Slide 1: 2024 Half Year Results
2024 Half Year Results 9 September 2024
Slide 2: Disclaimer
Disclaimer This presentation includes statements that are, or may be deemed to be, ‘forward-looking statements’. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms ‘anticipates’, ‘believes’, ‘estimates’, ‘expects’, ‘intends’, ‘may’, ‘pla
Slide 3: H1 2024 Highlights
H1 2024 Highlights Solid underlying • H1 results impacted by expected normalisation of Technology Sourcing volumes performance vs • Solid underlying performances in Germany and North America tough comparative • Good progress in growing the number customers generating over £1m of gross profit p.a. St
Slide 4: Financial Review
Financial Review Chris Jehle, CFO 4
Slide 5: H1 2024 Financial highlights
H1 2024 Financial highlights Gross invoiced Revenue Gross Gross income profit margin £4.5bn £3.1bn £472m 15.2% -10.3% CCY -11.6% CCY -4.8% CCY +111bps -12.1% -13.4% -6.6% Adjusted Adjusted Dividend Adjusted profit before tax diluted EPS net funds £87m 55.0p 23.3p £402m -26.8% CCY -28.4% -25.2% +3.1%
Slide 6: H1 2024 results reflect a tough comparative
H1 2024 results reflect a tough comparative H1 2024 H1 2023 Change Change (CCY) £m £m • GII down 10.3% in constant currency Gross invoiced income (GII) 4,536.6 5,158.2 -12.1% -10.3% mainly reflecting exceptional Technology Revenue 3,103.8 3,584.9 -13.4% -11.6% Sourcing growth in H1 2023 Gross profit
Slide 7: GII and gross profit well above 2022 levels
GII and gross profit well above 2022 levels GII H1 since 2020 (£m) Gross profit H1 since 2020 (£m) CAGR CAGR +17% +10% 5,158 506 4,537 472 3,972 425 425 3,288 318 2,462 H1 20 H1 21 H1 22 H1 23 H1 24 H1 20 H1 21 H1 22 H1 23 H1 24 7
Slide 8: Technology Sourcing volumes normalised as expected
Technology Sourcing volumes normalised as expected Splits by Service Line and by geography Revenue by Service Line Revenue by Geography Adjusted operating profit1 by Geography £3,104m £3,104m £106.9m1 -11.6% in -11.6% in -20.8% in CCY CCY CCY Share of Change Change Share of Change Change Share of Ch
Slide 9: Solid underlying performances in Germany and North America
Solid underlying performances in Germany and North America Germany North America United Kingdom H1 24 Adj. operating profit H1 24 Adj. operating profit H1 24 Adj. operating profit £59.5m (H1 23: £73.3m) £26.1m (H1 23: £29.3m) £13.4m (H1 23: £25.5m) • Solid underlying performance • Hyperscaler volume
Slide 10: Operating profit bridge
Operating profit bridge £m in constant currency • Expected normalisation of (2.7) (51.2) Technology Sourcing volume accompanied by robust margin 33.5 (0.9) (5.4) performance, reflecting strong (10.7) execution and product mix 118.5 115.8 • Modest decline in Services 81.1 volume with margin performan
Slide 11: Return to more normal cash profile at H1
Return to more normal cash profile at H1 Group inventory Summary cash flows (£m) • £271m at 30 June 2024 21.7 (89.7) 78.4 • Up 26% since year end driven by recent US contract wins 8.0 (32.5) • Down 14% y-o-y (14.7) (14.7) 459.0 (7.5) (6.1) Adjusted net funds 401.9 • Adjusted net funds at 30 June 202
Slide 12: Strategic initiatives to underpin growth and future productivity gains
Strategic initiatives to underpin growth and future productivity gains Sales & Customer Business Services Network & Security Service Line platforms Enablement systems system upgrades Infrastructure New Sales CRM and Rollout of new service Continued investment in Significant investment in Quotation s
Slide 13: Disciplined approach to capital allocation
Disciplined approach to capital allocation Capital returns to shareholders (£m) Total Return since 2013 300 £976m1,2 • £200m share buyback programme announced in late July, consistent 250 with our capital allocation policy 200 • Expect to retain a strong balance sheet following completion 150 100 •
Slide 14: 2024 technical guidance
