Slide 1: 2018 Full Year Results
2018 FULL YEAR RESULTS Full year results to 31 December 2018 (12 March 2019)
Slide 2: 2018 Financial Highlights
2018 FINANCIAL HIGHLIGHTS Group adjusted1 Cash and cash Group revenue Adjusted1 diluted EPS Final dividend of profit before tax equivalents £4.4bn £118.2m 75.7p £200.4m 21.6p • Group revenue increased 14.7 per cent • Cash and cash equivalents of £200.4 million to £4.4 billion (2017: £3.8 billion)and
Slide 3: 2018 Financial Highlights
2018 FINANCIAL HIGHLIGHTS 2014 2015 2016 2017 2018 2018 vs 2017 Revenue (£m) 3,107.8 3,057.6 3,245.4 3,793.4 4,352.6 14.7% Adjusted1 profit before tax (£m) 85.9 87.2 86.4 106.2 118.2 11.3% Adjusted1 diluted EPS (pence) 46.8 53.6 54.0 65.1 75.7 16.3% Dividend per share (pence) 19.0 21.4 22.2 26.1 30.
Slide 4: 2018 Operating Highlights
2018 OPERATING HIGHLIGHTS The Group's total revenues grew £559 million during the year, £540 million in constant Group currency2, to exceed £4 billion for the first time. FusionStorm joined the Group, contributing £3.0 million of adjusted1 operating profit to the Group through the last three months
Slide 5: Financial Review
FINANCIAL REVIEW Tony Conophy 12 March 2019 5 © Computacenter 2019
Slide 6: Group Adjusted Financial Results
2018 GROUP ADJUSTED1 FINANCIAL RESULTS 2018 2017 Constant Performance headlines Change £m £m currency2 • Revenue up 14.7 per cent, and by 14.2 per cent in constant currency2 4,352.6 3,793.4 14.7% 14.2% • Adjusted1 operating profit up 12.6 per cent and by the same in constant currency2 Revenue 1 Adju
Slide 7: Reconciliation to Statutory Results
2018 RECONCILIATION TO STATUTORY RESULTS Exceptional Amortisation Utilisation of 2018 Statutory and other 2018 Adjusted 1 2017 Adjusted 1 CSF interest of acquired DE deferred Change results adjusting results results intangibles tax asset items £m £m £m £m £m £m £m % Revenue 4,352.6 - - - - 4,352.6 3
Slide 8: Exceptional and Other Adjusting Items
2018 EXCEPTIONAL AND OTHER ADJUSTING ITEMS The profit before tax impact from exceptional and other adjusting items was a net loss of £10.1 million (2017: gain of £5.5 million). Tax items resulted in a gain of £3.7 million (2017: loss of £3.8 million). The net loss from exceptional and other adjustin
Slide 9: Revenue by Segment
2018 REVENUE BY SEGMENT Technology Sourcing revenue A strong performance in the first half set the platform for a pleasing full year result in the UK Technology Sourcing business. The Technology Sourcing business in Germany saw a third successive year of significant growth, which underpinned the Gro
Slide 10: Revenue & Adjusted Operating Profit by Segment
2018 REVENUE & ADJUSTED1 OPERATING New Segmental Reporting is in place for 2018 reporting. Refer slide 39 for further details, and slide 11 for an PROFIT BY SEGMENT analysis of Central Corporate costs. UK performance saw a decrease in contribution from Services as several Transformation projects dur
Slide 11: Central Corporate Costs
CENTRAL CORPORATE COSTS 2018 2017 Change Analysis of Central Corporate Costs £m £m £m Cost of the plc Board and related public company costs 3.2 3.7 (0.5) Group Exec cost base (segment unaligned) 4.3 4.3 0.0 Shared-based payments (Group Exec unaligned) 2.7 2.6 0.1 Strategic corporate initiatives 15.
