Slide 1: 2017 Interim Results
2017 INTERIM RESULTS Half year results to 30 June 2017 25 August 2017 1
Slide 2: H1 2017 Financial Highlights
H1 2017 FINANCIAL HIGHLIGHTS ►Group revenue increased 15.0 per cent to £1.70 billion (H1 2016: £1.48 billion) and by 8.7 per cent in constant currency2 ►Group adjusted1 profit before tax increased by 65.6 per cent to £41.9 million (H1 2016: £25.3 million) and by 58.7 per cent in constant currency2 ►
Slide 3: H1 2017 Financial Highlights
H1 2017 FINANCIAL HIGHLIGHTS H1 2017 vs H1 H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 2016 Revenue (£m) 1,403.8 1,435.4 1,438.0 1,478.2 1,700.3 15.0% 1 24.4 25.6 29.1 25.3 41.9 65.6% Adjusted profit before tax (£m) 1 11.7 13.2 17.0 15.3 25.6 67.3% Adjusted diluted EPS (pence) Dividend per share (pence)
Slide 4: Operating Highlights
H1 2017: OPERATING HIGHLIGHTS ►Record adjusted1 EPS of 25.6 pence (H1 2016: 15.3 pence), an increase of 67.3 per cent; ►The Group's first half performance was marginally ahead of our expectations for the period, as revised at the time of our Q1 Trading Update on 24 April 2017; ►The UK business achie
Slide 5: Financial Review
FINANCIAL REVIEW Tony Conophy 25 August 2017 5 © Computacenter 2017 5
Slide 6: Group Adjusted Financial Results
H1 2017: GROUP ADJUSTED FINANCIAL RESULTS 2 Constant Actual currency 2 currency Performance Headlines H1 2017 H1 2016 • Revenue up 15.0 per cent, and by 8.7 per cent in constant currency2 Change Change £m £m • Adjusted1 operating profit up 65.6 per cent, 58.0 per cent in constant currency2 Revenue 1
Slide 7: Reconciliation to Statutory Results
H1 2017: RECONCILIATION TO STATUTORY RESULTS Exceptional H1 2017 Utilisation of H1 2017 H1 2016 and other Statutory CSF interest DE Deferred Adjusted 1 Adjusted 1 Change adjusting results Tax Asset results results items £m £m £m £m £m £m % Revenue 1,700.3 - - - 1,700.3 1,478.2 15.0% Cost of sales (1
Slide 8: Exceptional and Other Adjusting Items
H1 2017: EXCEPTIONAL AND OTHER ADJUSTING ITEMS Exceptional items A net gain of £5.6 million was recorded, resulting from exceptional and other adjusting items (H1 2016: net loss of £1.7 million). The remaining provisions for the last two onerous contracts in Germany were released, for an exception
Slide 9: Revenue by Segment
H1 2017: REVENUE BY SEGMENT Actual currency2 Constant currency2 Supply Chain revenue H1 2017 H1 2016 Change H1 2017 H1 2016 Change The UK Supply Chain performance continued the recovery displayed £m £m % £m/€m £m / €m % in the fourth quarter of 2016, with pleasing top-line growth tracking Supply Cha
Slide 10: Revenue & Adjusted Operating Profit by Segment
H1 2017: REVENUE & ADJUSTED OPERATING PROFIT BY SEGMENT Actual currency2 Constant currency2 UK performance saw significant improvements in H1 2017 H1 2016 Change H1 2017 H1 2016 Change Services margins driven by several large projects in £m £m % £m / €m £m / €m % the Professional Services practice.
Slide 11: Group Adjusted Operating Profit Walk
H1 2017: GROUP ADJUSTED OPERATING PROFIT WALK (£M) (CONSTANT CURRENCY) 8.0 0.6 8.5 1.9 7.3 9.3 1.2 41.4 25.0 26.2 H1 2016 Currency H1 2016 Supply Supply Services Services SG&A H1 2017 EBIT* EBIT* Chain Chain Volume GP % EBIT* (actual currency) (constant Volume GP % * EBIT refers to adjusted1 operati
Slide 12: Closing Net Funds for the Period
H1 2017: CLOSING NET FUNDS FOR THE PERIOD £m Net funds3 have increased £40.7 million to £137.3 million in the twelve months to 31 30 June 2017 73 43 140 £40 million three-year committed facility 101 extended in Feb 2015 through to Feb 82 70 2018 is available and not yet utilised 53 39 Net borrowi
Slide 13: Cashflow Since December 2016
H1 2017: CASHFLOW SINCE DECEMBER 2016 (£M) 11 Current asset investment of 48 £30 million matured during the period returning to cash Free cashflow of c£11 million 30 21 during the period 11 11 0 Depreciation / Amortisation / -1 -39 -1 SBP and Other includes a -8 1 £4.3 million reduction for ga
Slide 14: Net Revenue Strong
H1 2017: NET REVENUE STRONG (AS ADJUSTED) Adjusted1 operating profit margin - Gross v Net Adjusted1 operating profit increased from 1.7% of revenue to 2.4%. Adjusted1 operating profit margin percentage is 8.0% always diluted by Supply Chain revenues, which are 7.0% typically ‘pass-through’ 6.0%
