Market

G4S plc
Capital Markets Day
25 May 2011
1
Legal Disclaimer
Certain statements in this document are forward-looking
statements. These forward-looking statements speak only as at the
date of this document. These statements concern, or may affect,
future matters and include matters that are not facts. Such
statements are based on current expectations and beliefs and, by
their nature, are subject to a number of known and unknown risks
and uncertainties that could cause actual results and outcomes to
differ materially from any expected future results or performance
expressed or implied by the forward-looking statements. You are
cautioned not to place undue reliance on these forward-looking
statements. The information and opinions expressed in this
document are subject to change without notice and neither the
Company nor any other person assumes any responsibility or
obligation to update publicly or review any of the forward-looking
statements contained within this document, regardless of whether
those statements are affected as a result of new information, future
events or otherwise.
2
Nick Buckles
Group CEO
3
Agenda
Session One
Presentation Title
Presenter
Alf Duch-Pedersen
Chairman
Introduction
Nick Buckles
Group CEO
Market overview
Strategy implementation
Graham Levinsohn
Group Strategy and Development Director
Q&A
All
David Taylor-Smith
Regional CEO, UK & Africa
UK & Africa
Willem van de Ven
Regional CEO, Europe
Europe
Q&A
All
Coffee Break
4
Agenda
Session Two
Presentation Title
Presenter
Dan Ryan
Regional CEO, Asia Middle East
Asia Middle East
Grahame Gibson
Regional CEO, Americas
Americas
Q&A
All
Trevor Dighton
Group CFO
Financials
Nick Buckles
Group CEO
Closing Remarks
Q&A
All
Lunch
5
Alf Duch-Pedersen
Chairman
6
G4S Overview
Since 2004 merger

Grown from 385,000 employees to 625,000 today

Revenues more than doubled to £7.4 billion in 2010

PBITA growth of 21% per annum

Retained and extended multi-service strategy

Acquired extensive capabilities in key sectors

Generated excellent shareholder returns

Continued to invest in high quality management to deliver the
strategy

Strategy will drive continued growth and development
7
Diversified Geographic Footprint
2010 Turnover by country (%)
UK
Canada
Saudi Arabia
Romania
US
Belgium
Ireland
Austria
Australia
Hungary
Iraq
UAE
Colombia
Malaysia
Greece
Hong Kong
Finland
Chile
Afghanistan
Luxemburg
Netherlands
India
South Africa
Denmark
NOTE
Other includes
80+ countries
Sweden
Norway
Israel
Other
8
Diversified Geographic Footprint
2010 PBITA by country (%)
UK
South Africa
Israel
Greece
US
Saudi Arabia
Denmark
Norway
Netherlands
Belgium
Colombia
Afghanistan
India
UAE
Australia
Malaysia
Romania
Luxemburg
Iraq
Hungary
Canada
Chile
Austria
Qatar
Estonia
Finland
NOTE
Other includes
80+ countries
Hong Kong
Other
9
Adjusted EPS and Dividend
2005 - 2010
Pence
25
10
21.6
9
20.2
20
8
7.9
16.7
EPS
7
7.18
15
11.2
12.1
13.3
6
6.43
EPS CAGR + 14.0%
5
4.96
10
DPS CAGR + 17.4%
4
4.21
3
3.54
5
2
1
0
0
2005
2006
2007
2008
2009
2010
10
TSR Development
G4S versus FTSE 100 total shareholder return comparison (Jan-04 – May-11)
G4S has significantly
outperformed the
FTSE100 in terms of
shareholder returns
400
258%
350
TSR (rebased to 100)
300
250
200
74%
150
100
50
0
Jan-04
Jan-05
Feb-06
Mar-07
G4S
Mar-08
Apr-09
Apr-10
May-11
FTSE100
Source: Datastream (as at 19 May 2011)
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Group Executive Structure
Nick Buckles
Group CEO
Grahame Gibson
Regional CEO - Americas
Trevor Dighton
Group CFO
David Taylor-Smith
Regional CEO - UK & Africa
Irene Cowden
Group HR Director
Willem van de Ven
Regional CEO - Europe
Soren Lundsberg-Nielsen
Group General Counsel
Dan Ryan
Regional CEO – Asia, Middle East
Debbie McGrath
Group Communications Director
Ken Niven
Divisional CEO - Cash Solutions
Graham Levinsohn
Group Strategy & Development Director
12
Nick Buckles
CEO
1
Contents

