Intertek Group Regulatory News (ITRK)

 http://www.rns-pdf.londonstockexchange.com/rns/6955G_1-2015-11-23.pdf

TRADING STATEMENT

24 NOVEMBER 2015

Intertek Group plc ("Intertek" or "the Group"), a leading quality solutions provider to industries worldwide, today releases its Trading Statement for the period from 1 July to date. Where stated, financial results are for the period from 1 January to 31 October 2015 ("period"). All comparative comments in this statement reflect comparisons with the corresponding period during 2014. The Group's full year results to 31 December 2015 will be announced on 2 March 2016.

GROUP PERFORMANCE: 10 Months

· Group revenue at £1,780m increased by 2.8% at actual exchange rates and 1.8% at constant currency.

· Constant currency organic revenue increased 1.2%.

· Continuing good growth from Products and Trade related businesses.

GROUP PERFORMANCE: July-October

· Group revenue at £719m increased by 1.7% at actual exchange rates and 2.5% at constant currency.

· Constant currency organic revenue increased 1.8%.

· Expansion in US growth markets with the acquisition of PSI, a leading construction material testing and assurance business.

Andre Lacroix, Chief Executive Officer commented:

"The growth momentum of the Group has improved in the last 4 months and we are on track to deliver our full year targets. We benefited from good growth in our Products and Trade related businesses which represent 90% of the Group earnings1 while as expected the trading conditions remained challenging in our Industry Services businesses.

The Group remains strongly cash generative and we have continued to invest to take advantage of the attractive growth prospects in our markets with capex initiatives and acquisitions. We have broadened our geographic coverage and service offering with the acquisitions of PSI and MT in the USA. These acquisitions position Intertek as a leading 'one stop shop' service provider for its clients in the rapidly growing US commercial and civil construction markets.

The Group has a diversified profitable business and is well positioned to benefit from the attractive structural growth prospects in our markets based on our global network of state of the art facilities, the breadth and depth of technical expertise inside our organisation and the quality of our Testing, Inspection, Certification and Assurance service offering."

The Consumer Goods division delivered a good organic growth performance driven by strong growth in Softlines and a solid performance in Hardlines. Our Softlines business benefited from strong demand from our clients for chemical testing to reduce harmful chemicals and from the expansion of their supply chain in new markets such as Vietnam, Bangladesh and Turkey. Our Hardlines business continues to take advantage of growth in new sourcing markets and strong global account relationships.

A good organic growth performance in the Commercial & Electrical division was driven by consistent and broad based growth in Electrical & Wireless, Building Products and Transportation Technology. Our Electrical & Wireless business continued to benefit from higher regulatory standards in energy efficiency and from the increased demand for wireless devices. The rising demand for greener and higher quality building and infrastructure in the US market is a major driver of growth for our Building Products activities. Our Transportation Technology operations are capitalising on our automotive clients' investments in R&D to develop new models and more fuel efficient engines.

The Chemicals & Pharma divisions' continuing growth was driven by good global demand for health and beauty products testing as our clients invest in the development and the roll out of innovations to differentiate their brands. Our Health, Environmental & Regulatory business saw increased activity as companies prepare for the next EU "REACH" chemical restriction regulatory deadline.

The Commodities division's good organic growth performance was driven by consistent growth in our Cargo and Government Services (GTS) businesses. Our Cargo business is leveraging the increased volume seen by our clients and is benefiting from our business development activities. Our GTS operations increased revenues from growing export activities with existing clients and from the acquisition of new contracts.

The Industry & Assurance division delivered a mixed revenue performance with strong growth in Food & Agriculture and Business Assurance more than offset by continued challenging trading conditions in Industry Services. Growth in Food & Agriculture is being driven by increased food safety requirements and the expansion of our clients' supply chains in newer markets like Turkey and Brazil. The increased focus of companies on managing the intrinsic risks of their supply chains is an attractive source of growth for our Business Assurance business. As expected, revenues in Industry Services are below last year as we exited low value contracts and some of our clients are reducing their capex investments.

In September, Intertek acquired Dansk Institut for Certificering A/S ('DIC'), a quality assurance and certification company in Denmark. As a leading Danish certification body, DIC enables Intertek to expand its Business Assurance capabilities in the growing Nordic region.

The acquisition of Professional Service Industries, Inc. ('PSI'), announced on 14 October 2015 for a total cash consideration of $330 million on a cash-free and debt-free basis, has reached completion. PSI is a leading US based provider of testing and assurance services to commercial and civil construction markets, with a broad service offering including building materials testing; geotechnical services; and property and environmental assurance. PSI will benefit from the attractive growth momentum in the wider US economy and from the increased demand for 'greener' and higher quality buildings that are driving investment in building and construction activities. The PSI acquisition will build on the strong growth track record in our Building business and provide significant revenue and cost synergies that will accelerate the growth of our US business and deliver strong returns.

Also in October, Intertek acquired MT Group Inc. a leading provider of materials testing services for the building industry in the New York metro area.

The acquisitions of PSI and MT position Intertek as a leading full service "one stop shop" provider for its Clients in the rapidly growing US Building and Construction markets. These two acquisitions bring complementary services to the Intertek portfolio of Testing and Assurance services during the construction phase and deepen our US footprint by providing access to new markets and customers.

The PSI acquisition has been funded from existing debt facilities and following the acquisition, Intertek's net debt/EBITDA ratio should be around 1.8 at the 2015 fiscal year end.

There has been no other material change to the Group's financial position in the period since the last reported balance sheet date of 30 June 2015.

The Group is on track to deliver its full year target of improved organic revenue growth performance with stable margin. We expect continuing good growth in our Product divisions and Trade related businesses which will be partially offset by challenging trading conditions in Industry Services.

Looking further ahead the global testing, inspection and certification industry will continue to benefit from exciting growth prospects driven by global trade flows, global demand for energy, expanding regulations, more complex supply chains, technological innovation and increased demand for higher quality and more sustainable products.

Intertek is well positioned to take advantage of these attractive structural growth opportunities as we offer a high quality Testing, Inspection, Certification and Assurance service offering to our clients based on the depth and breadth of our technical expertise, our global network of state of the art facilities and our customer centric culture.

-ends-

For further information, please contact

Investor Relations

Telephone: +44 (0) 20 7396 3400 investor@intertek.com

Jonathon Brill, FTI Consulting

Telephone: +44 (0) 20 7831 3113 Jonathon.Brill@FTIConsulting.com

Notes

1. Proportion of Adjusted Operating Profit at H1 2015.

Analysts' Call

A live audiocast for analysts and investors will be held today at 7.45am. 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.

Corporate website: www.intertek.com