2024 technical guidance Strategic Exchange rates at Capex Adjusted effective Dividend cover Capital return initiatives opex constant 14 currency tax rate c.£8m £200m £28-30m 28.5-30.5% 2-2.5x share adverse £35-40m adjusted buyback impact on diluted EPS programme1 full year PBT 14 1. Programme announ
Slide 15: Operating review
Operating review Mike Norris, CEO 15
Slide 16: Our strategic focus
Our strategic focus Target Scale and Empower market leverage our our people customers activities 16
Slide 17: Good growth in 'podium' customers
Good growth in ‘podium’ customers Customers generating >£1m of gross profit 188 183 190 • Podium customers increased by 7 during H1 to 156 165 190 since the year end 134 44 47 55 38 37 • Growth mainly driven by North America with 15 19 13 13 19 17 Germany and the UK stable 15 64 55 64 48 51 63 • >54
Slide 18: Significant potential for further growth
Significant potential for further growth We have significant customer growth opportunities across all of our geographies ‘Podium’ customers at H1 2024 – those generating >£1m of gross profit 23 55 48 64 455 965 325 380 Customers and prospects with the potential to become podium customers 18
Slide 19: North America - same market drivers, different scale
North America - same market drivers, different scale Agility and Resilience People Value and Artificial Sustainability speed and security experience efficiency Intelligence Hyperscale Enterprise • Headquartered in Silicon Valley • Headquartered throughout the US • Building compute capacity at scale
Slide 20: We are establishing a track record of delivery for hyperscale customers
We are establishing a track record of delivery for hyperscale customers Our competitive advantage 2018 Entry into Hyperscale Long-standing Market-leading market via FusionStorm credibility in the market international capability acquisition 2020 Livermore Integration Center 2021 Expansion Alpharetta
Slide 21: North America is becoming a material profit contributor
North America is becoming a material profit contributor Accounting for nearly a quarter of Group adjusted operating profit in H1 2024 • Executed well on the North America Operating profit ($m) growth opportunity during H1 81.0 • 8 new podium customers added 65.3 including 2 new large hyperscale cust
Slide 22: Germany strongly positioned with public and corporate sector
Germany strongly positioned with public and corporate sector Germany adjusted operating profit (£m) • Continuing to benefit from the breadth and depth of expertise across all three Service Lines CAGR 20% 163.0 • Broadened our portfolio with existing customers and expanded customer base during H1 137
Slide 23: UK market soft; podium customers stable
UK market soft; podium customers stable • Soft trading performance reflects further weakness in hardware market and consequently, a more competitive environment • Good growth in Professional Services • Number of podium customers maintained • Awarded £1bn six-year contract with existing customer acro
Slide 24: Services – good progress in scaling Professional Services
Services – good progress in scaling Professional Services Professional Services Managed Services H1 2024 revenue +7.1% in CCY H1 2024 revenue -6.3% in CCY • Good progress in replicating and scaling • Decline reflects timing of certain contract our proven German success to grow losses while onboardin
Slide 25: Expecting to deliver a stronger performance in H2
Expecting to deliver a stronger performance in H2 Clear H2 growth drivers… …and a less demanding H2 comparative (% y-o-y) • £1.8bn committed product order backlog at 30 June 2024 H1 23 H2 23 FY 23 H1 24 • +19% y-o-y 27% • +48% vs 31 December 2023 19% • High near-term visibility in North America 10%
Slide 26: Summary and outlook
Summary and outlook H1 impacted by expected normalisation Good progress in growing podium of Technology Sourcing volumes; solid customers and executing well on underlying performance in Germany North America growth opportunity and North America Disciplined approach to capital Encouraging start to Q3
Slide 27: Q&A
Q&A 27