G4S plc

G4S to resume dividend for 2021 with clear potential for significant further cash returns to shareholders - Seite 4

As a result, we are also confident in our ability to deliver more than £1bn of free cash flow from 2021-2025⁽²⁾.

Confidence in our ability to return significant cash to G4S shareholders

The positive outlook for free cash flow generation enables us to resume dividends for 2021, while targeting leverage in the range of 2.0-2.5x. Specifically:

• Dividends to resume for 2021 onwards: the Board intends to resume dividends from 2021 onwards, in line with its existing dividend policy of attaining 2.0x cover; and
• Allocation of surplus capital: we are committed to disciplined capital allocation. There is clear potential for significant further cash returns to shareholders, arising from both strong free cash flow generation and any disposal proceeds.

G4S is well positioned for a significant re-rating

The Board believes that G4S has significant potential to re-rate, in particular:

• G4S has been fundamentally repositioned and today is a focused global leader in security;
• Our Secure Solutions business (93% of revenues) has a large Integrated Security business which is driving above market growth;
• In Retail Cash Solutions we have created a substantial, high-growth business with material value upside;
• The Company’s performance and prospects already compare very favourably with its closest peer, Securitas, which has traded at a 3 year average multiple of 10.5x LTM EBITDA pre COVID-19; and
• The positive outlook for free cash flow generation supports significant cash returns to shareholders.

In addition, the recent positive movement in global equity markets, above all in relation to value stocks, reflects the improving macro- economic outlook.

GardaWorld’s Offer does not remotely reflect G4S’s fundamental value, let alone its value to GardaWorld and BC Partners

In 2019, BC Partners, now the majority shareholder of GardaWorld, paid a multiple of 11.2x LTM EBITDA for its acquisition of GardaWorld. The 190p Offer for G4S is very significantly below this value at 7.7x LTM EBITDA, despite G4S being a far superior business to GardaWorld.

GardaWorld would benefit immeasurably from the global scale that G4S would provide and from very significant operational and financial synergies. The Offer captures these benefits for BC Partners and GardaWorld, without providing you, the owners of G4S, with fair value.

Acquiring G4S at a significant discount to fair value would quite simply allow BC Partners and GardaWorld to acquire a global leader in security at your, our shareholders’, expense.