Serco Group Plc · LSE:SRP
Serco — UBS presentation September 2010
28 slides from Serco's conference presentation, Sep 15, 2010
Slide 1: Building new “home markets” around the world
Building new “home markets” around the world Clive Barton Group Marketing Director 15 September 2010 Advise | Design | Integrate | Deliver
Slide 2: Agenda
Agenda Overview of our business and strategy 1H 2010 results highlights Successfully building new “home markets” in – Australia – Middle East – Americas 1
Slide 3: Our business
Our business Focused on delivery of front-line, essential services Over 40 years’ experience in people-led change management Strong public service ethos Governments around the world tackling issues of security, health, education, environment and growth Well placed to help our customers imp
Slide 4: Continued focus on strategy underpins growth
Continued focus on strategy underpins growth Build a balanced portfolio – Reduces our exposure to fluctuations in individual markets – 700 contracts; Largest c7% of revenue; top 10 account for 25% of revenue – c40% of revenue outside UK – Long-term contracts and substantial order book provide exce
Slide 5: Strong financial performance – revenue and profit
Strong financial performance – revenue and profit Revenue Adjusted operating profit 3,970 230 165 3,124 Margin 2,811 142 +17bps 2,548 +9.8% 2,140 124 1,950 123 110 £m £m 1,491 77 1,349 1,236 66 59 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 half year full year Note: Adjusted operating profit i
Slide 6: Strong financial performance – free cash flow
Strong financial performance – free cash flow 137 98 94 93 £m 85 51 33 29 26 2006 2007 2008 2009 2010 half year full year 5
Slide 7: Continued high level of bidding and substantial order book
Continued high level of bidding and substantial order book Won business valued at £2.2bn in H1 Good growth from small and medium-sized wins and extensions Won 90% of rebids and 1 in 2 new bids Order book stands at £16.7bn (30 June 2010) Substantial opportunity pipeline stands at £28bn 6
Slide 8: Excellent revenue visibility supported by order book
Excellent revenue visibility supported by order book At 30 June 2010 Order Extensions Preferred of total book and rebids bidder 49% 21% 1% 2012: 71% 62% 20% 2% 2011: 84% 93% 4% 1% 2010: 98% 7
Slide 9: Substantial opportunities for growth
Substantial opportunities for growth Established markets growing and new markets opening Skills and capabilities increasingly in demand Business organised and enabled to grow Expanding our portfolio, building new home markets 8
Slide 10: Successfully building new “home markets”
Successfully building new “home markets” UK US Australia Middle East Civil Government 9 9 9 - Offender management 9 9 - Homeland Security 9 9 9 IT & BPO 9 9 9 Transport 9 9 9 9 Defence 9 9 9 Health 9 9
Slide 11: Strong growth across our markets
Strong growth across our markets 1H 2005 £1,075m 1H 2010 £2,140m 18% 14% 9% 15% CAGR 62% 77% 20% United Kingdom United States Other countries
Slide 12: Building a new home market in Australia
Building a new home market in Australia Australia: c.7% of Group revenue 30% 38% 32% Defence Civil Government Transport 11
Slide 13: Australia – Defence
Australia Defence A presence on every operational and training base in Australia Supporting the Australian Defence Force – HMAS Watson – Medical logistics – Services to the RAAF Defence Maritime Services Serco Sodexo Defence Services (SSDS) 12
Slide 14: Australia – Transport
Australia Transport Rail – Great Southern Rail Road – Traffic management – Traffic information 13
Slide 15: Australia – Home Affairs: Justice
Australia Home Affairs Justice – Acacia Prison – Borallon Correctional Centre 14
Slide 16: Australia – Home Affairs: Immigration
Australia Home Affairs Immigration – Immigration Detention Centres – Immigration Residential Housing and Immigration Transit Accommodation 15
Slide 17: Australia – Opportunities
Australia Opportunities Justice – Acacia prison extension – New build and existing publicly run prisons Defence – Warehousing, distribution and equipment maintenance review Health – Non clinical and support services 16
Slide 18: Building a new home market in the Middle East
Building a new home market in the Middle East Middle East: c.3% of Group revenue 40% 60% Metro Air Traffic Services 17
Slide 19: Middle East – Air Traffic Services
Middle East Air Traffic Services Air Traffic Control – Across the UAE and in Bahrain – Operate at 6 major international airports – Recently expanded 10 year Dubai ATC contract by £3.5m pa Training, systems and consultancy 18
Slide 20: Middle East – Transport
Middle East Transport Dubai Metro – Highly successful start in September 2009 – Exceptionally high levels of performance Further recent contract wins – Dubai Palm Monorail operation – Makkah Metro consultancy – Further journey planner contracts 19
Slide 21: Middle East – Opportunities
Middle East Opportunities Further geographical expansion in the Middle East Significant planned infrastructure development across the region – Transport, including metro, bus and air traffic control – Healthcare – Education 20
Slide 22: Building a new home market in the Americas
Building a new home market in the Americas Americas: c.21% of Group revenue 13% 27% 60% Defence and intelligence Civil Government Transport and other 21
Slide 23: Americas
Americas US$300bn per annum federal government services market Serco Americas has tripled in size since 2006, with 2010 E revenue of approximately US$1.5bn A top 30 prime IT contractor to the US Federal government (Source: Washington Technology) Serve military, intelligence agencies, and fed
Slide 24: Americas – Defence
Americas Defence Serve all branches of the military – Business evenly split between US Army, Navy and Air Force Major contracts include: – US Army HR Solutions – US Air Force Space Command – US Navy Space and Naval Warfare Systems Command 23
Slide 25: Americas – Federal civilian agencies
Americas Federal civilian agencies Support 14 civilian government agencies and 18 independent agencies Customers include: – Dept of Homeland Security [picture to come] – Department of State – US Postal Service – Department of Commerce 24
Slide 26: Americas – Transport
Americas Transport Operate air traffic control towers at 64 sites for Federal Aviation Administration Driver Examination Services in Ontario Traffic management in Georgia Parking services and fleet management 25
Slide 27: Americas – Opportunities
Americas Opportunities Government IT upgrade programmes Cyber-security Intelligence capabilities support Trend towards larger contract vehicles Submitted bids valued at more than US$3bn Pipeline of over US$9bn of opportunities 26
Slide 28: Summary
Summary Continued strong performance in 1H 2010 Increasing demand for our skills and capabilities Strong track record of delivering essential services Successfully building new “home markets” around the world A broad portfolio, well positioned for the future 27