G4S Annual Report and Accounts 2011

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Overview Strategic review Performance Performance Divisional review continued Cash solutions The cash solutions businesses manage cash primarily for financial institutions and retailers. G4S’s detailed understanding of the cash cycle ensures that cash is managed efficiently, allowing G4S’s customers to focus on their core businesses. Cash solutions accounted for 17% of G4S’s revenue and 24% of PBITA for the year ended 31 December 2011. Services The cash solutions businesses cover a wide range of services including: uu Cash transportation – the secure transportation of cash using high security vehicles, fully screened and trained personnel and purpose-built technology to transport, protect, count and reconcile the cash to customer records uu Cash management – the management of cash on behalf of financial institutions which includes cash transportation, the design, build and management of purpose built high security cash centres, counting and reconciling cash, fitness sorting of notes for use in ATM machines, counterfeit detection and removal, redistribution of cash to bank branches, ATMs and retail customers – all managed within strict security guidelines and timescales in order to maximise the efficiency of the cash cycle. Cash management is also used for counting and reconciling cash from non-financial institution customers uu Cash consulting – providing consultancy services to central banks and commercial banks on overall cash management strategy, bank note production and security and all aspects of cash cycle efficiency uu ATM management – managing ATMs on behalf of banks, retailers and independent ATM providers – including cash forecasting, cash transportation and reconciliation services, first line maintenance and ATM engineering services uu Retail cash management – systems and hardware which provide an automated cash office for retail sites to improve security of cash, electronic audit trails of takings and a real time view of retail cash balances uu Secure international transportation of cash and valuables – bespoke international transportation and insurance of currency, gems, precious metals and other valuables Contracts and relationships The duration of contracts in the cash solutions segment vary, with most being on an annual basis and those contracts requiring a higher capital intensity, such as cash processing, being usually five-years’ duration. However, even when the contract terms are short, in practice many relationships become long term, rolling over from one year to the next. This is demonstrated in our annual customer retention rates which average above 90% across most regions. 2011 cash solutions revenue by customer type % 1 . 2 3 1 Financial institutions 65% 2 Retail 19% 3 Other 16% 34 G4S plc Annual Report and Accounts 2011
Governance Financial statements Shareholder information 17% 24% of group turnover in 2011 of group PBITA in 2011 Strategy We aim to: uu Play a key role in the management of the cash cycle on behalf of central banks, commercial banks and retailers, allowing them to focus on their core business uu Use our developed market cash cycle expertise and track record to encourage central bank and financial institution outsourcing in developing markets uu Continue implementation of innovative technology such as CASH360 Key operational highlights uu Continued strong performance in developing markets uu Continued difficult environment of low interest rates and service reductions in developed markets Risks and mitigation A full summary of the key risks and mitigations for the cash solutions business can be found in the group risk assessment and management processes section on pages 42 and 43. KPIs The cash solutions business in developing markets has continued to deliver a strong performance. Developed markets for cash solutions have continued to face a challenging environment of continued low interest rates which has led to some service reductions. Turnover* – cash solutions £m 980 2007 2008 2009 2010 2011 Organic growth – cash solutions % 10.6 1,193 12.5 1,341 4.7 1,289 1,301 (1.1) 2007 2008 2009 2010 2011 PBITA* – cash solutions £m 124 144 152 151 1.6 137 2007 2008 2009 2010 2011 PBITA margin – cash solutions % 12.7 12.0 11.3 11.7 10.5 *2010 and 2011 at 2011 exchange rates and adjusted for divested and discontinued businesses. 2007–2009 as reported. 2007 2008 2009 2010 2011 G4S plc Annual Report and Accounts 2011 35
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G4S Annual Report and Accounts 2011

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