G4S Annual Report and Accounts 2011

Overview Strategic review Performance
Strategic review
Marketplace
Chief Executive’s interview
Looking ahead
with confidence
In 2011, we achieved our seventh consecutive
year of underlying revenue, PBITA and
dividend growth. The key highlights of the
year were the significant level of contract
wins in developed markets in the second half
of the year and the continued strong growth
in developing markets.
We are confident in the future and expect
to continue our track record of growth
whilst maintaining our discipline on margins
and cash generation.
2011 Performance
How would you sum up 2011 in terms
of trading performance?
It is clear that the economic environment continued to toughen during 2011,
becoming increasingly challenging in the second and third quarters of the
year. Despite this, we have continued to drive the business forward and have
achieved our seventh consecutive year of underlying revenue,
PBITA and dividend growth.
Group revenues were up by 4.7% on the prior year and organic growth
increased from 2.1% in 2010 to 4.5% in 2011. There was organic
growth of 9% in developing markets, which now make up 30% of the
group’s revenue.
Low interest rates continue to be the dominating factor in holding back the
growth rates in our cash solutions businesses and we continue to focus on
keeping the cost base under control so that we are able to maintain
operating margins. In our secure solutions businesses, we maintained
our operating margins at around 7% in 2011, despite the continuing
economic challenges.
Of course, one of the biggest events of year was our proposed
acquisition of ISS, the integrated facilities services company. We were
disappointed not to have completed the transaction which would have
transformed the global facilities services market for years to come.
08
G4S plc
Annual Report and Accounts 2011
What were the main highlights of the year?
The key highlight was the level of contract wins in developed markets in the
second half of the year which made up for the disappointment of the loss
of contracts for Detention & Escorting and Court Services in the UK in the
first half.
In the UK, we were successful in winning a substantial number
of public sector contracts in areas such as welfare-to-work services for
the Department for Work and Pensions and two major outsourced prisons
– HMP Birmingham (transferred to G4S in October 2011) and HMP
Oakwood (due to open in April 2012).
We were also successful in winning an outsourcing contract for Lincolnshire
Police to provide a range of services from HR to finance, and from custody
services to fleet management, and a substantial contract for the Ministry of
Justice to provide integrated facilities services to over 340 court, tribunal and
administration buildings in the Midlands, Wales and the North of England.
In continental Europe, there were significant contract wins
including the Brussels airport security contract which commenced in
February 2011 and security for the European Commission building from
April 2011. In cash solutions, we experienced growth of more than
30% in Belgium following a competitor exiting the market.
We won a large aviation security contract with the Canadian Air
Transport Security Authority covering 20 Canadian airports in the
Pacific region, including Vancouver International, which commenced in
November 2011 and began providing security solutions for a major
motor vehicle manufacturer at over 80 locations across the US,
including their global headquarters in Detroit.