INVESTOR PRESENTATION SEPTEMBER PDF Free Download

INVESTOR PRESENTATION SEPTEMBER 2017

AGENDA 01 G4S Overview 02 03 H1 17 Results Looking Ahead 04 Q&A 2

G4S TRANSFORMATION G4S TODAY Leading global security company: Secure and Cash Solutions Advantages of global scale and global brand with market service and customer diversification Operate in 95 countries in Emerging Markets and Developed Markets with c.560,000 employees Strongly growing revenues from technology, systems and integrated solutions Business Segment Revenue 2016 Customer Segment Revenue 2016 Markets Revenue 2016 Consumers 6% NGO s/govt/ MLA 14% Africa 6% Cash Cash Solutions Solutions 17% C & J 17% 5% Tech, Software & Systems 10% Security Secure Solutions Solutions 64% 83% Major Corporates & Industrials 33% Leisure & Tourism 2% Retail 11% Ports & Airports 3% Financial Institutions 16% Public Services 6% Private Energy/ Utilities 7% Transport & Logistics 2% UK & Ireland 18% North America 27% Asia Pacific 10% LatAm 9% Middle East & India 12% Europe 18% 3

GROWTH OUTLOOK SALES PIPELINE 4.4bn ( 4.4bn)* Suspects and Prospects 1.4bn ( 1.3bn)* Bidding 1.2bn ( 1.1bn)* Negotiation New sales contracts: 0.7bn ACV 7.0bn ACV Pipeline Diversified by: Service Market Customer Segment Supports 4-6% revenue growth Quality: improving qualification *As at 30 June 2017 (1 January 2017) 4

AGENDA 01 G4S Overview 02 03 H1 17 Results Looking Ahead 04 Q&A 5

RESULTS HIGHLIGHTS HALF YEAR: 2017 CONTINUING BUSINESSES Revenue: 3.7bn, +6.2% Earnings: 128m, +7.6% OCF: 192m, -30.7%; 2H17 weighting Net Debt/EBITDA: 2.7x (30 June 2016: 3.3x) Dividend: Interim 3.59p/sh; (2016: 3.59p/sh) Health & Safety: Improving culture and performance STRONGER FOUNDATIONS: INCREASING CONFIDENCE 6

REVENUE AND PBITA GROWTH HALF YEAR: 2017 CONTINUING BUSINESSES m Continuing businesses performance at constant exchange rates Revenue PBITA 1H 2017 % chge 1H 2017 % chge Africa 228 +6.0% 24 +9.1% Asia Pacific 367 +2.8% 30 +15.4% Latin America 350 +4.5% 15 +15.4% Middle East & India 427-7.8% 34-24.4% Europe 654 +4.1% 48 +26.3% North America 1,040 +20.6% 57 +18.8% UK & Ireland 649 +1.9% 53 +3.9% GLOBALLY DIVERSIFIED: GROWTH AND RESILIENCE 7

HY 2017 RESULTS BRIDGE FROM CONTINUING BUSINESSES m Continuing businesses Change % HoH* Onerous contracts Portfolio businesses Restructuring Acquisition related amortisation and other Statutory Revenue 3,715 +6.2 57 200 - - 3,972 PBITA 235 +5.9-2 - - 237 Earnings 128 +7.6 (4) (1) (11) 38 150 OCF 192-30.7 (6) (3) (13) - 170 Detailed prior half year reconciliations in release FY 2016 reconciliation in appendix *Constant currency GROWTH ACROSS ALL REGIONS EXCEPT MIDDLE EAST & INDIA 8

HY 2017 RESULTS CONTINUING BUSINESS FINANCIAL PERFORMANCE Six months ended 30 June m Change % 2017 2016 HoH Revenue 3,715 3,497 +6.2 PBITA 235 222 +5.9 PBITA margin 6.3% 6.3% - Interest (54) (49) +10.2 Tax (43) (42) +2.4 Non-controlling interests (10) (12) -16.7 Earnings attributable to equity holders 128 119 +7.6 EPS 8.3p 7.7p +7.8 Operating cash flow 192 277-30.7 9

WORKING CAPITAL MANAGEMENT CASH MATTERS Working capital outflow of 83m (2016: 53m inflow) 2016 very strong 2017 reverting to typical seasonal pattern Inventory impact 7m inflow (2016: 2m inflow) Receivables impact 52m outflow (2016: 5m outflow) DSO 51 (2016: 53) Overdues 3.3% of annual revenues at H1 2017 v. 4.1% at H1 2015 Payables impact 38m outflow (2016: 56m inflow) Cash conversion of 82% expect FY 100% - 125% 10

