NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE

16 November 2020

G4S plc (“G4S” or the “Company”)
Retail Cash Solutions (“RCS”)

The Board of G4S (the “Board”) announces that, today, the Company has published an online presentation http://www.g4s.com/RCS on its market-leading Retail Cash Solutions (RCS) business.

G4S Chief Executive Officer Ashley Almanza commented:

“In Retail Cash Solutions we have created a market-leading and extremely valuable business which has grown very strongly and profitably since we launched in 2015, producing $170 million of revenue and $30 million PBITA in 2019.

Through our patented KOYUS^TM software, RCS delivers a unique customer value proposition and we have established high and sustainable barriers to entry. We are highly confident in the ability of RCS to grow revenue at 25% per annum over the medium-term, attaining more than $600 million by 2025. And with a huge addressable market of $13 billion, RCS has significant further potential.

With its patented technology and strong growth, margins and cash flow conversion, RCS benchmarks favourably with financial technology and software services businesses that command premium ratings of over 20x 2021E EBIT in the market today. We believe that RCS provides G4S shareholders with material value upside.”

The Board of G4S believes that RCS represents exceptional unrecognised value within G4S. RCS is revolutionising global cash management with the potential to generate significant returns for G4S shareholders. Key highlights include:

1. Clear leadership in a large addressable market;
2. Unique proposition and recurring revenue model;
3. High and sustainable barriers to entry;
4. Very attractive financial characteristics; and
5. Material value upside

RCS significantly improves the efficiency, control and convenience of cash handling for retailers. Created and organically grown by G4S since 2015, RCS today manages more than $2 billion of cash on behalf of customers across c.10,000 installed locations in North America. RCS provides substantial benefits to customers and through its patented KOYUS^TM software platform has created high and sustainable barriers to entry. In 2019 RCS generated service gross margins of 34% and PBITA of $30 million. Our proprietary product and services can be rolled out to other geographic markets, and the total global opportunity exceeds $13 billion.

The Board has a number of clear medium-term financial targets for RCS which are set out below:

1. Growth – revenue growth of 25% per annum
2. Services Gross Margin – 35-40% services gross margin¹
3. Profitability – PBITA margin of 15-20%^1,2
4. Free Cash Flow – over 100% FCF conversion per annum^1,3

G4S is proud to have created this industry-leading software and service business, which delivers a number of valuable benefits for its customers, including, but not limited to:

• Reducing labour costs by 80%;
• Reducing deposits by 50%;
• Improving working capital with bank-owned cash⁴ and same day credit;
• Reducing transport costs by 40-60%;
• Freeing up to 80% of idle cash;
• Minimising cash leakage; and
• Maximising cash visibility and security

RCS already has a large number of existing contracts with blue-chip customers including four out of the top 10 US-based retailers, some of the largest in the world. RCS’s technology is integrated within customer cash handling devices, financial institutions and back office reconciliation systems to drive cash automation and optimisation.

Clear leadership in a large addressable market
The economics of cash management create an enormous market for RCS. Two trillion dollars of cash is currently in circulation in the US and approximately 70% of all payments globally are made in cash. The cost of managing cash to retailers and banks is high with more than $96 billion spent annually on retail cash handling in the US and Canada, equating to 9% of retail cash receipts, and with 5-10% of bank operating costs relating to cash handling. RCS offers a significantly more efficient option for retailers with the added benefit of enhanced ease and control.

G4S believes that the total addressable market (revenue opportunity) for RCS today is approximately $13.3 billion, comprising US Retail ($5.0 billion), US Banking Sector ($3.3 billion) and International ($5.0 billion).

The Board of G4S believes that RCS has a unique and highly differentiated offering which is unmatched by competitors.  When compared to software peers, hardware peers or traditional CIT players, competitors have a much narrower competitive offering, focused either on balancing and reconciliation or on logistics.

