Applying our business model in new markets
Ian Brown, Group Head Investor Relations
Leveraging our Group-wide capabilities, customer focus and acquisitions to strengthen our presence in Canada.
Our strategy in action - international
Our ambition is to grow our international revenues to 50% of our group. Taking our UK expertise into attractive international markets in a key part of our strategy. Our recent contract win in Canada is a great example of this strategy in action.
Canada is an example of where we are working with our customers to enhance their defence and security capabilities. Canada is an attractive market with increasing defence spending. The doubling of capital projects to C$8bn by 2021, and the need to modernise air, land and sea ranges for fifth generation platforms are key priorities. QinetiQ’s state-of-the-art target systems facility in Medicine Hat, Alberta and consulting presence in Ottawa, provide Canadian capabilities that allow us to offer our complete value chain of products to support the Canadian Department of National Defence. In FY19 we won a C$51m contract to provide unmanned aerial systems that will provide enhanced situational awareness for the Royal Canadian Navy and Canadian Special Operations Forces. We secured this work by drawing on the full breadth of expertise and capability across the QinetiQ Group. As we build our presence and strengthen our relationships in Canada we will be able to move up our value chain from discrete products and services to integrated capability generation and assurance.
As we build our presence in Canada we are able to move up our value chain
Seed presence overseas through export sales
By exporting our products and services, we build relationships, brand awareness, and our reputation as a technology innovator in new markets.
Build relationship as an advisor, leveraging unique UK experience
Once our capabilities are better understood, and customers understand how we can support them, we typically build a reputation as an independent engineering advisory services provider, or ‘customer friend’.
3.Test, Evaluation & Assurance
Use customer insight to offer further services
Our advisory services activities allow us to become intimate with our customers’ concerns, challenges and future requirements. This allows us to offer further value added services, typically leveraging our Group-wide R&D and T&E capabilities.
4.Integrated capability generation & assurance
Provide a fully integrated offer
Co-investing with our customer to create enhanced in-country capabilities positions QinetiQ as a long-term, fully integrated capability generation and assurance partner.
Strategy In Action
Our work in the UK has created a strong reference point for our Canadian customer. Being able to leverage this experience into countries such as Canada is an intrinsic part of our UK investment strategy.
We have accelerated our progress in Canada through the 2016 acquisition of QinetiQ Target Systems, which brought customer relationships and an indigenous, state-of-the-art product design, prototype, testing and manufacturing facility into QinetiQ.
Our understanding of autonomous systems and how to integrate sub-systems and sensors onto them was a key component of our offer. Our independence allowed us to partner with leading technology companies to meet our customers’ requirements.
Our business model in action
- Our ability to integrate various systems and platforms was a key reason for the award of our largest contract to date in Canada
- Our advisory services business understands the complexity of defence systems and provides advice for making long-term procurement decisions
- QinetiQ Target Systems has an advanced product manufacturing facility in Medicine Hat, Alberta
- QTS is able to cost-effectively represent key threats to test and evaluate systems and provide realistic training
- Understanding the systems our customer uses, and an ability to cost-effectively emulate the threats they must respond to, are key aspects of creating operational readiness
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