Serco Group plc · LSE:SRP
Serco — Cazenove conference (May 2005)
22 slides from Serco's conference presentation, May 4, 2005
Slide 1: Serco Group plc Public Sector Opportunities
Serco Group plc Public Sector Opportunities 4 May 2005 Kevin Beeston Executive Chairman
Slide 2: Profile
Profile Delivering managed public services for over 40 years Broad portfolio of international government clients Track record of high contract retention and strong organic growth Low capital requirement business Political and economic imperatives are expanding addressable markets
Slide 3: Where we operate
Where we operate
Slide 4: Segmental analysis – 2004 proforma turnover
Segmental analysis – 2004 proforma turnover Sectors Civil government 34% Defence 32% Private sector 10% Transport 18% Science 6% Geography UK 71% Asia Pacific 8% Europe and Middle East 9% North America 12% Includes ITNET and RCI
Slide 5: Track record of growth
Track record of growth 1,637 1,556 1,326 Turnover £m Including joint ventures 1,141 958 Compound growth rate 25% 808 688 572 462 368 289 219 176 126 82 59 47 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
Slide 6: Global drivers
Global drivers 1. Drive to increase quality and productivity 2. Increasing acceptance of private sector Increasing demand for quality public services Ideological barriers diminishing in the face of Growing middle class positive experience Increasing investment in Global spread of infrastru
Slide 7: Interest in PPPs is growing around the world
Interest in PPPs is growing around the world UK acted as testing ground for public private partnerships Outsourcing estimated at up to £60bn by 2006/7 North American federal and state governments reforming services in face of budget deficits Germany increasingly embracing PPPs Emerging opp
Slide 8: Customer requirements are evolving
Customer requirements are evolving Contracts specify outputs, not inputs Move to increasingly sophisticated procurement bundled and integrated services Growing IT element in many bids
Slide 9: Growth drivers - defence
Growth drivers - defence 32% UK defence budget is under pressure, increasing outsourcing opportunities accessible market expected to more than double by 2010 US Departments of Defence and Homeland Security have healthy budgets but also have More complex and far reaching missions Ageing wor
Slide 10: Growth drivers - transport
Growth drivers - transport 18% Growing emphasis on integration of transport rail / light rail / road Recompetition of UK rail franchises Light rail opportunities in UK and overseas Traffic management and road pricing is a growth market globally
Slide 11: Growth drivers - science
Growth drivers - science 6% Expect accessible market to double by 2008 Nuclear Decommissioning Authority formed April 2005 Responsible for all UK public sector civil sites Annual budget £2.2bn of which 90% paid to contractors Total decommissioning cost estimated at £50bn Regional Develop
Slide 12: Growth drivers – home affairs
Growth drivers – home affairs 34% Integration of existing agencies to improve outcomes Offender management (NOMS) Organised crime (SOCA) Growing use of technology Electronic monitoring planned to double by 2008 Market testing of UK public sector prisons Further outsourcing of prison se
Slide 13: Growth drivers - education
Growth drivers - education 34% Private sector provides £4bn of education services and expected to double Children Act merging education and social services Substantial investment in school infrastructure BSF estimated at £2bn p.a. for 15 years £9.4bn into primary schools in 2005 Budget I
Slide 14: Growth drivers - health
Growth drivers - health 34% UK government spent more than £80bn on health in 2004/5 NHS spending to increase by 7% p.a. over next three years Growing emphasis on primary care and social services Further opportunities in PFI hospital projects Emerging opportunity in chronic disease manageme
Slide 15: Our vision
Serco is uniquely positioned Our vision to be the leading service company in our chosen markets
Slide 16: Our business model
Serco is uniquely positioned Our business model long term relationships in which there is opportunity for continuous improvement, organic growth and value creation
Slide 17: Our business offering
Serco is uniquely positioned Our business offering assured delivery of services, innovation and organisational change to help our clients in achieving their ambitions
Slide 18: Geographical diversity
Serco is uniquely positioned Geographical diversity UK 71% Asia Pacific 8% Europe and Middle East 9% 2004 proforma turnover North America 12% Operations in more than 30 countries Able to take advantage of global trends Enhanced footprint in US through RCI acquisition
Slide 19: Sectoral diversity
Serco is uniquely positioned Sectoral diversity Defence 32% Civil government 34% 2004 proforma turnover Private sector 10% Transport 18% Science 6% No target to grow in any one sector Sectoral spread brings robustness Able to choose best opportunities wherever they arise
Slide 20: Transfer of best practice
Serco is uniquely positioned Transfer of best practice Management expertise can be transferred both within and between sectors Robust bid processes leverage experience from across the group Serco Best Practice Centre Training and professional development
Slide 21: Track record of delivery
Serco is uniquely positioned Track record of delivery High level of organic growth with satisfied customers Win rates of more than 90% for rebids and 1 in 2 for new bids Examples of improved outcomes for customers Walsall – fastest educational turnaround on record Merseyrail – record relia
Slide 22: Questions and Answers
Summary Our markets are expanding around the world Serco is uniquely positioned to take advantage Geographical diversity Sectoral diversity Ability to transfer best practice Track record of delivery We expect strong and profitable growth for the foreseeable future Questions and Answers