Intertek Initiates Strategic Review for Potential Demerger of Energy & Infrastructure Business

Intertek’s strategic review: weighing a split of Energy & Infrastructure

Intertek Group has kicked off a Strategic Review to consider separating its Energy & Infrastructure operations from the rest of the group, either via a sale or a demerger. The goal: create two specialist, scale, global ATIC businesses. ATIC stands for Assurance, Testing, Inspection and Certification – the core services Intertek delivers worldwide.

The two candidate businesses are already clear in the numbers. Intertek Testing & Assurance – covering Consumer Products, Corporate Assurance, and Health and Safety – delivered circa £1.9bn revenue in 2025. Intertek Energy & Infrastructure – spanning World of Energy plus Industry and Infrastructure – generated circa £1.6bn in 2025. Management believes each could grow faster with a tighter portfolio, sharper capital allocation, and quicker local execution. The review is slated to conclude and be implemented by the middle of 2027.

Q1 2026 trading: solid like-for-like growth and margins progressing

Trading started well. Group like-for-like (LFL) revenue was up 5.4% at constant currency in Q1 2026, with continued margin improvement and strong free cash flow. LFL means excluding acquisitions and disposals; constant currency strips out FX swings to show underlying performance.

Q1 2026	£m	YoY change at actual rates	YoY change at constant currency
Group revenue	838.5	3.7%	6.7%
Group LFL revenue	828.3	2.4%	5.4%

Divisionally, growth was broad-based: Consumer Products +6.5% at constant currency, Corporate Assurance +10.8%, Health and Safety +5.9%, Industry and Infrastructure +5.5%, and World of Energy effectively flat at +0.2%.

Where growth is coming from across the divisions

Consumer Products: e-commerce, sustainability and new products doing the heavy lifting

• Softlines grew mid-single digit, helped by e-commerce and sustainability spend.
• Hardlines improved to high-single digit, with toys and furniture called out.
• Electrical & Connected World delivered high-single digit on energy efficiency rules, medical devices and 5G activity.
• Government & Trade Services saw mid-single digit negative LFL after a March slowdown linked to conflict in the Middle East.

Corporate Assurance: double-digit Business Assurance offsets Assuris drag

• Business Assurance accelerated to double-digit growth as clients invested in resilient, ethical and sustainable supply chains.
• Assuris declined mid-single digit due to large contracts that lapsed at the end of H1 2025.

Health and Safety: Food still the standout

• Food testing, hygiene and factory audits delivered double-digit growth.
• AgriWorld was stable, with steady demand for inspections across the global food supply chain.
• Chemicals & Pharma grew mid-single digit on regulation and pharma R&D.

Industry and Infrastructure: Minerals shines, Middle East disruption a headwind

• Industry Services managed low-single digit growth; stronger oil and gas capex and renewables were partly offset by temporary Middle East disruption.
• Minerals delivered double-digit growth, strong in Asia, Africa and North America.
• Building & Construction posted low-single digit growth on greener buildings and infrastructure demand in North America.

World of Energy: mixed bag with auto softness

• Caleb Brett grew low-single digit, with strength in the Americas offset by tougher conditions and reduced Middle East imports into Asia.
• Transportation Technologies was down double-digit as some clients cut R&D in a challenging automotive environment.
• Solar-related testing in CEA grew low-single digit.

2026 guidance reiterated and key financial markers

Management reaffirmed full-year guidance: mid-single digit LFL revenue growth at constant currency, continuous margin progression, strong earnings growth and strong free cash flow.

2026 guidance item	Detail
Capital expenditure	£150-160m
Net finance costs	£71-72m
Effective tax rate	25.5-26.5%
Minority interests	£21-22m
Dividend payout ratio	c.65%
FY26 net financial debt	£930-980m (pre FX/M&A)
FX sensitivity	Recent sterling rates broadly neutral to 2025 results

For context, FY 2025 revenue was £3,431.6m, up 4.3% at constant currency, with LFL growth of 3.9%. Testing & Assurance delivered £1,855.6m (+6.1% at constant currency), while Energy & Infrastructure posted £1,576.0m (+2.3% at constant currency).

Why a split could unlock value for shareholders

• Different engines, different markets: Testing & Assurance serves leading global brands with risk-based quality assurance, while Energy & Infrastructure spans energy, minerals, buildings and transport technologies – businesses with distinct customers and financial profiles.
• Minimal shared cost: Intertek’s decentralised operating model means limited shared functions, making separation cleaner than most.
• Sharper capital allocation: Each business can back its highest-return niches – whether that is brand-led product testing or minerals and infrastructure testing and inspection.
• Speed: A simpler perimeter should enable faster in-market execution.

Intertek’s recent record adds confidence. From 2023 to 2025, the group delivered annual revenue growth of 6% at constant currency, 240bps margin accretion, and average EPS growth of 12% per annum, while generating £2.3bn of cumulative operating cash flow, investing more than £600m, increasing the dividend by an average of 17% per annum, and returning £985m to shareholders.

What could go wrong: key risks to watch

• Separation risk: Deals and demergers carry execution risk, stranded costs and potential dis-synergies. Costs of a split are not disclosed.
• Timing: The review runs through to mid-2027 – a long runway during which end-markets can shift.
• End-market volatility: Transportation Technologies is currently weak, and Middle East disruption affected parts of CP and Industry Services.
• Contract churn: As seen in Assuris, large contract lapses can create air pockets in growth.

My take: quality compounding with an SOTP kicker

This update lands well. A 5.4% LFL at constant currency in Q1, continued margin progress and firm cash generation tick the near-term boxes. Reiterated guidance keeps 2026 on a steady track, and the balance sheet – with FY26 net financial debt guided to £930-980m – looks manageable given cash conversion.

The potential separation is the real swing factor. Testing & Assurance has best-in-class economics and strong brand-led demand drivers; Energy & Infrastructure has cyclical exposure but attractive structural themes in minerals, renewables and infrastructure. If Intertek can separate with limited friction, investors could benefit from clearer peer comparisons and potentially higher combined valuations. If not, the status quo remains a high-quality compounding model.

Net-net, this is a positive RNS. The near-term trading momentum is intact, and the Strategic Review creates optionality. Watch for milestones on the review through 2026-2027, divisional margin trends, and any sign that Transportation Technologies stabilises. Intertek will now provide trading updates for the three months ending March and September, which should help price discovery.

At-a-glance numbers worth bookmarking

Metric	Figure
Q1 2026 LFL growth (CCY)	5.4%
Consumer Products LFL (CCY)	+6.5%
Corporate Assurance LFL (CCY)	+10.8%
Health and Safety LFL (CCY)	+5.9%
Industry and Infrastructure LFL (CCY)	+5.5%
World of Energy LFL (CCY)	+0.2%
2025 revenue	£3,431.6m
2025 Testing & Assurance revenue	£1,855.6m
2025 Energy & Infrastructure revenue	£1,576.0m
Dividend payout policy	c.65%

Useful link

Analyst and investor call details are available at intertek.com/investors.