Annual Report 2014

Delivering value to our customers and shareholders

Delivering value for our customers and shareholders
Transform our culture through our people and values
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Delivering value for our customers and shareholders
Invest in organic growth, customer service and operational excellence
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Make our organisation more productive
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Actively manage our portfolio and performance
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Embed disciplined financial and risk management
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CEO statement

G4S CEO Ashley Almanza

Delivering sustainable profitable growth

"In 2013 we established a new strategic plan to transform G4S and deliver sustainable, profitable growth. In 2014, the group made good progress executing this strategic plan and I am pleased to report a 12% increase in underlying earnings (to £210 million) and a 25% increase in cash flow from operating businesses (to £526 million). The group’s performance and prospects are reflected in the directors recommendation to increase the final dividend by 5% to 5.82 pence per share. Much remains to be done to realise the full potential of our strategy."

Our services

Secure solutions
Security & facilities
management services
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Market and strategy

G4S is a global provider of security and FM services with a top-three market position in the majority of the 91 manned security markets in which we operate. Security and facilities management services accounted for 59% of group revenues in 2014.

As one of the few global security companies, our main international competitors in developed markets tend to be regional and international companies operating in a single market segment such as manned security, security systems or facilities management. There are also many local security companies operating in developed and emerging markets.

We aim to differentiate our business to customers through our expertise, excellent service delivery, integrated security solutions and geographic coverage.

Security systems
& technology
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Market and strategy

Security systems and technology represented around 8% of group revenue in 2014.

The global security systems market is a large growing market (source: Freedonia, November 2014) but regional market dynamics vary widely in terms of competition, products sold and customer segments. Our technology strategy therefore has to adapt to meet each region’s unique requirements.

We aim to drive outsourcing and enhance the value of traditional security services through greater use of technology.

Care & justice
services
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Market and strategy

Care and justice services represented around 9% of group revenue in 2014. The market structure is typically consolidated on the supply side with a small number of providers. Larger companies are usually better equipped to deliver such highly specialised services.

While the care and justice services market is concentrated primarily in the UK, USA, Australia and New Zealand, we see a number of countries exploring the possibility of outsourcing these services to the private sector in the future.

Specialist
outsourced services
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Market and strategy

Based mainly in the UK, G4S offers a range of outsourcing services, which together accounted for around 8% of group revenues in 2014.

We aim to offer innovative and cost-effective solutions to customers.

Cash solutions
Cash solutions
& secure logistics
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Market and strategy

The cash solutions business accounted for around 16% of group revenue in 2014. We are the market leader or number two in 54 of our 62 cash solutions markets. The main providers of similar services are a small number of international competitors in mainly developed markets. Our cash solutions business is integrated into our wider organisation and processes through shared customers, management structures and systems in many countries. The market is highly regulated, often by central banks, and the business requires complex infrastructure and significant expertise.

We aim to:
  • 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
  • use our developed market cash cycle expertise and track record to encourage central bank and financial institution outsourcing in emerging markets
  • continue the expansion of innovative technology such as CASH360TM for retail customers.

Corporate social responsibility at G4S

G4S plays an important role in society. We make a difference by helping people to operate in a safe and secure environment where they can thrive and prosper.

Our size and scale mean that we touch the lives of millions of people across the world and our goal is to ensure that we make a positive impact on the communities in which we work. We have addressed our three key priority areas in the Strategy in action section of our Annual Report:

Click on the pictures to explore our priority areas

Business ethics and anti-bribery and corruption
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Ethics image Business ethics and anti-bribery and corruption
Health and safety
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Health and safety image Health and safety
Human rights
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Human rights image Human rights

Performance highlights

Underlying revenue £6.8bn (2013: £6.5bn)
Total revenue £6.8bn (2013: £6.6bn)
Total cash generated by continuing operations £553m (2013: £496m)
Underlying PBITA £424m (2013: £393m)
Total PBITA £329m (2013: £23m)
Dividend per share 9.24p (2013: 8.96p)
Underlying EPS 13.6p (2013: 12.9p)
Total EPS 9.8p (2013: (24.7p))

Leveraging strong market positions...

We are a global business with large, established market positions in developed markets and outstanding positions in fast-growing emerging markets. Our emerging market businesses accounted for 36% of group revenues and 40% of profits in 2014.
Map Key
Market map key G4S Markets
Area Revenue Services
Africa 7% 1 2 3 5
Asia, Middle East 19% 1 2 3 5
Europe 21% 1 2 3 5
Latin America 10% 1 2 5
North America 20% 1 2 3
UK & Ireland 23% 1 2 3 4 5

Board of directors

John Connolly

John Connolly
Non-executive director / Chairman of the board

Ashley Almanza

Ashley Almanza
Executive director / Chief Executive

Adam Crozier

Adam Crozier
Non-Executive director

Mark Elliot

Mark Elliott
Non-executive director / Senior independent director

Grahame Gibson

Grahame Gibson
Executive director

Winnie Kin Wah Fok

Winnie Kin Wah Fok
Non-executive director

Himanshu Raja

Himanshu Raja
Executive director / Chief financial officer

Mark Seligman

Mark Seligman
Non-executive director / Deputy chairman

Paul Spence

Paul Spence
Non-executive director

Clare Spottiswoode

Clare Spottiswoode
Non-executive director

Tim Weller

Tim Weller
Non-executive director