Slide 12: Group Adjusted Operating Profit Walk (£m)
2018 GROUP ADJUSTED1 OPERATING PROFIT WALK (£M) (CONSTANT CURRENCY2) 11.7 37.1 2.8 9.3 0.0 50.0 118.8 105.5 105.5 2017 Currency 2017 Technology Technology Services Services SG&A 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) 12 © Computacenter 2019 1,2 Refer to
Slide 13: Closing Net Funds for the Period
2018 CLOSING NET FUNDS3 FOR THE PERIOD • Net funds3 have decreased £133.9 million to £57.3 million since 31 December 2017. This is due to the Return of Value Tender Offer £m of £100 million completed in February 2018, the increase in the Kerpen facility (‘K2’) of £20.7 million during the year, the a
Slide 14: Cash Flow Since December 2017 (£m)
2018 CASH FLOW SINCE DECEMBER 2017 (£M) • £100 million of cash was returned to shareholders via a Tender Offer completed on 14 February 2018 44 • Free cash outflow of 108 -13 115 circa £7 million during the -24 -1 year following the 7 127 acquisition of FusionStorm -107 -6 • Capital expenditure and
Slide 15: Net Revenue Strong
2018 NET REVENUE STRONG (AS ADJUSTED) • Adjusted1 operating profit decreased from 2.8 per cent of revenue to 2.7 Adjusted1 operating profit margin - Gross v Net per cent. Adjusted1 operating profit margin percentage is always diluted 9.0% by Technology Sourcing revenues, 8.0% which are typically ‘pa
Slide 16: Financial Returns Strong
2018 FINANCIAL RETURNS STRONG Return on capital employed* 37.1% 36.0% Return on capital 33.3% 30.8% 31.1% employed has decreased from the level seen in 2017 as adjusted1 operating profit increased 13.4% 14.6% from £105.5 million to 9.9% 11.0% £118.8 million but capital 9.0% employed grew from £292.9
Slide 17: Modelling Considerations
2018 MODELLING CONSIDERATIONS Tax Capital expenditure Dependent on mix of earnings as we utilise losses in European operations. Whilst France Typically capex is circa £20-£25 million per annum with approximately 50 per cent run-rate continues to show an improvement in profitability in 2018, an incre
Slide 18: Operating Review
OPERATING REVIEW Mike Norris 12 March 2019 18 © Computacenter 2019
Slide 19: Top Line Growth Drivers
TOP LINE GROWTH DRIVERS 19 © Computacenter 2019
Slide 20: Profit Growth Drivers
PROFIT GROWTH DRIVERS 20 © Computacenter 2019
Slide 21: Leading the Growth: Services Contract Base
LEADING THE GROWTH UK decline growth stems primarily from renegotiations from renewals and TO LEAD WITH AND GROW OUR SERVICES BUSINESS extensions, whilst Germany continues to add new customers. France suffered the loss of a significant contract with a major 800 utility customer but made significant
Slide 22: Driving Efficiency
DRIVING EFFICIENCY TO IMPROVE OUR SERVICES PRODUCTIVITY AND ENHANCE OUR COMPETITIVENESS Group UK Germany France Professional Services volumes have reduced Complex implementations within Managed The expiry of a large Managed Services Managed Services margins remain significantly as major projects und
Slide 23: At the Heart of Our Business
AT THE HEART OF OUR BUSINESS TO RETAIN AND MAXIMISE THE RELATIONSHIP WITH OUR CUSTOMERS OVER THE LONG TERM 107 GROUP 103 104 Our customers with over £1 million of contribution are a Strategic Key Performance Indicator for Group performance. The two acquisitions 95 added 14 new customers that each ge
Slide 24: United Kingdom
2018 UNITED KINGDOM Share of 2018 Revenue Profile FINANCIAL HIGHLIGHTS 21% • Revenue up by 9.7% • Adjusted1 operating profit up 12.0% • Technology Sourcing revenue up by 17.1% 7% 72% • Services revenue down by 5.6% OPERATIONAL HIGHLIGHTS Technology Sourcing • Technology Sourcing margins remain depre
Slide 25: Germany
2018 GERMANY Share of 2018 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue growth of 8.3% 20% • Adjusted1 operating profit up by 14.5% • Technology Sourcing revenue up by 9.9% 9% • Services revenue growth of 4.5% 71% OPERATIONAL HIGHLIGHTS • The German Technology Sourcing business continues to Techno
Slide 26: France
2018 FRANCE Share of 2018 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue down by 4.1% 16% • Adjusted1 operating profit up 27.0% to €8.0 million 4% • Technology Sourcing revenue down by 3.6% • Services revenue down by 6.0% 80% OPERATIONAL HIGHLIGHTS • With the French business having exceeded our Tech
Slide 27: International
2018 INTERNATIONAL Share of 2018 Revenue Profile FINANCIAL HIGHLIGHTS 17% • Revenue up by £275.4 million including the contribution from acquisitions of £270.9 million 5% • Adjusted1 operating profit up by £3.3 million including the contribution from acquisitions of £2.7 million 78% OPERATIONAL HIGH
Slide 28: What We Achieve in USA by Buying FusionStorm
WHAT WE ACHIEVE IN USA BY BUYING FUSIONSTORM WE CREATE A MORE BALANCED CAPABILITY FOR OUR CUSTOMERS IN USA FUSIONSTORM BRINGS THIS ($1BN REVENUE, 350 PEOPLE) SOURCE CIO USERS BUSINESS CC US FUSIONSTORM TODAY MANAGE BRINGS THIS ($40M PS) TRANSFORM 28 © Computacenter 2018
Slide 29: Why FusionStorm?