PORTFOLIO RATIONALISATION SUBSTANTIAL PROGRESS OVER THE LAST YEAR Number of businesses 35 Annual Rev of disposed businesses ( bn) 1.3 Annual PBITA of disposed businesses ( m) 46 Proceeds to date ( m) 503 Net proceeds since 1/1/16 ( m) 233 Five businesses closed in H1 17 Six businesses sold in H1 17 over 150m proceeds 15 to 20 businesses in progress STRATEGIC, COMMERCIAL AND OPERATIONAL FOCUS 11

FINANCIAL FRAMEWORK CASH FLOW AND NET DEBT m December 2016 net debt Operating businesses Capex and finance leases Restructuring Disposal proceeds Net debt in disposed entities Net interest paid Tax Purchase of own shares Dividends Other use of funds Foreign exchange + portfolio + onerous June 2017 net debt 2,500 Cash from Continuing operations 192m Net 83m Investing activities Uses of funds (208)m FX and other (4)m 2,000 1,500 1,670 (192) 1,607 44 103 13 (151) 48 41 7 9 4 11 1,000 500 0 Net cash flow of 58m (2016: 59m) Net Debt / EBITDA 2.7x (3.3x at June 2016) 12

m FINANCIAL FRAMEWORK SOUNDLY FINANCED Very strong liquidity, unutilised committed bank facilities of 930m and cash of 549m New seven year Euro 500m Public Bond issued in June 2017 Group plan supports Net Debt / EBITDA of 2.5x or lower by the end of 2017 1,500 1,000 500 415 Maturity profile ( m) at 30/06/17* 67 897 350 445 433 0 203 111 57 3 33 81 2017 2018 150 2019 199 2020 2021 2022 2023 2024 USPP Bond RCF Undrawn RCF Drawn (*exchange rates @ 30/6/17 or hedged rates where applicable) 13

AGENDA 01 G4S Overview 02 03 H1 17 Results Looking Ahead 04 Q&A 14

LOOKING AHEAD TRANSFORMATION THE NEXT STAGE: 2018-2020 Revenue growth (average) Revenue mix Technology enabled security solutions Technology enabled cash solutions Integrated solutions Productivity (2020) Earnings and OCF Net debt/ebitda 4-6% pa p p p 90m - 100m p.a. p p </= 2.5x 15

SECURE SOLUTIONS 16

$m STRUCTURAL GROWTH MARKET A MARKET LEADER 120,000 100,000 Global Security Services Market Share 2015 ($180.2bn) 80,000 60,000 40,000 20,000 - N America Western Euope AsiaPac Latam East Europe 2010 2015 2020 2025 Africa/Mid East Freedonia Security Industry: January 2017 GROWTH OUTLOOK: 5 6% CAGR 2015-25; $200BN BY 2020 17

CUSTOMER PRIORITIES Asset Protection, Theft & Investigations Workplace Violence Terrorism Business Continuity Budget & Funding Training & Retention Technology management Secure Executive & Employee Travel Global Security Ops management Cyber security Source: Security 500, G4S, Freedonia 18

CONTINUING BUSINESSES ADDING VALUE Incremental Value Added Secure Solutions Managed Service Technology and software Systems: design, build & integration Analytics and Intelligence Monitoring & Response Consultancy & risk management Integrated Solutions Manned & Mobile Security Margin Cross selling and up-selling within and across markets Services scalable across global market footprint Continued investment in people, technology, software & systems 19

G4S SECURE SOLUTIONS INTEGRATED SOLUTIONS CUSTOMER FOCUSED SOLUTIONS 20

G4S INTEGRATED SOLUTION MANHATTAN DEVELOPMENT, USA The largest multi-use redevelopment programme in the USA Detailed risk and threat assessment Integrated solution G4S provides unified security including: access control, systems integration, monitoring (fire, video, intrusion), Risk360, SecureTrax, design and management of the security and operating centre and manned security officers 21

G4S INTEGRATED SOLUTION THAMES TIDEWAY, UK Integrated security solution 4.2bn infrastructure project G4S provides: mobile CCTV, dedicated security control room, biometrics, Risk 360, high-definition CCTV cameras with video analytics and thermal cameras 10 year contract 22

G4S SECURE SOLUTIONS GLOBAL RESOURCE AND CAPABILITY Global Services: Analytics System Design, Build & Integration Technology & Software Consultancy & Risk Management Monitoring & Response Manned & Mobile Key: G4S countries of operation Security Operation Centres GLOBAL MARKET POSITIONS 23

CASH SOLUTIONS 24

G4S CASH SOLUTIONS GLOBAL CASH MARKET TRENDS ATM Cash Withdrawal Growth CAGR % 2016 21 Emerging Markets >6% Developed Markets 0 1% Source: RBR G4S Strategy: Reduce cost of cash management; increase ease of use Aggregation, utilisation, innovation 25