Unique proposition and recurring revenue model
RCS is a proprietary software and service platform which generates a fee per store, per month, with long-term contracts which are typically between 5-7 years in duration. These contracts underpin rapidly growing recurring service revenues for RCS, with recurring revenue of $117m achieved in 2019. Reflecting RCS’s unique, patented technology, G4S has confidence in future contract renewals with a contract retention rate in excess of 99% achieved on existing contracts.

RCS’s business model provides a highly visible growth profile. Despite a temporary pause in new installations due to the pandemic, RCS won a material new US contract, announced on 14 October 2020, and has a substantial revenue backlog. The business has now recommenced the roll out of its industry leading software and service solution across 11,450 new locations in North America. RCS has an asset-light business model and cash handling devices are typically purchased and owned by retailers and managed by RCS.

High and sustainable barriers to entry
The Board believes that RCS has a significant and sustainable competitive advantage. RCS today has undisputed leadership in the US big box market and our small box proposition is winning significant new customers. Our proprietary software platform (KOYUS^TM) and sophisticated banking partnerships are embedded within the RCS solution making it very difficult for another player to replicate G4S’s position. Our software is patented and the type of banking partnerships held by RCS require long and complex diligence processes in order to allow live data to be used in both retailer and banking accounting systems.

Very attractive financial characteristics
RCS has good revenue visibility from its rapidly growing installed base and a large order book provides confidence in our growth target. In addition to the 11,450 order book of installations, RCS has also agreed pilot programmes with new customers covering around 10,850 stores and is in active discussion with customers representing more than 10,000 additional stores. As a result, around 85% of 2021 revenue is already committed⁵, and G4S has a strategic roadmap for its targeted revenue in excess of $600m in 2025.

Material value upside
RCS benchmarks favourably with other financial technology and software services companies across key financial and operational metrics:

• growth;
• profitability;
• revenue visibility and sustainability;
• end-market dynamics; and
• barriers to entry

Financial technology and software companies command a premium valuation in the market today of more than 20x 2021E EBIT. The Board therefore firmly believes that RCS provides G4S shareholders with material value upside.

¹ Aspirational target which should not be construed as a profit forecast under the Takeover Code or interpreted as such.
² Margin can vary within this range depending on investment in growth.
³ Free cash flow as a percentage of PBITA.
⁴ Big box only.
⁵ Percentage of forecast revenue.

APPENDIX I
DEFINITIONS

APPENDIX II
BASES AND SOURCES

1                   Rounding

Values in this announcement have been rounded and accordingly may not add up to 100%. As a result of this rounding, the totals of the data presented in this document may vary slightly from the actual arithmetic totals of such data. Values are given to the stated number of decimal places.

2                   Currency

Unless otherwise stated USD or $ refers to US Dollars.

3                   Presentation of information

Unless otherwise stated consensus revenue and EBIT estimates and foreign exchange rates are sourced from FactSet Europe Limited (“FactSet”) as at the Latest Practicable Date.

4                   Information relating to G4S

Unless otherwise stated:

(i)            adjusted measures of profit and earnings are stated before the effects of separately disclosed and specific items; the related tax effects; and tax-specific charges or credits which have a material impact, such as those arising from changes in tax legislation;

(ii)           references to PBITA are to “Adjusted PBITA”, which excludes the effect of separately disclosed items (being restructuring and separation costs, goodwill impairment, amortisation of acquisition-related intangible assets and profits or losses on disposal or closure of businesses) and specific items, which the Group believes should be disclosed separately by virtue of their size, nature or incidence, as explained on page 53 of G4S’s integrated report and accounts, 2019;

(iii)          Free Cash Flow or FCF is calculated as movement in net debt before foreign exchange movements excluding the impact of acquisitions and disposals of subsidiaries / businesses and dividends paid to equity holders of the parent. Free Cash Flow or FCF Conversion is calculated as Free Cash Flow as a proportion of PBITA; and

5                   Additional Information

5.1              RCS has approximately 150 employees which is based on the employees that are working exclusively for Retail Cash Solutions as at September 2020 and is sourced from G4S’s internal reporting.

