Intertek Group (LON:ITRK) used its strategic review and 2026 first-quarter trading update call to announce a review of its corporate structure alongside reporting a “strong start” to the year and reaffirming full-year guidance.
Strategic review launched to assess potential separation
Chief Executive Officer André Lacroix said the company has initiated a strategic review to evaluate whether separating the group into two “specialist scale global ATIC businesses” could accelerate growth and create additional shareholder value. The two proposed businesses are Intertek Testing & Assurance and Intertek Energy & Infrastructure, with the review expected to be “concluded and implemented by mid-2027.”
Management said the review will examine whether a more focused structure could improve outcomes via:
- Greater strategic focus through a specialist portfolio approach
- Sharper capital allocation tailored to distinct end markets
- Faster in-market execution through simplification and quicker decision-making
While outlining the rationale, Lacroix emphasized that no decision has been taken yet and that “we are just announcing the start” of the review. Asked by Goldman Sachs’s Suhasini Varanasi about sale versus demerger and whether a U.S. listing could be considered, Lacroix said those were among the options available and that the company would evaluate alternatives with the goal of maximizing value and certainty, but it is “too early to say.”
On potential separation complexity and costs, Lacroix described Intertek as operating a “decentralized and coordinated” model with a small London head office (about “50-60 people”), with resources largely “in the market.” He said management believes potential “dissynergies” should be limited, though this will be assessed during the review. In response to Joe Brent of Panmure Liberum on incremental costs, Lacroix said cost outcomes would depend on the structure chosen (demerger and separate listing versus sale) and are part of the work ahead.
Segment considerations: CEA transfer and customer overlap
During the Q&A, J.P. Morgan’s Victoria Chang asked whether all business lines within Industry & Infrastructure and World of Energy would remain in the proposed Energy & Infrastructure business. Lacroix said that CEA, described as Intertek’s “solar assurance business,” would move “into the electrical business” and therefore “move from the World of Energy into Consumer Products,” because it is managed today by the global electrical business. “The rest doesn’t change,” he added.
On overlap between the two proposed entities, Morgan Stanley’s Annelies Vermeulen asked whether limited customer overlap reduces the risk of revenue dis-synergies. Lacroix agreed, responding, “Yeah, you said it right.”
Chang also asked about assurance activities within Energy & Infrastructure. Lacroix distinguished between “industry specific” assurance solutions managed by business lines (citing examples such as Building & Construction and Caleb Brett) and “industry agnostic” assurance solutions housed in Corporate Assurance. He said nothing would change in terms of the ATIC solutions sold by business lines today. On quantifying industry-specific assurance activity, he pointed to group disclosures and suggested estimating it by taking group assurance revenue minus Corporate Assurance revenue.
Q1 trading: 5.4% like-for-like growth and revenue of £838.5 million
Lacroix reported group like-for-like revenue growth of 5.4% at constant currency in the first quarter, calling it a “robust” performance supported by demand for assurance, testing, inspection, and certification (ATIC) solutions across divisions and geographies. Reported revenue rose 6.7% to £838.5 million.
He said growth was “driven by both volume and pricing,” and added that the company saw “continued margin progression” supported by divisional mix, operating leverage, cost control, and productivity improvements. He also said Intertek delivered “a strong free cash flow” and maintained a “strong balance sheet.”
By division, Lacroix highlighted:
- Consumer Products: 6.5% like-for-like growth, with mid-single-digit growth in softlines, high-single-digit growth in hardlines and electrical; Government and Trade Services (GTS) posted “mid-single-digit negative” performance due to Middle East-related trading disruptions.
- Corporate Assurance: 10.8% like-for-like growth, driven by double-digit growth in Business Assurance; Assurance was low-single-digit negative due to a baseline effect from large contracts that lapsed at the end of June last year.
- Health & Safety: 5.9% like-for-like growth, with double-digit growth in one area referenced by Lacroix, mid-single-digit growth in Food and CMP, and stable performance in AgriWorld.