Slide 15: Financial Returns Strong
H1 2017: FINANCIAL RETURNS STRONG Return on capital employed* 37.1% 33.5% 30.8% Return on capital employed has 28.0% 29.6% increased from the level seen in H1 2016 as adjusted1 operating profit increased from £25.0 million to £41.4 million and capital employed 13.4% grew from £277.0 million as at 30
Slide 16: Modelling Considerations
H1 2017: MODELLING CONSIDERATIONS Adjusted1 net interest Capital Expenditure As the net funds3 increases, along with the proportion allocated to various current asset Typically capex is circa £20-£25 million per annum with approximately 50 per cent run-rate investments, adjusted1 net interest will c
Slide 17: IFRS 15 Revenue with Customers
H1 2017: IFRS 15 REVENUE WITH CUSTOMERS Background International Financial Reporting Standard IFRS 15, Revenue from Contracts with Customers, becomes effective for the Group on 1 January 2018. The guidance permits two methods of adoption: retrospectively to each prior reporting period presented (ful
Slide 18: Operating Review
OPERATING REVIEW Mike Norris 25 August 2017 18 © Computacenter 2017 18
Slide 19: Leading the Growth
LEADING THE GROWTH TO LEAD WITH AND GROW OUR SERVICES BUSINESS Germany continues its recent 800 momentum. The pipeline in the UK for H2 2017 is encouraging whilst France continues to benefit from the 700 significant wins in H2 2016. 600 H1 2017 vs H1 2016 Contract Base Growth Contract base value £M
Slide 20: Driving Efficiency
DRIVING EFFICIENCY TO IMPROVE OUR SERVICES PRODUCTIVITY AND ENHANCE OUR COMPETITIVENESS GROUP UK GERMANY FRANCE Professional Services has seen volumes Difficulties on several Managed Significant Managed Services wins in Margin improvement in the UK and a increase significantly as projects that Servi
Slide 21: 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 GROUP Our customers with over £1 million of contribution are a 94 103 100 82 88 Strategic Key Performance Indicator for Group performance. 13 FY 14 FY 15 FY 16 FY 17 H1 UK GERMANY FRANCE The UK
Slide 22: UK
H1 2017: UK Share of H1 2017 Revenue Profile FINANCIAL HIGHLIGHTS Revenue up 5.1% Adjusted1 operating profit up 27.1% 27% Adjusted1 Supply Chain revenue up 5.0% Adjusted1 Services revenue up 5.4% OPERATIONAL HIGHLIGHTS 10% Supply Chain Services 63% Professional Services Supply Chain margin
Slide 23: Germany
H1 2017: GERMANY Share of H1 2017 Revenue Profile FINANCIAL HIGHLIGHTS Strong revenue growth of 13.6% Adjusted1 operating profit up by 105.7% 23% Supply Chain revenue up by 17.9% Services revenue growth of 5.8% 10% Supply Chain Services 67% Professional Services OPERATIONAL HIGHLIGHTS Manage
Slide 24: France
H1 2017: FRANCE Share of H1 2017 Revenue Profile FINANCIAL HIGHLIGHTS Revenue up 3.1% Adjusted1 operating profit up 41.7% to €1.7 million 19% Supply Chain revenue down 1.3% 4% Services revenue up 20.3% Supply Chain Services Professional Services OPERATIONAL HIGHLIGHTS 77% Managed Services
Slide 25: Belgium
H1 2017: BELGIUM Share of H1 2017 Revenue Profile FINANCIAL HIGHLIGHTS Revenue up 12.4% Adjusted1 operating profit down 50.0% to €0.4 million Supply Chain revenue up 9.8% 33% Services revenue up 17.1% Supply Chain Services Professional Services OPERATIONAL HIGHLIGHTS 4% 63% Managed Services
Slide 26: Death, Tax and Microsoft Upgrades
DEATH, TAX AND MICROSOFT UPGRADES (THE THREE THINGS THAT ARE CERTAIN IN LIFE!) 2017 • End of Extended support • No more monthly security patches • DOING NOTHING IS NOT AN OPTION 2018 2019 JAN 2020 26 © Computacenter 2017 26
Slide 27: The Win10 Evergreen Market Challenge
THE WIN10 EVERGREEN MARKET CHALLENGE The Microsoft View The Customer View The Service Provider View Evergreen ensures latest functionality Uncertainty slows Enterprise Complex service management challenge adoption of Windows 10 Easy to implement, no migration effort Difficult (continuous) migration
Slide 28: Outlook
OUTLOOK The majority of our profit growth in the first half came from improved operational performance, with some help from currency movements. We also benefitted from a comparison with what was a weaker trading performance in the first half of the prior year, whereas the comparison for the second h
