WHAT price a £10 note? It’s not such a stupid question.
“Probably a bit less than 10p, I’d have to check that for you,” grins Leo Quinn.
He should know. His company, De La Rue, prints all the UK’s banknotes and those of many other countries, too.
A licence to print money? Of course, yet for De La Rue, the world’s largest commercial security printer and papermaker, it’s been rather less than that in recent years.
So out with the old chief executive and in with the new. Quinn arrived 14 months ago to sort out the company after three profit warnings. A spate of acquisitions, designed to find new growth areas outside its mature core business, had torpedoed its financial performance.
London-born Quinn, who cut his management teeth at the American multinational Honeywell, has since set about reinvigorating the famous old money-printer, which has a reputation far broader than its £700m market capitalisation.
Two weeks ago Quinn surprised the City with his first set of results: profits up 13% to £66m, and a promise to return £70m to shareholders. No wonder he is grinning.
“This company is an absolute jewel,” he says, striding round his office in Basingstoke, Hampshire. “When I came here and looked at the balance and the ratios, it seemed to me almost like an Aladdin’s cave for cash. I just thought, what a fantastic first CEO’s job.”
Lean and lanky, with the permanently upbeat demeanour of a motivational speaker, Quinn, 48, is good at accentuating the positive. Others might have given the 184-year-old firm a wide berth — it was caught in a spiral of diversifying, failing, and retrenching — but Quinn sees only opportunity.
“It’s like the tale of two cities here. They spent four years growing through acquisition, so you had the strong core business, which is very well structured and will continue to perform, then the opaque business where it’s hard to get to the real essence of how we delivered value to the customer.”
That core business — printing more than 150 national currencies for customers such as the Bank of England as well as providing cash-handling technology and producing fiscal stamps, authentication labels and passports — is a solid earner. The newer diversifications are less so.
Hence in his first year Quinn has already sold one of his predecessor’s key acquisitions, Sequoia, a loss-making US voting-systems firm, and embarked on a cost-cutting drive. New targets have been drawn up, a raft of senior managers let go, and a staff-involvement scheme introduced.
Lucky breaks such as the contract to produce two billion banknotes for the new Iraq helped, but Quinn, the son of an Irish builder, has a reputation as a charismatic reorganiser. Squeezing more from less appears to be the new company mantra.
That still doesn’t answer the fundamental question of where De La Rue will find real growth outside its security-printing business, but at least shareholders have been pacified.
What next? Quinn, gazing out of the window at De La Rue’s leafy trading-estate base, returns a question with a question. “What is the measure of value of a company? Isn’t it long-term cash-generation stability? As a company we would be a stock for a certain type of investor — you have to look at it that way.”
Until the next clever Charlie comes along and promises faster returns? He laughs. “From our shareholders’ point of view the money that has been spent on acquisitions has not generated a return for them, so they would like more stability rather than another acquisition strategy.”
In truth, Quinn’s vision is not so much about how the company is going to grow but where — India, China, Russia and the Americas.
“I’ve just come back from India and China, and three months before I was in Russia. That’s where it’s happening.” In China, he says, the state printing works has 30,000 employees, and a willingness to seek partners for “technology transfer”.
Others point to the changes Quinn has initiated inside De La Rue. “If we improve the performance of the organisation then we will grow,” says Sanjay Razdan, managing director of De La Rue Sorters, who followed Quinn in from Invensys and Honeywell.
Razdan describes the old regime at De La Rue as “laid back” in comparison with modern multinationals, with insufficient emphasis on sales and customers. That is all changing.
“Leo is very customer- focused, and very good at following things up,” says Razdan. “He’s astute with numbers, too. He spots where people can improve the business.”
Quinn has imposed schemes for sales improvement and coaxing input from his frontline staff — ideas he picked up during his 16-year stint at Honeywell, where he rose to become president of its Enterprise Solutions division.
He imposed similar processes at Invensys, where former colleagues remember him as a likeable, cash-obsessed workaholic, whose e-mails were often time-marked 4am. He also flew economy everywhere, developing terrible back pain in his drive to save cash.
But managing cash was a discipline Quinn learnt young. His father ran his own building company in west London and Quinn, one of three brothers, often helped count out the cash for wages on a Thursday night.
That urge to order things, combined with a restless spirit, remain the distinctive Quinn trademarks. Educated at London Oratory school, he flopped a first degree in electronic engineering at Surrey University, then switched to civil engineering at Portsmouth, and later management science at Imperial College London, working for Balfour Beatty in between.
He wanted to run his own business, but was eventually lured into Texas Instruments’ semiconductor division. “I started scheduling the order book. Managing inventory became an important part of my career.”
