Intertek Group

In FY2018, Intertek Group generated revenue of GBP 2,801 million across three divisions — Products, Trade, and Resources — with Products contributing 77% of adjusted operating profit. Adjusted operating profit was GBP 482 million at a record 17.2% adjusted operating margin. Organic revenue growth was 3.7% at constant currency. However, a significant portion of revenue was transactional (one-off testing or inspection jobs with no contractual commitment), creating revenue volatility and pricing pressure. The company's Assurance services — enterprise-wide quality assurance programs — represented just 16% of group revenues, having doubled from 10% in 2015. Free cash flow was GBP 350.6 million with 126% cash conversion.

Under CEO André Lacroix (appointed 2015), Intertek pursued its Total Quality Assurance (TQA) strategy to shift the revenue mix from transactional testing toward higher-value, multi-year contractual assurance programs:

• TQA go-to-market restructuring: Repositioned from selling individual testing and inspection services to selling enterprise-wide quality assurance programs under master service agreements, bundling multiple service lines per client.
• Strategic account management: Replaced product-specialist salespeople with strategic account managers who sell cross-divisionally, increasing wallet share per client.
• Operational LEAN program: Implemented LEAN manufacturing principles across laboratories to improve throughput and efficiency without proportional headcount increases, targeting margin improvement even as transactional work faced pricing pressure.
• Portfolio reshaping: Exited low-margin commodity inspection businesses and invested in higher-growth testing verticals including connected devices (IoT, cybersecurity), electric vehicle battery testing, and sustainability/ESG assurance services.
• Divisional restructuring (May 2023): Reorganized from the traditional three divisions (Products, Trade, Resources) to five more granular divisions to better align with market opportunities and improve operational visibility.
• Margin recovery post-COVID: Revenue declined during 2020-2021 due to pandemic disruptions, but the TQA positioning enabled margin recovery as higher-value contractual work proved more resilient than transactional volumes.