Global security market

Economic sensitivities

G4S Values

Key business objectives

Acquisitions

Summary
2
Global Security Market
3
Global Market Size and Growth Rates
Strong structural growth B-B & B-G Markets
Security market revenue by region (US$ bn)
250
Estimated annual growth 2009 to 2014 by region
GDP Growth
243
Recession Effects spread across
2004 -09 period thus damping
this 5 year CAGR to 6.8% and
2009 – 14 period, thus giving
second 5 year CAGR to 5.3%
Eastern Europe
12.0%
11.6%
20
14
200
25
Africa / Mideast
8.0%
10.1%
162
15
150
8
125
65
Latin America
10.0%
10.5%
17
10
5
90
11
6
25
100
7
3
10.5%
9.7%
49
14
50
Asia Pacific
38
39
34
Western Europe
4.5%
3.3%
28
61
32
40
45
2004
2009
2014
North America
5.0%
4.4%
0
2019
North America
Western Europe
Asia Pacific
Latin America
Eastern Europe
Africa / Mideast
0%
2%
4%
6%
8%
10% 12% 14%
Source: Freedonia 2011, Company estimates , IMF April 2011
4
Weighted average growth rates 2009-2014
Strong exposure to high growth developing markets
G4S % Revenue 2010
Market Growth
GDP Growth
Eastern Europe
5%
12.0%
11.6%
Africa/Middle East
13%
8.0%
10.1%
Latin America
6%
10.0%
10.5%
Asia
10%
10.5%
9.7%
Western Europe
42%
4.5%
3.3%
North America
24%
5.0%
4.4%
G4S – Weighted Average
6.5%
6.0%
Source: Freedonia 2011, Company estimates , IMF April 2011
5
G4S Revenue from New Markets
Proportion of revenues more than doubled to 29%
2,500
10.0%
2,000
9.0%
1,500
8.0%
1,000
7.0%
500
6.0%
13%
16%
18%
22%
24%
26%
Revenue
Margin
% of group revenues
29%
0
Margin
Revenue (£m)
New Markets Revenues/Margin 2004-2010
5.0%
2004
2005
2006
2007
2008
2009
2010
6
Global Security
Rise of New Markets from 33% to 48% of global market
E Europe
3%
Africa Middle East
7%
Latam
8%
Africa Middle East
9%
N America
36%
E Europe
5%
N America
28%
Latam
11%
Asia
15%
Asia
23%
W Europe
24%
W Europe
31%
2004 market size: £57bn
2019 Market Size: £155bn
7
Global Outsourced Security Market v G4S Customer Split
Opportunity in CNI
2010 Market sector split
Retail
7%
Industrial
21%
2010 G4S customer split
Consumers
4%
Financial
Institutions
14%
Government
20%
Leisure
2%
Financial
Institutions
19%
Retail
9%
Industrials
25%
Government
28%
Commercial
13%
CNI : Ports,
Airports/Rail
10%
CNI : Energy/
Utilities
15%
Logisitics
2%
Ports &
Airports
4%
Utilities
7%
Sources : Freedonia, Frost & Sullivan, Turner & Townsend, G4S analysis
8
Global Market by Segment & Market Shares
Fragmented markets except Cash Solutions
The £90bn global b2b security market – by segment and market share (2010)
By segment
By global market share
Justice, 4%
Other, 4%
Brinks
Prosegur
Secom
Serco Civil
UTC/GE
Cash
Solutions,
10%
Tyco/ADT
Manned
Security, 62%
Securitas
Others
G4S
Security
Systems, 20%
Security market segments – global market shares (2010)
Manned Security
Securitas
12%
Security Systems
Tyco ADT
15%
UTC - GE
15%
G4S
9%
Prosegur
3%
UTC
1%
Others
58%
Others
70%
Allied
Security
2%
Others
39%
Secom
5%
Secom
1%
ISS
2%
Cash Solutions
G4S
4%
Niscayah
3%
Brinks
23%
G4S
15%
Garda
4%
Loomis
12%
Prosegur
7%
Source: Market data & G4S estimates
9
G4S Market Overlap
Integrated security solutions - no direct peer
c.10%
c.35%
c.7%
c.10%
c.10%
Cash Solutions:
Secure Solutions:
Cash Solutions:
Government:
Secure Solutions:
• UK
• Europe
• UK
• US
• Europe
• Canada
• Far East
• Some of Europe
• UK
• Australia
• UK
• S. Europe
• Asia
c.10%*
Secure Solutions:
• UK
* 16% including Government
Source: Market data & G4S estimates
10
Key Market Trends
Market
Customer
Product/Service
Industry Consolidation
Facilities Management
(some markets)
Innovative Technology
– differentiator
Rise of New Markets to
c.50% of market
Balancing customer
economic and security
needs
Risk Management and
Consultancy a
differentiator
Regulation improves
standards and benefits
high quality providers
Growth of
internationally let
contracts
Global Consistency
important
Government
Outsourcing
11
Economic sensitivities
12
Historic Organic Growth
During a “normal” economic cycle
G4S Organic Growth 1996 to 2008 (%) vs GDP
 No cyclical relationship
during normal cycle
12.00%
10.00%
Average 8%
Percentage (%)
8.00%
6.00%
4.00%
Organic Growth
2.00%
GDP* (Nominal)
GDP* (Real)
0.00%
-2.00%
* Ex Brazil and China
-4.00%
-6.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Global Insight, G4S analysis
13
Historic Organic Growth
G4S Organic Growth 1996 to 2009 (%) vs GDP
12.00%
 No cyclical relationship
during normal cycle
10.00%
 Defensive but not
immune in a severe
downturn
Percentage (%)
8.00%
6.00%
4.00%
Organic Growth
2.00%
GDP* (Nominal)
GDP* (Real)
0.00%
-2.00%
* Ex Brazil and China
-4.00%
-6.00%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Global Insight, G4S analysis
14
Analysis of G4S organic growth vs. IMF GDP
15
Analysis of G4S Qtr on Qtr Organic Growth
vs. IMF GDP Growth + 9 months
16
Cash Solutions - Developed Markets
Organic Growth vs. Weighted Average Base Rate %
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
Q1
2007
Q2
2007
Q3
2007
Q4
2007