WHY FUSIONSTORM? What we were looking for: What surprised us: Large customers West Coast customers Scale Data Center integration Vendor accreditations & feedback International focus Culture Growth potential Leadership Team 29 © Computacenter 2018
Slide 30: Computacenter US
COMPUTACENTER US • Managed Services operations established since 2005 • Technology Sourcing heritage since 1995 from acquisition of Fusionstorm 700 200 300 • Mexico City Service Center established in 2015 to support US customers US EMPLOYEES DEDICATED PARTNER STAFF MEXICO EMPLOYEES $1bn+ $100m 40 TE
Slide 31: Outlook
OUTLOOK 2018 was a record year in revenue, adjusted1 Specifically, while the Technology Sourcing operating profit and adjusted1 diluted earnings per success of last year creates a difficult share for the Group. We have also laid foundations comparison in 2019, particularly in the first half, for fur
Slide 32: Appendix
APPENDIX 32 © Computacenter 2019
Slide 33: Glossary
GLOSSARY 1. Adjusted measures 2. Constant currency The Group uses a number of non-Generally Accepted Accounting Practice (non- We evaluate the long-term performance and trends within our strategic key GAAP) financial measures in addition to those reported in accordance with IFRS. performance indicat
Slide 34: Glossary (continued)
GLOSSARY (CONTINUED) 3. Net funds Net funds includes cash and cash equivalents, CSF, other short or long-term borrowings and current asset investments. Net funds are monitored internally by the Group as a key measure. Customer-specific financing (CSF) Finance costs for CSF are charged after operatin
Slide 35: Exceptional and Other Adjusting Items
2018 EXCEPTIONAL AND OTHER ADJUSTING ITEMS The profit before tax impact from exceptional and other adjusting items was a net loss of £10.1 million (2017: gain of £5.5 million). Tax items resulted in a gain of £3.7 million (2017: loss of £3.8 million). The net loss from exceptional and other adjustin
Slide 36: Exceptional and Other Adjusting Items
2018 EXCEPTIONAL AND OTHER ADJUSTING ITEMS The profit before tax impact from exceptional and other adjusting items was a net loss of £10.1 million (2017: gain of £5.5 million). Tax items resulted in a gain of £3.7 million (2017: loss of £3.8 million). The net loss from exceptional and other adjustin
Slide 37: IFRS 15 Revenue with Customers Further Detail
2018 IFRS 15 REVENUE WITH CUSTOMERS FURTHER DETAIL Background to equity of £1.4 million and a corresponding increase in deferred tax liabilities The accounting policies adopted for the period are consistent with those of the as at 1 January 2018. The net impact on retained earnings as at 1 January 2
Slide 38: IFRS 15 Revenue with Customers Further Detail
2018 IFRS 15 REVENUE WITH CUSTOMERS FURTHER DETAIL Under existing Under previous Impact of Adoption GAAP (IFRS 15) GAAP (IAS 18 / IAS IFRS 15 has been adopted using £’000 11) £’000 the modified retrospective Revenue 4,352,570 4,348,116 approach, therefore comparative Cost of sales (3,804,019) (3,799
Slide 39: Change in Segmental Reporting
CHANGE IN SEGMENTAL REPORTING During the first half of the year, Management separate column, ‘Central Corporate Costs’, within trading operations, along with the international reviewed the way it reported segmental the segmental note. Global Service Desk locations in South Africa, performance to the
Slide 40: Sources of Revenue: Percentage Change by Revenue Type