That led to an offer from Honeywell, the global technology multinational with a 100,000-plus workforce. Quinn went on to reorganise and sell its UK security business — “it was the highest exit multiple for a security business at that time” — and later was whisked off to America to head one of its regional divisions for home and building-controls products.
Colleagues at Honeywell describe him as an effective sales driver, but also uncommonly good with staff.
“Leo softly works people, he’s not a toe-cutter type,” says Bruce Loxton, who ran another of Honeywell’s US divisions. “He’s also tight on costs, and risk-averse on acquisitions.”
So risk-averse that Quinn eventually fell out with his divisional chief executive who wanted faster growth and more acquisitions. “People have agendas and that’s the challenge,” nods Quinn.
Is he too cautious? Friends cite his current aversion to buying a house near his workplace. At the moment he rents in Camberley, Surrey, although he keeps a family home in London. He admits he doesn’t want to get the timing wrong.
But homes and companies are hardly similar. “The one thing I have continually found,” says Quinn, “is that shareholder value has been destroyed by the acquisition path. People pay too much and then they don’t integrate them effectively.”
At Invensys, where he worked as chief operating officer of its production management division, he also cavilled at the amounts spent on consultants.
Few were surprised when he leapt into De La Rue — he loves big brands — only that it had taken him so long to get into a top job.
“Leo’s never forced his career and probably wouldn’t have been a CEO unless someone had asked him,” says one former Invensys colleague. “He just loves problem-solving. What motivates him is making things go right.”
Hence his addiction to management books. “I’ve got a lovely little book here about personal ownership and accountability,” says Quinn, rifling through his desk.
Later he is up at his whiteboard, explaining how to build profitability with market-share growth. He’s a natural communicator.
Those Irish genes? “Hardly. I can’t even do an Irish accent, let alone tell a joke,” he shrugs. Work is everything to him. “I live to work, I think it’s fantastic that people pay me to do my hobby.” Even on the occasional skiing trip, say friends, he’s never without his phone.
Anyway, solving problems is one thing, creating strategy another. Once he has De La Rue shipshape, he will have to set a new course. Keep its stake in Camelot, the lottery runner? Dig out new areas of security printing? ID cards? His predecessor pulled De La Rue out of the UK government trial. “Unfortunately,” says Quinn. But anti-counterfeit technology, now, that’s interesting.
“It’s a revelation to me,” he says, his long face lighting up again, “but we’re more like a material-science company because we use materials in different ways to add value. Clients want the safest and most secure banknotes at the right price. We could put a chip in them, but that would be too expensive . . .”
Which brings me back to my first question.
VITAL STATISTICS
Born: September 13, 1956
Marital status: married, two children
School: London Oratory
Universities: Surrey, Portsmouth and London
First job: civil engineer, Balfour Beatty
Salary package: £800,000 (£400,000 plus 100% bonus)
Homes: BayswaterandCamberley
Car: black BMW 7-Series
Top book: Barbarians at the Gate
Favourite music: Damien Rice
Best film: The Usual Suspects
Top gadget: D-Snap camera
Last holiday: Keystone, Colorado
Interests: skiing, scuba diving
LEO QUINN’S WORKING DAY
THE De La Rue chief executive wakes at his home in Camberley, Surrey, at 6am. “The first thing I do is swim half a mile at a local hotel,” says Leo Quinn, “Great thinking time.” He takes a yogurt and orange juice for breakfast and drives himself into his Basingstoke office before 8am.
“My average week will include at least one site visit, and an update on how a business is doing. We do monthly financial reviews, and I travel overseas a lot. I am off to Brazil and Colombia tomorrow.”
He doesn’t eat lunch, and finishes work at 7.30pm or later. “I’ve always had an incredible amount of energy, and I like to get a lot of things done. I also think it’s important you’re seen to walk around inquiring how others are getting things done.”
WORKING SPACE
LEO QUINN works from a long, glass-walled office on the first floor of De La Rue’s white-stuccoed office block outside Basingstoke, Hampshire. The block, built in the last decade, is designed to look old.
Quinn’s blue-carpeted room overlooks the company car park and a clump of mature tulip trees. “I prefer more open-plan offices. This is a bit of the past,” he says. “We are moving across the way to a more open-plan area soon, where it’s easier for people to congregate.”
His current room, inherited from his predecessor, is furnished with a modern desk, bookcase and meeting table, and decorated with pictures of framed banknotes. Lines of management books fill the bookcase. “I haven’t changed anything apart from putting the whiteboard up,” says Quinn. “I like to express things on the board.”