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
-2.0%
-4.0%
-6.0%
Wt Ave Base Rate %
Organic Growth %
17
Economic Sensitivities of G4S
GDP/inflation
 Will deliver growth well above nominal GDP due to trends
towards outsourcing and increasing global security requirements
 All business segments benefit from an inflationary environment
Interest Rates
 Base Rates below 2.5% can result in cash services reductions
 Economics of outsourcing improve at higher interest rates
 Short-term margin pressure
Government
 Budget constraints should accelerate long-term outsourcing
opportunity
Contract
fundamentals
 Majority of contracts include price escalators or discussion
clauses
 Wage inflation helps drive organic growth
18
G4S Core Values
19
Core Values
What G4S stands for
Customer Focus
We have close, open
relationships with our
customers that generate
trust and we work in
partnership for the
mutual benefit of our
organisations
Teamwork &
Collaboration
We collaborate for the
benefit of G4S as a whole
Expertise
We develop and
demonstrate our
expertise through our
innovative and leading
edge approach to
creating and delivering
the right solution
Integrity
We can always be
trusted to do the right
thing
Best People
We always take care to
employ the best people,
develop their
competence, provide
opportunity and inspire
them to live our values
Performance
We challenge ourselves
to improve performance
year-on-year to create
long term sustainability
20
Objectives
21
Business Strategy
G4S is the world’s leading international security solutions group which
specialises in outsourcing of business processes and facilities in sectors
where security and safety risks are considered as a strategic threat
B – B Markets
B – G Markets
“the assessment and management of security and safety risks for
buildings, infrastructure, materials, valuables, people and society”
Long Term (5+ years) Contracts should be output based around delivery
of the one or more of the following Customer’s Business Objectives : Revenue Growth
 Cost Management
Critical Asset or Risk Management
(including regulatory)
 Customer Service (end customer)
22
Key Business Objectives
Teamwork and Collaboration
Integrity
Recognised as
global leader in
outsourced
solutions
Strong reputation
for integrity &
positive
contribution to
society
Growth
Customer
Focus
Continuously
improve
employee
satisfaction &
retention
Continue organic
and acquisitive
growth in New
Markets multiservice business
Embed customer
satisfaction
monitoring and
focus on
customer service
Build talent pools
to meet future
business
requirements
Build significant
presence in
China, India ,
Saudi Arabia &
Brazil
Best People
Expertise
Acquire
significant
additional
capability in risk
consulting and
systems
integration
Performance
23
Integrity
CSR Achievements & Focus for 2011
2010 Achievements
 Implemented a CSR Checklist for assessing acquisitions and major
investments
 Became a founder signatory to an in new International Code of Conduct for
private security providers
 Introduced a group-wide simplified ethics code which can be easily
understood by all employees
 CSR benchmarking exercise carried out in April 2010 – evaluation versus
peers and best practice
 Commissioned independent customer survey amongst top 200 customers
2011 Focus
 Became a signatory to the UN Global Compact
 Implementing requirements of the Bribery Act
 Developing and implementing approach to Human Rights
24
Key Business Objectives
Teamwork and Collaboration
Integrity
Recognised as
global leader in
outsourced
solutions
Strong reputation
for integrity &
positive
contribution to
society
Growth
Customer
Focus
Continuously
improve
employee
satisfaction &
retention
Continue organic
and acquisitive
growth in New
Markets multiservice business
Embed customer
satisfaction
monitoring and
focus on
customer service
Build talent pools
to meet future
business
requirements
Build significant
presence in
China, India ,
Saudi Arabia &
Brazil
Best People
Expertise
Acquire
significant
additional
capability in risk
consulting and
systems
integration
Performance
25
Acquisition Strategy
26
Acquisitions
Key areas of focus
New Markets
Capability
Building
Market share
building manned
security
Risk Consulting
Facilities
management /
services
Systems
Integration
£200m + per year
27
Summary
28
Summary
Market
 Economic improvement heading in the right direction
 Positive global security market trends
 G4S uniquely positioned across key growth markets
G4S Strategic Development
 Create global secure solutions group focusing outsourcing of strategic
security and risk processes
 Build on strong New Markets positions via acquisition and organic growth
 Substantial opportunity in China, Brazil, India and Saudi Arabia
 Continue building capability in US and UK markets
Acquisitions - £200m+
 Risk Consulting
 All services (including facilities) in New Markets
Performance
 Reaffirmed key financial objectives to deliver increased organic and EPS
growth
29