5.2              RCS has partnerships with 7 banks that are supporting retail customers as part of the RCS programme, and banks are generally reluctant to have multiple partners due to the long and complex diligence processes required as part of onboarding.

5.3              RCS has partnerships with 4 of the 5 largest US banks which is based on 4 of the banks with whom RCS has a partnership ranking among the top 5 largest US banks by consolidated assets, sourced from the list of Insured US Chartered Commercial Banks as of 30 June 2020 published by the Federal Reserve and available at https://www.federalreserve.gov/releases/lbr/current/.  

5.4              Banks represent a new sales channel for RCS.

5.5              RCS has an ongoing pilot in the US Banking sector.

5.6              The Group incurs no loss on initial sale of the cash handling device which is sourced from G4S’s internal reporting.

5.7              The reference to a 70% increase in cash holding for big box cash retailer customers  is based on the first five months of 2020 and is sourced from G4S’s internal reporting.

5.8              12 customers make up the committed order book of installations which is sourced from G4S’s internal reporting.

5.9              43 customers make up the pilot programmes and pipeline which is sourced from G4S’s internal reporting.

5.10          RCS’s high margins are driven by:

(i)            scale benefits with hardware providers;

(ii)           further cost reduction opportunities from large installed base, where the reference to a large installed based is sourced and based in section 6.19;

(iii)          pricing opportunities given market leadership, where the reference to market leadership is sourced and based in section 6.1;

(iv)         well-invested technology; and

(v)          high operating leverage, which is based on revenue growing at c.4x the rate of selling, general and administrative expenses between 2014 and 2019, and is sourced from G4S's internal reporting.

5.11          RCS’s recurring revenues increase as service revenues represent a higher proportion of total revenue.

6                   Bases and sources

6.1              The reference to RCS being market-leading refers to RCS’s leadership of the US big box market, based on number of big box installations and is sourced from G4S’s internal reporting.

6.2              The reference to RCS’s strong growth is based on revenue growth of 24% in 2019, which is calculated on the basis of total revenue growth excluding pass-through revenue (rounded to zero decimal places) and which is sourced from G4S’s internal reporting.

6.3              The reference to RCS producing $170 million revenue in 2019 is a reference to underlying revenue and is sourced and based in paragraph 6.48 of Appendix II of the Circular. Underlying results are defined as the adjusted results of the Group (i.e. stated before the effect of specific and separately disclosed items) excluding the results of onerous contracts and businesses that have been sold or closed in the current and comparative years.

6.4              The reference to RCS producing $30 million PBITA in 2019 is sourced and based in paragraph 6.49 of Appendix II of the Circular.

6.5              The reference to RCS’s patented KOYUS^TM software refers to RCS’s 9 patents and 19 copyrights / trademarks (which comprises both registered and pending copyrights / trademarks) which is based on RCS having:

(i)            9 pending patent applications for different inventions;

(ii)           4 trademarks (comprising both registrations and pending registrations); and

(iii)          15 copyrights (comprising both registrations and pending registrations),

each of which is sourced from G4S’s internal reporting.

6.6              The reference to RCS delivering a unique customer value proposition is based on RCS management’s internal assessment of the capabilities and offerings of its main competitors in its addressable market. Across its product and service offerings (including end-to-end solutions, breadth of customer offering, proprietary software, and banking partners and integration), this compares Retail Cash Solutions to:

(i)            software peers, encompassing businesses whose offering focusses on providing retail cash software services;

(ii)           hardware peers, encompassing businesses whose offering focusses on providing retail cash hardware products; and

(iii)          traditional CIT peers, encompassing businesses whose offering focusses on the physical transfer of cash and items of value from one location to another.

6.7              The reference to RCS targeting revenue growth of 25% per annum over the medium-term, and revenue in excess of $600m in 2025 is based on the following strategic roadmap:

(i)            Grow big box by (a) increasing market penetration in US / Canada; (b) winning product proposition; and (c) pricing opportunity as customer base expands;

(ii)           Grow small and medium box by expanding to medium and large retailers with small box format;

(iii)          Expand product and services by (a) commercialising new banking sector hardware and software solution; and (b) continuing to scale banking relationships, enhancing value proposition to retailers; and

(iv)         Expand internationally by (a) expanding outside of the US with existing and new customers; and (b) taking advantage of significant whitespace opportunity with c.70% of worldwide transactions settled in cash, which is sourced and based in section 6.33.