G4S CASH SOLUTIONS ADDING VALUE Incremental Value Added Cash management software & systems ATM Replen & Engineering International Secure Logistics Cash Recycling Cash processing CIT Margin Scale & Capability: Cost leadership, Technology & Innovation, Outsourcing Reduced cost of handling, increase ease of use 26

GROWTH OUTLOOK G4S CASH SOLUTIONS: SPECIFIC DEMAND SOURCES Retail Growth Drivers Retailers can reduce cost of cash handling G4S Retail Cash Solutions CASH360 Deposita Bank Branch Automation Automate processes inside bank branches Reduce cost and improve customer experience Deposita CASH360 Bank Branch Outsourcing Network Consolidation Reduce cost of branch network Maintain customer access and service Network efficiency Lower cost of cash handling Kiosks Mobile branches Multi-bank branches G4S cash processing networks 27

GROWTH OUTLOOK G4S CASH360 / RETAIL CASH SOLUTIONS Benefits to retail and banking customers Rapidly growing customer base Extending our market coverage Developing our products / solutions 2Q17: Large, 5 year contract, c.640 stores Excellent pipeline 28

GROWTH OUTLOOK DEPOSITA: BANK BRANCH AUTOMATION Automated bulk teller solution Reduces cost and improves customer service G4S provides integrated solution: Hardware Proprietary cash management software Real-time banking integration Same day value / credit Service and support Launched 2017, now in 160 branches of major bank 29

G4S CASH SOLUTIONS STRONG MARKET POSITIONS GLOBALLY Global Services: Cash Management Software & Systems ATM Int. Secure Logistics Cash Processing Cash Recycling Cash in Transit Key: G4S countries of operation #1/#2 MARKET POSITION IN 41/43 COUNTRIES 30

PRODUCTIVITY 31

PRODUCTIVITY G4S PROGRAMMES Organisational efficiency: operations and support functions Benchmarking: 130 business units, 90 countries One G4S: standardised operating and functional processes IT enabled automation and shared service centres Procurement, property and financing Proportion to be reinvested PRODUCTIVITY: 90M 100M P.A. BY 2020 32

AGENDA 01 Results Highlights 02 03 Financial Review Looking Ahead 04 Q&A 34

APPENDIX 35

HEALTH & SAFETY CULTURE & PERFORMANCE Safety culture improving but some way to go: Attack fatalities down 33% YoY RTI fatalities down 33% YoY Total fatalities down 50% YoY Ongoing programme: Culture: leadership and accountability Performance: training and systems Competitive advantage OUR GOAL IS ZERO HARM 36

CASE STUDY PHILIP MORRIS, INDONESIA A fast and appropriate response to any securitybreach event, requiring better intelligence Integrated approach to these needs combines manned security, technology and software Delivered cost savings and provides data-driven assurance through Secure360 technology, a tablet-based software programme developed inhouse providing live communication feeds to a national control room Provides real time intelligence and assurance and enhances response and compliance 37

FY16 CONTINUING BUSINESS RECONCILIATION REVENUE For the year ended 31 December 2016 Continuing Continuing Continuing businesses Onerous Businesses reclassified Businesses re- businesses at businesses at previously contracts recategorised to classified from 2016 exchange Exchange rate 2017 exchange reported portfolio portfolio rates movements rates m m m m m m m Revenue Africa 422 422 17 439 Asia Pacific 679 679 46 725 Latin America 621 (7) 614 63 677 Middle East & India 842 842 66 908 Emerging markets 2,564 (7) 2,557 192 2,749 Europe 1,224 1,224 58 1,282 North America 1,817 1,817 113 1,930 UK & Ireland 1,218 70 12 1,300 5 1,305 Developed markets 4,259 70 12 4,341 176 4,517 Total revenue 6,823 70 (7) 12 6,898 368 7,266 38

FY16 CONTINUING BUSINESS RECONCILIATION PBITA, EARNINGS & OPERATING CASH FLOW For the year ended 31 December 2016 Continuing businesses Onerous Businesses reclassified Businesses re- Continuing businesses at Continuing businesses at previously contracts recategorised to classified from 2016 exchange Exchange rate 2017 exchange reported portfolio portfolio rates movements rates m m m m m m m PBITA Africa 42 42 2 44 Asia Pacific 57 57 4 61 Latin America 23 23 3 26 Middle East & India 76 76 6 82 Emerging markets 198 198 15 213 Europe 85 85 4 89 North America 111 111 7 118 UK & Ireland 110 2 112 (1) 111 Developed markets 306 2 308 10 318 PBITA before corporate costs 504 2 506 25 531 Corporate costs (50) (50) (50) Total PBITA 454 2 456 25 481 Earnings 246 2 248 16 264 Operating cash flow 638 2 (6) 634 33 667 39