SOURCES OF REVENUE: PERCENTAGE CHANGE BY REVENUE TYPE Group UK 17.1% 9.7% (0.4%) (5.6%) 20.5% 19.9% 14.7% 14.2% (17.8%) 1.8% 1.5% 1.5% 1.1% 0.8% 0.3% Technology Professional Managed Services Total Services Total revenue Technology Professional Managed Services Total Services Total revenue Sourcing r
Slide 41: UK Adjusted Income Statement
UK ADJUSTED1 INCOME STATEMENT 2018 2017 Change £m £m % Revenue 1,605.8 1,463.4 9.7% Adjusted1 gross profit 203.5 196.2 3.7% 12.7% 13.4% (0.7% ) Administrative expenses (145.8) (144.7) 0.8% (9.1% ) (9.9% ) 0.8% 1 Adjusted operating profit 57.7 51.5 12.0% 3.6% 3.5% 0.1% 1 Refer to the glossary for def
Slide 42: UK Adjusted Operating Profit Walk (£m)
UK ADJUSTED1 OPERATING PROFIT WALK (£M) 6.1 0.3 1.8 1.1 14.9 57.7 51.5 2017 Technology Technology Services Services SG&A 2018 EBIT* Sourcing Sourcing Volume GP % EBIT* Volume GP % * EBIT refers to adjusted1 operating profit 42 © Computacenter 2019
Slide 43: Germany Adjusted Income Statement
GERMANY ADJUSTED1 INCOME STATEMENT 2018 2017 2018 2017 Constant Change £m £m €m €m currency2 Revenue 1,872.7 1,714.7 9.2% 2,115.7 1,954.2 8.3% Adjusted1 gross profit 231.2 214.8 7.6% 261.4 244.6 6.9% 12.3% 12.5% (0.2%) 12.4% 12.5% (0.1%) Administrative expenses (164.4) (156.5) 5.0% (185.8) (178.6) 4
Slide 44: Germany Adjusted Operating Profit Walk (£m)
GERMANY ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 11.3 4.4 6.5 9.9 0.2 11.8 66.8 58.3 58.5 2017 Currency 2017 Technology Technology Services Services SG&A 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % * EBIT refers to adjusted1 operating profit currency2) 1
Slide 45: France Adjusted Income Statement
FRANCE ADJUSTED1 INCOME STATEMENT 2018 2017 2018 2017 Constant Change £m £m €m €m currency2 Revenue 493.3 509.9 (3.3%) 557.4 581.3 (4.1%) Adjusted1 gross profit 55.7 53.5 4.1% 62.9 60.9 3.3% 11.3% 10.5% 0.8% 11.3% 10.5% 0.8% Administrative expenses (48.6) (47.9) 1.5% (54.9) (54.6) 0.5% (9.9%) (9.4%)
Slide 46: France Adjusted Operating Profit Walk (£m)
FRANCE ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 0.8 0.1 0.1 0.1 1.5 4.1 7.1 5.6 5.5 2017 Currency 2017 Technology Technology Services Services SG&A 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) * EBIT refers to adjusted1 operating profit 46 © Co
Slide 47: Net Funds
NET FUNDS • One of the Group’s primary measures when managing the business is Net funds3 • Net funds3 have decreased Dec 18 Dec 17 Change £133.9 million since 31 Analysis of Net funds3 December 2017 £m £m £m • Operating cashflow for 2018 Cash and cash equivalents 200.4 206.6 (6.2) was an inflow of £
Slide 48: Group Cash Flow
GROUP CASH FLOW 2018 £m 2017 £m Profit before tax 108.1 111.7 Net finance cost/(income) 1.2 (0.6) Depreciation and amortisation • Operating net cash inflow of £115.2 million Share-based payments 34.8 6.4 28.7 6.2 (2017: £106.1 million) Exceptional gain on disposal of an investment property - (4.3) L
Slide 49: Group Balance Sheet
2018 2017 Change GROUP BALANCE SHEET Non-current assets £m £m £m Property, plant and equipment 106.3 77.9 28.4 Prepayments 3.5 - 3.5 Goodwill & Intangibles 184.6 80.3 104.3 Investments in associates 0.1 0.1 - Deferred income tax asset 9.6 9.1 0.5 304.0 167.4 136.7 Current assets Inventories 99.5 69.
Slide 50: 2018 Full Year Results
2018 FULL YEAR RESULTS Full year results to 31 December 2018 (12 March 2019)