6.8              The reference to a huge addressable market of $13 billion refers to the total addressable market (being US Retail, US Banking Sector and International) and is sourced and based as follows (the numbers below are rounded to one decimal place and total $13.3bn):

(v)          $5.0bn US Retail which is sourced and based in paragraph 6.50 of Appendix II of the Circular;

(vi)         $3.3bn US Banking Sector which is based on G4S’s internal analysis which is based on 2017 US census data; and

(vii)        $5.0bn International which is based on an assessment provided to RCS by a third party consultant.

6.9              The reference to patented technology is sourced and based in section 6.5.

6.10          The reference to RCS’s strong growth rates is sourced and based in section 6.2.

6.11          The reference to RCS having strong margins is based on a 2019 PBITA margin of 18% (rounded to zero decimal places) which is based on:

(i)            2019 revenue of $170m which is sourced and based in section 6.3; and

(ii)           2019 PBITA of $30m which is sourced and based in paragraph 6.49 of Appendix II of the Circular.

6.12          The reference to strong cash flow conversion is based on 113% Free Cash Flow conversion (which is rounded to zero decimal places) in 2019 which is based on:

(i)            2019 Free Cash Flow of $34.0m; and

(ii)           2019 PBITA of $30.1m.

in each case sourced from G4S’s internal reporting.

6.13          The reference to financial technology and software services companies commanding a premium rating of over 20x 2021E EBIT is sourced and based as follows (rounded to one decimal place):

(i)            FIS’s EV / 21E EBIT of 20.5x, which is based on: (a) an EV of $107,493m, which is based on a market capitalisation of $89,074m (sourced from Bloomberg as at the Latest Practicable Date), plus short-term borrowings of $3,144m (page 2), plus current portion of long-term debt of $1,832m (page 2), plus long-term debt excluding current portion of $15,213m (page 2), plus redeemable noncontrolling interest of $176m (page 2), plus noncontrolling interest of $14m (page 2), minus cash and cash equivalents of $1,826m (page 2), minus investments of $134m (page 20) in each case sourced from FIS’s Form 10-Q SEC Filing for the quarterly period ended 30 September 2020; and (b) 2021 median consensus EBIT of $5,245m, sourced from FactSet as at the Latest Practicable Date;

(ii)           Fiserv’s EV / 21E EBIT of 17.5x, which is based on: (a) an EV of $90,525m, which is based on a market capitalisation of $71,978m (sourced from Bloomberg as at the Latest Practicable Date), plus short-term and current maturities of long-term debt of $365m, plus long-term debt of $20,894m, plus redeemable noncontrolling interest of $260m, plus noncontrolling interest of $737m, minus cash and cash equivalents of $937m, minus investments in unconsolidated affiliates of $2,772m, in each case sourced from page 3 of Fiserv’s Form 10-Q SEC Filing for the quarterly period ended 30 September 2020; and (b) 2021 median consensus EBIT of $5,183m, sourced from FactSet as at the Latest Practicable Date;

(iii)          Temenos’ EV / 21E EBIT of 29.7x, which is based on: (a) an EV of $10,193m, which is based on a market capitalisation of $9,182m (sourced from Bloomberg as at the Latest Practicable Date), plus current borrowings of $24.56m, plus non-current borrowings of $1,089.472m, plus retirement benefit obligations of $12.228m which are taxed at the Switzerland corporate tax rate of 14.84% (sourced from the KPMG corporate tax rate tables, available at https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html), minus cash and cash equivalents of $113.338m, in each case sourced from page 7 of Temenos’s Q3 2020 Results Press Release; and (b) 2021 median consensus EBIT of $343m, sourced from FactSet as at the Latest Practicable Date;

