A changing market environment
FY17 was another year in which threats to global security from both state and non-state actors increased. Governments are seeking help with the rapid development of new capabilities to defeat emerging threats and ensure they meet their primary responsibility to protect and safeguard the lives of their citizens. Our expertise in science and engineering is particularly relevant in this context; we also play a vital role in making connections, be they across technologies, domains, supply chains or internationally.
As a company we have a solid foundation to build on, because our core competences are well matched to emerging themes in our markets. We have considerable breadth and depth of knowledge and capability that we can deliver for our customers, particularly in test and evaluation, and science and technology. Not only are our people critical to sovereign capability, we are also experienced in delivering more for less and responding to new challenges through innovation in services, products and business models. Last year our customer satisfaction scores remained strong at more than eight out of ten. Customers have requirements we can meet if we remain sufficiently agile and responsive to connect their requirements with the strength and depth of our core technical and engineering competences.
Our vision and strategy
Our vision is “to be the chosen partner around the world for mission-critical solutions, innovating for our customers’ advantage.” To realise our vision we are implementing our three strategic priorities designed to grow the Company by focusing on our primary UK customer, on international customers and on innovation.
Our strategy is inherently outward looking, based on the needs of our customers now and in the future and our customer satisfaction scores increased this year. To meet future customer needs, we are prioritising the rapid development of new capabilities to defeat emerging threats by embracing value-creating innovation. We are also driving greater value for money for our customers, improving services and delivering savings in parallel. To do this we connect supply chains and choose the right strategic partners from across industry with complementary capabilities to ours so that we can offer competitive and market-leading solutions. As our total order intake and backlog demonstrate, we have been building positive momentum with the implementation of this strategy during the year.
We have refined our strategy in its first year of implementation. It remains built on three strategic pillars:
We will lead and modernise the UK defence test and evaluation enterprise by working in partnership with Government and prime contractors.
Delivering strong T&E capability is critical to ensuring reliable, flexible and affordable delivery of military capability to protect national interests. By engaging with our customers, we have made positive progress, signing new agreements which nearly double our order book to more than £2bn and significantly improving revenue visibility and therefore the risk profile of our Company.
The objective of this vision is to deliver future military capability for the next decade and beyond, addressing current and emerging threats. This will provide a platform for growth in the UK T&E market, which we estimate to be double that which we currently access, and improve our ability to win work with customers outside the UK.
We will build an international company that delivers additional value to our customers by developing our home markets, creating new home markets and exporting.
At the beginning of FY17, we established an International business focused on developing and securing growth opportunities in prioritised territories around the world. This new International business has been established as an ‘enabler’ for the Group, ringing greater coherence and focus to our activities internationally in relation to both organic and inorganic efforts, and encouraging a more global mind-set.
We will invest in and apply our core competences for customer advantage in defence and commercial markets.
As customers demand more capability, and as the boundaries between defence and commercial technologies become increasingly blurred, value-creating innovation is vital to maintaining our distinctiveness in the marketplace. Technical innovation has been at the heart of QinetiQ’s success to date, and will remain a key source of growth into the future. However, turning creativity and technical innovation into tangible value for our customers increasingly requires innovative thinking across the broader range of activities.