Currency News™ spoke to CEO Adam Lawrence, who joined CPS from The Royal Mint last year, about recent developments and where he sees the company going in the next few years.
Q: First of all, can you provide some background on your career to date?
A: I began my professional career as a chartered accountant with Price Waterhouse and hold an MBA from Monash Mt Eliza Business School. From 1995-2008, I held a number of senior positions with Catalent Pharmaceuticals for businesses located across Asia Pacific, Europe and the US. I joined The Royal Mint in 2008,and was appointed CEO in January 2011. Last October, I moved to become CEO of CPS.
Q: What was it that attracted you about CPS?
A: CPS was just such a great opportunity – great products and technology, really exciting ideas, great vision as to where Privet Capital want to take the business. Major strides had already been made before I joined, and the company is going from strength to strength. So this was an opportunity to be part of something that is growing. When you put all of that together, the opportunity ticked all the right boxes.
Q: How relevant has your previous experience been with The Royal Mint?
A: It’s amazing how much crossover there is with The Royal Mint. When I was there, I was involved in dealing with CITs and central banks, and many are the same customers. So it’s really nice to be able to connect again with so many of the same customers and contacts.
Q: Can you give details of the size of CPS?
A: We have circa 500 employees – around 80-90 of whom are in the UK. We have 20 diﬀerent sites around the world – in the four corners of the globe, including India (where we have around 60 employees), Dubai, Hong Kong, China and Mexico. Our main production site is in Dallas. We are a truly global business, operating in over 100 countries, which enables us to understand the diﬀerent cash cycles in diﬀerent countries and diﬀerent regions.
Q: It is now almost exactly two years since CPS was acquired by Privet Capital. How has CPS performed in line with the objectives/expectations at that time?
A: We are ahead of the curve. CPS was loss-making when it was acquired from De La Rue. We are now making a profit, growing and taking on staﬀ, particularly in Dallas and also in R&D, where huge investments are being made to grow the business for the long-term. The contract with the US Federal Reserve is evidence of that.
One of the reasons for this is that we are coming to the market with a diﬀerent attitude – we are independent, so are not simply about what we can make, but providing solutions according to the customers’ needs.
Another reason is that we make the market-leading software – ECM™ (Enterprise Cash Management) – which is the best thing out there. It pulls the data oﬀ our equipment and puts it into our customers’ systems. We then help customers use this data, which really helps in analysis – whether it’s very detailed and granular or a higher level view, or anywhere in between. We don’t dictate what our customers do with the data – we simply ensure access to that data and show them what can be done with it. This software helps cash centres and central banks with the physical movement of cash. It will integrate with other hardware as well – not just ours – and is definitely an area of focus. People want to understand what drives their business – not just in processing cash that comes in but more broadly, forecasting what can be expected to come in at any given time.
When implemented in the commercial sector as well as at the central bank, ECM provides the central bank with full traceability and visibility of all cash in circulation across an entire nation. So in this respect, it helps to manage cash across the entire platform.
Q: What have been the key achievements/milestones in the past two years?
A: Establishing ourselves as a separate business is one. When we came out of a larger entity, a lot of work was required in terms of putting new systems and processes into place. Much of that had already been done before I arrived – moving into our new offices was the final step. It is more than just an office – it is a sign that we are now fully independent.
Another is our recent acquisition of iCubed Technologies. They specialise in technology for banknote sorter transportation, feature detection and analytics, and we have been working in partnership many years to support and enhance our Cobra® and X Range™ sorters. More recently we have collaborated on the development of state-of-the-art banknote detection and sorter transportation systems allied with advanced processing analytics and reporting.
Q: CPS presumably still maintains a close relationship with De La Rue. What are the main diﬀerences and benefits, however, to CPS now being independent?
A: There is a big diﬀerence between when we were part of De La Rue and now. As a fully-independent company, we are focused on just one thing, ie. cash processing. We are not selling paper, print or features – we are trying to make cash cycles as efficient as possible. This separation of responsibility in the cash supply chain is becoming an increasingly important issue for central banks -and it is one that separates us from some of our competitors.
De La Rue is a partner and a very important customer. But just one of many, and all our customers are treated the same. The response of the market to having an independent source of hardware and perspective on sensors and features has been surprisingly positive.
Q: Who are the key customers for your products and solutions by market segment? And geographically, where are you strongest, and where do you hope to expand?
A: We can’t talk about individual customers unless they do so themselves – such as Norges Bank and Vaultex, case studies of which are on our website. We are spread widely around the world – we have equipment in over 100 countries, an installed base of more than 400 highspeed and 1,700 desktop sorters and a good split between central banks and the commercial sector. Where we are probably weakest is in the US, which is ironic considering that that is where our main manufacturing is located, but this is a position we are quickly changing. To reinforce our regional presence, we are changing our internal structure – which is quite centralised – to a more regional structure. Shawn Ashdown, who is based in Melbourne, is now responsible for Asia Pacific. Jim Richards is now responsible for EMEA and Darren Wick for the Americas. This new structure will enable us to get closer to our customers – on the ground, understanding customers and providing solutions.
Q: Can you give a run-down on your portfolio – and which areas/solutions do you think as most important for the future?
A: Our portfolio includes software and data solutions, hardware and consultancy, supported by our service team. Our hardware range spans desktop sorters to large single note inspection (SNI) systems. All have a role to play in the future. SNI is becoming particularly important – it’s all about the integrity of banknotes. There is a lot more public scrutiny these days and one of our roles is protecting that integrity. SNI is at the start of that, and the 7000 does just that – it checks that banknotes are ft for circulation and that the features are working. We have been very successful in the last 12 months with this particular line.
Our mid-speed systems are on a smaller scale and slower. But they still have to perform the same functions. And it isn’t just about the speed – it’s about the authentication. That is what we are about, and is why, for example, we aren’t at the bottom end of the market – ie. Small counters.
As for software, people are always trying to become more efficient. And make the right decisions, for example regarding new features. Data is very important for those decision-makers – decisions based on facts are worth their weight in gold. As the cash cycle changes, understanding how cash moves is critically important, and central
banks are talking more and more about analytics, which is where our software comes in. Although this whole area is still immature, we expect to see big changes in the next couple of years and we are investing heavily in this area to be at the forefront of this evolution
Q: There is a constant mantra that cash is too expensive – particularly in its distribution, which is the part of the cycle where CPS sits. Where do you think efficiencies can be made, and what are you doing to help achieve these?
A: I am not sure that I agree with this mantra. Some cash cycles are very efficient. It’s all about defining a ft-for-purpose solution and each customer will be diﬀerent depending on where they sit in the cash cycle. We provide the appropriate solution for them. This is where the combination of hardware and software comes in. We can always make systems faster, but so what? Efficiency is not just about speed – it’s also about driving costs down and ensuring banknote quality. One of the challenges, however, is in markets where banknote usage is lower – so driving efficiencies there is particularly important. For example, countries with 10 cash centres with small machines could consolidate into fewer centres with larger machines, which will be more efficient.
Q: Where will CPS be in five years’ time?
A: It’s no secret that we are behind the leader in the market. But I like to think that we can be No 1. Why not? Whether or not five years is the right timetable, I’m not sure. But it certainly won’t be far oﬀ.