(iv)         ACI Universal Payments’ EV / 21E EBIT of 26.3x, which is based on: (a) an EV of $4,919m, which is based on a market capitalisation of $3,803m (sourced from Bloomberg as at the Latest Practicable Date), plus borrowings of $1,268.555m (page 17), minus investments in associates of $18.8m (page 11), minus cash and cash equivalents of $133.845m (page 3), in each case sourced from ACI Universal Payments’ Form 10-Q SEC Filing for the quarterly period ended 30 September 2020; and (b) 2021 median consensus EBIT of $187m, sourced from FactSet as at the Latest Practicable Date;

(v)          Bottomline Technologies’ EV / 21E EBIT of 24.3x, which is based on: (a) an EV of $1,931m, which is based on a market capitalisation of $1,934m (sourced from Bloomberg as at the Latest Practicable Date), plus borrowings of $180m, minus cash, cash equivalents and marketable securities of $197.425m, in each case sourced from page 9 of Bottomline Technologies’ Q1 2020 Earnings Press Release for the quarterly period ending 30 September 2020, plus a pension liability of $20.259m, sourced from page 71 of Bottomline Technologies’ Form 10-K SEC Filing for the annual period ended 30 June 2020, which is taxed at the US corporate tax rate of 27.0% (sourced from the KPMG corporate tax rate tables, available at https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html); and (b) 2021 median consensus EBIT of $80m, sourced from FactSet as at the Latest Practicable Date; and

(vi)         an average EV / 21E EBIT of 23.6x (rounded to one decimal place) based on paragraphs (i) – (v) above.

6.14          The reference to RCS’s clear leadership is sourced and based in section 6.1.

6.15          The reference to a large addressable market is sourced and based in section 6.8.

6.16          The reference to RCS having a recurring revenue model is based on c.75% average service revenue (expressed as a percentage of total revenue, excluding pass-through revenue) in 2018, 2019 and 2020 (projected) and is sourced from G4S’s internal reporting. Service revenues, because they are subscription-based, are recurring in nature.

6.17          The reference to very attractive financial characteristics refers to RCS’s 2019 PBITA margin of 18% and cash conversion of 113%, sourced and based in sections 6.11 and 6.12.

6.18          The reference to more than $2 billion cash managed is based on the volume of cash managed in customers’ stores as at 18 May 2020 and is sourced from G4S’s internal reporting.

6.19          The reference to c.10,000 installed locations is based on the total number of big box locations and small box locations in North America and is sourced from G4S’s internal reporting.

6.20          The reference to patented KOYUS^TM software is sourced and based in section 6.5.

6.21          The reference to service gross margins of 34% (rounded to zero decimal places) in 2019 is calculated on the basis of:

(i)            2019 gross profit for services of $40.2m; and

(ii)           2019 services revenue of $116.8m;

in each case sourced from G4S’s internal reporting.

6.22          The reference to RCS generating PBITA of $30 million is sourced and based in section 6.2.

6.23          The reference to total global opportunity exceeding $13 billion is sourced and based in section 6.8.

6.24          The reference to RCS being industry-leading is sourced and based in section 6.1.

6.25          The reference to “Reducing labour costs by 80%” is sourced and based in paragraph 6.52(i) of Appendix II of the Circular;

6.26          The reference to “Reducing deposits by 50%” is sourced and based in paragraph 6.52(ii) of Appendix II of the Circular;

6.27          The reference to “Improving working capital with same day credit” is sourced and based in paragraph 6.52(v) of Appendix II of the Circular;

6.28          The reference to “Reducing transport costs by 40-60%” is sourced and based in paragraph 6.52(iii) of Appendix II of the Circular; and

6.29          The reference to “Freeing up to 80% of idle cash” is sourced and based in paragraph 6.52(iv) of Appendix II of the Circular.