Slide 29: Appendix
APPENDIX 29 © Computacenter 2017 29
Slide 30: Glossary
GLOSSARY 1. Adjusted measures The Group uses a number of non-Generally Accepted Accounting Practice (non-GAAP) financial measures in addition to those reported in accordance with IFRS. Adjusted operating profit or loss, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss for th
Slide 31: Glossary (continued)
GLOSSARY (CONTINUED) 2. Constant currency We evaluate the long-term performance and trends within our strategic key performance indicators (KPIs) on a constant currency basis. Further, the performance of the Group and its overseas segments are shown, where indicated, in constant currency. The consta
Slide 32: 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 33: Sources of Revenue: % Change by Revenue Type
SOURCES OF REVENUE: % CHANGE BY REVENUE TYPE Group UK 16.1% 16.8% 14.1% 15.0% 12.9% 10.5% 11.5% 9.5% 8.7% 7.2% 5.4% 5.1% 6.0% 5.0% 2.6% Supply Chain Professional Managed Services Total Services Total revenue Supply Chain Professional Managed Services Total Services Total revenue revenue Services rev
Slide 34: UK: Adjusted Income Statement
UK: ADJUSTED INCOME STATEMENT H1 2017 H1 2016 Change £m £m % Revenue 678.3 645.1 5.1% 1 Adjusted gross profit 101.6 91.1 11.5% 15.0% 14.1% 0.9% Administrative expenses (83.7) (77.1) 8.6% (12.3% ) (12.0% ) (0.3% ) 1 Adjusted operating profit 17.8 14.0 27.1% 2.6% 2.2% 0.4% Headcount*: Direct 5,076 4,3
Slide 35: UK: Adjusted Operating Profit Walk
UK: ADJUSTED OPERATING PROFIT WALK (£M) 6.9 2.1 7.8 1.9 2.9 17.8 14.0 H1 2016 Supply Chain Supply Chain Services Services SG&A H1 2017 EBIT* Volume GP % Volume GP % EBIT* * EBIT refers to adjusted1 operating profit 1 Refer to the glossary for definitions. 35 © Computacenter 2017 35
Slide 36: Germany: Income Statement
GERMANY: INCOME STATEMENT Actual Currency2 Constant Currency2 H1 2017 H1 2016 Change H1 2017 H1 2016 Change £m £m % €m €m % Revenue 762.9 607.8 25.5% 886.2 779.8 13.6% 1 Adjusted gross profit 96.3 75.2 28.1% 111.9 96.5 16.0% 12.6% 12.4% 0.2% 12.6% 12.4% 0.2% Administrative expenses (74.6) (65.7) 13.
Slide 37: Germany: Adjusted Operating Profit Walk
GERMANY: ADJUSTED OPERATING PROFIT WALK (£M) CONSTANT CURRENCY 2.1 0.6 2.4 3.1 21.8 7.2 1.1 9.5 10.6 H1 2016 Currency H1 2016 Supply Supply Services Services SG&A H1 2017 EBIT* EBIT* Chain Chain Volume GP % EBIT* (actual currency) (constant Volume GP % * EBIT refers to adjusted1 operating profit cur
Slide 38: France: Income Statement
FRANCE: INCOME STATEMENT Actual Currency2 Constant Currency2 H1 2017 H1 2016 Change H1 2017 H1 2016 Change £m £m % €m €m % Revenue 228.6 200.8 13.8% 265.5 257.6 3.1% Adjusted1 gross profit 20.7 19.3 7.3% 24.0 24.7 (2.8%) 9.1% 9.6% (0.5%) 9.0% 9.6% (0.6%) Administrative expenses (19.2) (18.4) 4.3% (2
Slide 39: France: Adjusted Operating Profit Walk
FRANCE: ADJUSTED OPERATING PROFIT WALK (£M) CONSTANT CURRENCY 0.2 2.3 0.1 1.5 0.9 1.0 1.1 0.8 1.1 H1 2016 Currency H1 2016 Supply Supply Services Services SG&A H1 2017 EBIT* EBIT* Chain Chain Volume GP % EBIT* (actual currency) (constant Volume GP % currency) * EBIT refers to adjusted1 operating pro
Slide 40: Net Funds
NET FUNDS Jun 17 Jun 16 Change Analysis of Net funds3 £m £m £m One of the Group’s primary Cash and cash equivalents 140.1 65.8 74.4 measures when managing the - 35.0 (35.0) business is Net funds3 Current asset investment Net funds3 have decreased Bank loans - - - £7.2 million since 31 December 2
Slide 41: Group Cash Flow
GROUP CASH FLOW H1 2017 H1 2016 £m £m Profit before tax 47.5 23.6 Net finance income (0.3) (0.1) Depreciation and amortisation 14.9 13.9 Share-based payments 1.9 1.7 (Gain)/loss on disposal of non-current assets (1.2) 0.1 Exceptional gain on disposal of an investment property (4.3) - Operating net
Slide 42: Group Balance Sheet
GROUP BALANCE SHEET H1 2017 H1 2016 Change £m £m £m Non-current assets Property, plant and equipment 62.1 63.0 (0.9) Investment property - 10.1 (10.1) Goodwill & Intangibles 80.0 75.8 4.2 Deferred income tax asset 8.4 12.0 (3.5) 150.6 161.0 (10.4) Current assets Inventories 50.1 40.5 9.6 Trade & oth
Slide 43: Thank You
THANK YOU 43 © Computacenter 2017 43