Report
Michael Field
EUR 850.00 For Business Accounts Only

Morningstar | Intertek Company Report

Intertek is one of the largest companies globally in the testing, inspection, and certification sector, with global operations servicing a variety of sectors. The TIC market is highly fragmented, with many local or regional players that lack the capabilities to operate across multiple industries and geographies; as such, they struggle to successfully service the needs of multinational companies. Intertek’s scale allows the company to leverage its network of industry experts and testing sites to offer a broad service and bid for large multiyear contracts.Originally founded in 1885, Intertek is one of the oldest firms in the TIC space. Over its long history, the firm has amassed thousands of operating licences, government authorisations, and accreditations. These pose a significant barrier to entry for competitors, as licences can be costly and require considerable time and resources to obtain. Intertek has positioned itself toward several high-growth and high-margin areas of the TIC space, which we believe will improve its margins, bringing them closer to those of industry leader SGS over the next few years. Geographically, Intertek now has almost 20% of group revenue originating from China, more than 30% from the U.S. and less than 7% from the U.K.Products represent the largest business segment within the group, contributing 60% of revenue in 2018 and almost 80% of group operating profit. As such, we believe that Intertek is in a prime position to benefit from several structural growth drivers, including the use of increasingly sophisticated consumer products, such as wearable tech; these often require a high degree of testing expertise, for which vendors can command premium fees.
Underlying
Intertek Group plc

Intertek Group provides Assurance, Testing, Inspection and Certification (ATIC) services. Co.'s segments comprised of Products, Trade and Resources. Co.'s products-related division consists of business lines that are focused on quality and safety of physical components and products, as well reducing risk through assessing the operating process and quality management systems of its customers. Co.'s trade division consists of three Global business lines, Cargo & Analytical Assessment, Government & Trade Services, and Agriculture business. Co.'s resources division consists of two business lines, Industry Services, and minerals business.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
Michael Field

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