6.30          The reference to RCS having four out of the top ten US-based retailers as customers is based on the relevant RCS customers’ rankings among the top ten largest US retailers by 2019 revenue, sourced from the Top 100 Retailers 2020 List published by the National Retail Federation, available at https://nrf.com/resources/top-retailers/top-100-retailers/top-100-retailers-2020-list.  

6.31          The reference to the largest retailers in the world is based on RCS having customers ranking in the top 15 global retailers, based on the top global retailers by 2019 revenue, sourced from the Top 50 Global Retailers 2020 List published by the National Retail Federation, available at https://nrf.com/resources/top-retailers/top-50-global-retailers/top-50-global-retailers-2020. 

6.32          The reference to two trillion dollars of cash currently being in circulation in the US is based on $1.99tn of Federal Reserve notes in circulation as at the Last Practicable Date, rounded to one significant figure, and sourced from the federal reserve currency website, available at https://www.federalreserve.gov/faqs/currency_12773.htm.

6.33          The reference to approximately 70% (rounded to one significant figure) of all payments globally being made in cash is based on the 2019 share of global payment transactions executed in cash and is sourced from page 6 of The 2020 McKinsey Global Payments Report, available at https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/accelerating%20winds%20of%20change%20in%20global%20payments/2020-mckinsey-global-payments-report-vf.pdf.

6.34          The reference to more than $96bn spent annually on retail cash handling in the US and Canada is based on the amount spent in 2017 is sourced from page 10 of the “Cash Multipliers: How reducing the costs of cash handling can enable retail sales and profit growth” report published by IHL Group in 2018.

6.35          The reference to 9% of retail cash receipts spent on cash handling (rounded to one significant figure) is based on the percentage in 2017 and is sourced from page 10 of the “Cash Multipliers: How reducing the costs of cash handling can enable retail sales and profit growth” report published by IHL Group in 2018.

6.36          The reference to 5-10% of bank operating costs relating to cash handling is based on the percentage in 2018 and sourced from the article “Attacking the cost of cash” published by McKinsey on 20 August 2018 and available at https://www.mckinsey.com/industries/financial-services/our-insights/attacking-the-cost-of-cash.

6.37          The reference to the total addressable market (revenue opportunity) for RCS being approximately $13.3 billion, comprising US Retail ($5.0 billion), US Banking Sector ($3.3 billion) and International ($5.0 billion) is sourced and based in section 6.8.

6.38          The reference to RCS having a unique and highly differentiated offering which is unmatched by competitors is sourced and based in section 6.6.

6.39          The reference to long-term contracts which are typically between 5-7 years in duration is based on the typical contract length of all RCS customer contracts and is sourced from G4S’s internal reporting.

6.40          The reference to rapidly growing service revenues is based on RCS having generated service revenue of $36m in 2016 and $117m in 2019 which is based on annual service revenues (which, because they are subscription-based, are recurring in nature), rounded to the nearest million and sourced from G4S’s internal reporting. This equates to a CAGR of 48% (rounded to zero decimal places).

6.41          The reference to recurring service revenue of $117 million in 2019 is sourced and based in section 6.40.

6.42          The reference to RCS’s unique patented technology is sourced and based in section 6.5.

6.43          The reference to a contract retention rate in excess of 99% having been achieved on existing contracts is based on only one retailer’s contract having been terminated prior to the expiry date of the contract and is sourced from G4S’s internal reporting.

6.44          The reference to RCS’s industry-leading software-and-service solution is based on technology that comprises:

(i)            proprietary cloud-based cash management software, which automates the compilation of cash till floats and processing;

(ii)           in-store accounting and banking systems, which are deeply embedded in customers’ systems;

(iii)          automatic bank account crediting, where the retailer obtains same day credit for cash; and

(iv)         end-of-day reporting and prediction tools, that use sophisticated AI and machine learning to drive efficiency.

6.45          The reference to an order book of 11,450 new locations comprises:

(i)            the order book of c.10,500 which is sourced and based in paragraph 6.51 of Appendix II of the Circular; and.

(ii)           a further order book as at the Last Practicable Date of c.950 which is sourced from G4S’s internal reporting.