- Industry & Infrastructure: 5.5% like-for-like growth, including low-single-digit growth in Industry Services, double-digit growth in Minerals, and low-single-digit performance in Building & Construction.
- World of Energy: stable like-for-like performance, with low-single-digit growth in Caleb Brett and CEA; Transportation Technologies posted negative double-digit performance due to reduced client R&D investment in a “challenging automotive environment.”
Several analysts asked whether Q1 reflected any “catch-up” from a slower late-2025 period. Lacroix rejected that interpretation, saying turnaround times in Intertek’s services mean customers “cannot wait,” and that Q1 performance represented underlying trading rather than delayed fulfillment. He also told Barclays analyst James Rowland Clark there was “no catch-up” in Assurance.
Middle East disruption: impact and offsets
Questions focused on the operating environment following the Middle East conflict and its implications for oil and gas-related activity. Lacroix said the Middle East accounts for about 6% of group revenue. He identified Caleb Brett, Industry Services, and GTS as Intertek’s three largest business lines in the region.
He said the Middle East business was “slightly down” in March (low single digit), but “up double digit in Q1.” Within the region, he noted Caleb Brett was “double-digit negative in March” and that GTS was impacted by trading disruption.
Lacroix also discussed shifts in global flows, saying reduced Middle East production and exports in March could take time to affect clients due to shipping lags, and that Asia could be most impacted if conditions persist. At the same time, he said Intertek was seeing “a very strong acceleration of production and export in the Americas,” where the company has significant exposure.
ODDO BHF analyst Geoffroy Michalet asked about positive effects outside the Middle East. Lacroix said Intertek saw “a very strong performance for Caleb Brett in the Americas” in Q1, attributing it to Europe importing more from the U.S. and Latin America.
Guidance reaffirmed; investments and M&A continue
Intertek reaffirmed its 2026 outlook. Lacroix said the company expects mid-single-digit like-for-like revenue growth at constant currency for the year, with high-single-digit like-for-like growth in Corporate Assurance; mid-single-digit growth in Consumer Products and Industry & Infrastructure; and low-single-digit growth in Health & Safety and World of Energy. He said the company is targeting “further margin progression,” strong earnings growth, and strong free cash flow, alongside ongoing cash discipline.
Planned capital expenditures were cited at about £150 million to £160 million, and Lacroix said the company expects to continue delivering an “excellent ROIC.” On currency, he added that average sterling rates over the last three months, applied to full-year 2025 results, would be “broadly neutral” at both revenue and operating profit levels.
Lacroix also said Intertek’s acquisitions completed in 2025—TESIS (Brazil), Envirolab (Australia), Suplilab (Costa Rica), and PTL (U.S.)—are “all performing very well.” He noted two more recent deals: Aerial PV in Europe to expand its solar energy position and QTEST in Colombia to expand its electrical business in Latin America.
In Q&A, Bank of America’s Virginia Montorsi asked about M&A’s contribution to Health & Safety in Q1. Lacroix pointed to Envirolab as “the main driver of the difference between organic and total revenue.”
Looking ahead, Lacroix said the company will remain “laser-focused” on executing its AAA strategy during the review period, and added that Intertek will begin providing quarterly trading updates for the three months ending March and September.
About Intertek Group (LON:ITRK)
Intertek is a leading Total Quality Assurance provider to industries worldwide.
Our network of more than 1,000 laboratories and offices in more than 100 countries, delivers innovative and bespoke Assurance, Testing, Inspection and Certification solutions for our customers’ operations and supply chains.
Intertek is a purpose-led company to Bring Quality, Safety and Sustainability to Life. We provide 24/7 mission-critical quality assurance solutions to our clients to ensure that they can operate with well-functioning supply chains in each of their operations.
Our Customer Promise is: Intertek Total Quality Assurance expertise, delivered consistently, with precision, pace and passion, enabling our customers to power ahead safely.
