The Steady Growth and Resilience of the TIC Sector: Exploring Future Trends and Investment Opportunities

Unfazed by the tumultuous waves of change, this sector has not only showcased exceptional resilience during the Covid-19 pandemic but has also maintained an impressive trajectory of steady growth. Bolstered by three promising megatrends, the TIC sector is poised for an exciting expansion in the years to come.

Embedded within a myriad of industries – from construction and manufacturing to food, agriculture, energy, and chemicals – the TIC sector holds an irreplaceable position in ensuring the safety, quality, and dependability of products and services. Its role is pivotal in safeguarding public health and safety, environmental integrity, and consumer trust. This sector’s resilience is deeply rooted in its extensive range of services and its critical function, making it a reliable bedrock even in times of unprecedented crisis.

Despite the havoc wreaked by the Covid-19 pandemic across various sectors, major listed TIC companies emerged as beacons of resilience in 2020. Remarkably, these companies maintained a relatively stable EBITDA margin despite experiencing a dip in revenue. This steadfastness serves as a testament to their adaptability in the face of unexpected hurdles and their prowess in responding to market shifts.

Fueling the sector’s steadfast growth is an ongoing trend towards outsourcing. Fueled by a convergence of cost-saving incentives and regulatory demands for independence, independent TIC companies are steadily ascending. Notably, current statistics indicate that independent players in the TIC sector hold around 40% of the total conformity assessment market, with the remaining 60% shared between insourced entities and governmental bodies.

The TIC sector’s growth is further propelled by stringent regulatory mandates pertaining to quality, safety, and environmental impact. Moreover, as consumer awareness about quality, safety, and sustainability escalates – particularly within the realms of food and pharmaceuticals – this heightened consciousness becomes a pivotal driver of the sector’s ongoing expansion.

On the horizon, three transformative mega-trends are poised to propel the sector’s growth into overdrive. First and foremost, the soaring demand for Environmental, Social, and Governance (ESG) solutions, both from existing and potential clients, is set to reshape the landscape. Secondly, the rise of industrial relocation offers fresh avenues to fortify supply chains, opening doors for the TIC sector to play an instrumental role. Lastly, as a technological and digital metamorphosis engulfs industries far and wide, the TIC sector stands to reap significant benefits from this ongoing transformation.

Looking ahead to the upcoming years, the TIC sector demonstrates an unwavering momentum, even amid the global backdrop of geopolitical tensions, labor scarcities, and pandemic-induced lockdowns. Major TIC companies listed on the global stage continue to flourish, cultivating revenue growth and stable EBITDA margins. This remarkable performance underscores their resilience and capacity to navigate a volatile marketplace.

At Bryan Garnier, our commitment to supporting companies in high-growth, dynamic sectors like TIC is unwavering. Armed with deep-seated industry expertise, a global perspective, and a comprehensive service platform, we stand poised to equip our clients with the insights and tools essential for their success. As we gaze into the future, we are excited to stand shoulder-to-shoulder with our clients as they navigate this ever-evolving landscape and emerge as true global frontrunners.

The key takeaway for potential investors is crystal clear: the Testing, Inspection, and Certification (TIC) sector presents robust prospects and commendable resilience. With the mounting demand for ESG solutions, the surge in industrial relocations promising supply chain security, and the pervasive digital transformation sweeping industries, the sector’s growth trajectory seems unstoppable. Additionally, the TIC sector is projected to attain a valuation exceeding EUR 250 billion by 2025, accompanied by a projected Compound Annual Growth Rate (CAGR) of 4.6%. This alluring potential positions the sector as an attractive investment opportunity with the possibility of mergers and acquisitions further fueling fragmentation.