6.46          The reference to RCS’s significant and sustainable competitive advantage is sourced and based in section 6.6.

6.47          The reference to undisputed leadership in the US big box market is sourced and based in section 6.1.

6.48          The references to KOYUS^TM and to patented software is sourced and based in section 6.5.

6.49          The reference to RCS’s rapidly growing installed base is sourced from G4S’s internal reporting and based as follows (numbers are rounded to the nearest 50 units):

(iii)          2016 installed base of 3,900 units;

(iv)         2017 installed base of 6,050 units;

(v)          2018 installed base of 6,900 units;

(vi)         2019 installed base of 8,300 units;

(vii)        2020 installed base of 10,000 units; and

(viii)       2021-2023 projected installed base of c.42,450, based on: (a) the 2020 installed base of 10,000 units; (b) a committed order book of c.11,450 units; (c) pilots with new customers of c.10,850 units, of which c.4,800 are currently running and c.6,050 are committed but not yet started; and (d) a pipeline of opportunities of c.10,150 units.

6.50          The references to a large order book and to an order book of c.11,450 installations are sourced and based in section 6.45.

6.51          The reference to pilot programmes with new customers covering around 10,850 stores is based on:

(i)            c.4,800 pilot programmes that are currently running; and

(ii)           c.6,050 pilot programmes that are committed but have not yet started,

in each case sourced from G4S’s internal reporting.

6.52          The reference to active discussions with customers representing more than 10,000 additional stores is based on c.10,150 stores and sourced from G4S’s internal reporting.

6.53          The reference to c.85% of 2021 revenue already committed is based on the percentage of forecast 2021 revenue that is already committed (which comprises service revenue from existing contracts, and equipment and service revenue from the order book) and is sourced from G4S’s internal reporting.

6.54          The reference to financial technology and software services companies commanding a premium valuation of more than 20x 2021E EBIT is sourced and based in section 6.13.

FURTHER INFORMATION

G4S Joint Lead Financial Advisers
Citigroup Global Markets Limited
J.P. Morgan Cazenove


G4S Financial Advisers
Lazard & Co., Limited
Goldman Sachs International

G4S Legal Advisers
Linklaters LLP

Media Advisers
Brunswick

Notes to Editors:
G4S is the leading global security company, specialising in the provision of security services and solutions to customers. Our mission is to create material, sustainable value for our customers and shareholders by being the supply partner of choice in all our markets.

G4S is quoted on the London Stock Exchange and has a secondary stock exchange listing in Copenhagen. After taking account of the businesses being sold in the year, G4S is active in more than 80 countries and has around 533,000 employees. For more information on G4S, visit www.g4s.com.

Important Notices
Citigroup Global Markets Limited ("Citi"), which is authorised by the Prudential Regulation Authority (”PRA”) and regulated in the UK by the Financial Conduct Authority (”FCA”) and the PRA, is acting exclusively for G4S and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than G4S for providing the protections afforded to clients of Citi nor for providing advice in relation to any matter referred to herein.

J.P. Morgan Securities plc (which conducts its UK investment banking business as J.P. Morgan Cazenove) ("J.P. Morgan Cazenove") which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting as financial adviser exclusively for G4S plc and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than G4S plc for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to any matter referred to herein.

Lazard & Co., Limited (“Lazard”), which is authorised by the PRA and regulated in the United Kingdom by the FCA and the PRA, is acting exclusively as financial adviser to G4S and no one else in connection with the matters set out in this announcement and will not be responsible to anyone other than G4S for providing the protections afforded to clients of Lazard nor for providing advice in relation to the matters set out in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.

Goldman Sachs International (“Goldman Sachs”), which is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the PRA and the FCA, is acting exclusively for G4S and no one else in connection with the matters set out in this announcement. Goldman Sachs will not be responsible to anyone other than G4S for providing the protections afforded to clients of Goldman Sachs nor for providing advice in relation to any matter referred to herein.

Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 Disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.g4s.com, by no later than 12 noon (London time) on the business day following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.