2024-08-02 12:48:01 ET
Intertek Group plc (IKTSF)
Q2 2024 Earnings Conference Call
August 2, 2024, 4:30 AM ET
Company Participants
André Lacroix - Chief Executive Officer
Colm Deasy - Chief Financial Officer
Denis Moreau - Vice President, Investor Relations
Conference Call Participants
Suhasini Varanasi - Goldman Sachs
Rory McKenzie - UBS
Arthur Truslove - Citi
Sylvia Barker - JPMorgan
Afonso Osório - Barclays
Annelies Vermeulen - Morgan Stanley
Neil Tyler - Redburn Atlantic
Himanshu Agarwal - Bank of America
Presentation
Operator
Good day, ladies and gentlemen. And welcome to Intertek H1 Results 2024. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions]
I would like to remind all participants that this call is being recorded. Questions will follow after the presentation. I will now hand over to André Lacroix to start the presentation.
André Lacroix
Good morning to you all and thanks for joining us on our call. Hi. With me, Colm Deasy, our CFO; and Denis Moreau, our VP of Investor Relations.
I would like to start our call today recognizing all my colleagues at Intertek 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.
Here are the key takeaways from our call today. We’ve delivered a broad-based like-for-like revenue growth of 6.1% at constant currency. We saw a very strong margin performance with a year-on-year improvement of 110 bps at constant currency. That resulted in double-digit EPS growth of 17.5% at constant currency. Cash conversion was excellent at 118% and we saw a free cash flow increase of 14%. We continued to make progress on ROIC, which was up 210 basis points at constant currency to 20 bps -- to 20%, sorry. In line with our new dividend policy payout ratio of 65%, our interim dividend was up by 43%. We expect a strong performance in the second half of 2024, and importantly, the implementation of our AAA differentiated strategy for growth is on track.
So, let’s start with our performance highlights. As I said, we delivered a strong financial performance. Group revenues were up 6.6% at constant rate and 1.8% at actual rate. Like-for-like revenue growth was up 6.1% at constant currency. Operating profit was up 14% at constant rate and 8% at actual rate. We delivered a 15.9% operating margin, up 110 basis points at constant rate and 90 basis points at actual rate. EPS growth was super strong, as I said, 17.5% at constant rate and 10% at actual rate. A 20.4% ROIC performance was excellent, 220 basis points ahead of last year at constant rate, at 110 basis points up on actual rates. Free cash flow of £91 million was up 14%. Our interim dividend of 53.9p is up 43%, and our balance sheets remain very strong with a net debt-to-EBITDA ratio of 1 times....
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Intertek Group plc (IKTSF) Q2 2024 Earnings Call Transcript