014 Full Year Results Presentation – Intertek – slide 29
    Acquisitions 2013-14 Contributing 3% to 2014 revenue growth Toys & Hardlines Pharma Building Products E-Test Melbourn ATI Scientific 10 acquisitions for 165m Contributing 3% to revenue growth in 2014 QPS GXT ScanBi…
  30. 2014 Full Year Results Presentation – Intertek – slide 30
    Regional revenue 35% 34% Emerging markets make up 2014 38% of Group revenue 2,093m 31% Americas EMEA Asia 32 www.intertek.com
  31. 2014 Full Year Results Presentation – Intertek – slide 31
    Adjusted EPS m actual exchange rates 2014 2013 Adjusted operating profit 324.4 342.6 (5.3)% Net interest expense (24.2) (27.7) Profit before tax 300.2 314.9 Tax 24.0% (23.0%) (72.0) (72.4) Profit after tax 228.2 242.5…
  32. 2014 Full Year Results Presentation – Intertek – slide 32
    Taxation m actual exchange rates 2014 2013 Reported profit before tax 252.2 281.8 Reported tax (61.8) (64.8) Reported profit after tax 190.4 217.0 Reported tax rate 24.5% 23.0% Effective tax rate 24.0% 23.0% on adjusted…
  33. 2014 Full Year Results Presentation – Intertek – slide 33
    Operating Cash Flow m actual exchange rates 2014 2013 Cash generated from operations 386.8 378.6 Separately disclosed items cash flow 16.9 15.5 Adjusted cash generated from operations 403.7 394.1 + 2.4% 35 www.intertek.com
  34. 2014 Full Year Results Presentation – Intertek – slide 34
    Free Cash Flow m actual exchange rates 2014 2013 Adjusted operating profit(1) 324.4 342.6 (5.3%) Depreciation/amortisation 76.3 70.9 Working capital (5.0) (30.9) Net capex (108.5) (140.2) Other* (102.4) (111.8) Free Cash Flow…
  35. 2014 Full Year Results Presentation – Intertek – slide 35
    Net Debt m actual exchange rates 2014 2013 Borrowings 753.0 734.6 Cash (119.5) (116.4) Net debt 633.5 618.2 Pro forma net debt: EBITDA 1.5x 1.4x 37 www.intertek.com
  36. 2014 Full Year Results Presentation – Intertek – slide 36
    Liquidity Position m actual exchange rates 2014 2013 Debt facilities 1,144.5 909.6 Borrowings (753.0) (734.6) Undrawn committed borrowing facilities 391.5 175.0 Cash 119.5 116.4 Liquid funds 511.0 291.4 50% of the debt…
  37. 2014 Full Year Results Presentation – Intertek – slide 37
    Divisional Performance Summary FY 2014 Revenue Margin m constant Organic Organic exchange rates FY 14 Change change FY 14 Change change Industry & Assurance 642.9 (2.8)% (7.8)% 10.0% (140)bps (130)bps Commodities 542.4 (0.5)% (0.3)%…
  38. 2014 Full Year Results Presentation – Intertek – slide 38
    Divisional Performance Summary FY 2014 Organic Revenue Growth m constant exchange rates H1 H2 FY Industry & Assurance (6.7)% (9.0)% (7.8)% Commodities (1.6)% 0.9% (0.3)% Consumer Goods 5.0% 4.0% 4.5% Commercial & Electrical 6.3%…

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