Slide 1: Results for the year ended 31 July 2023
Results for the year ended 31 July 2023 Graham Charlton, CEO Katy Mecklenburgh, CFO 24 October 2023
Slide 2: Largest provider of cyber security, cloud and IT infrastructure solutions in the UK
We are the largest provider of cyber security, cloud and IT infrastructure solutions in the UK¹, supporting local customers with their global needs Our purpose is to help customers use UK technology to succeed, by putting our Dublin Netherlands employees first Washington Hong Kong Singapore 2,315 £2
Slide 3: 2023 summary results
2023 summary results Continued broad based growth • Gross profit growth of 14.2% to £373.8m • Operating profit up 3.5% to £140.9m • Gross invoiced income* up 2.2% to £2.56bn • Revenue down (8.6)% to £985.3m • Gross profit per customer growth of 12.2% to £37.0k • Customer base increased 1.9% to 10.1k
Slide 4: Business update
Business update Strong growth, in both halves of the year, and progress against our strategy • GII on enterprise (+20%), SMB (-6%), public sector (+4%); software (+13%), hardware (-24%) and services (+21%). SMB and hardware impacted by a combination of market conditions and one-off deals in the prio
Slide 5: A diverse offering
A diverse offering We sell a comprehensive range of products and solutions across all customer segments, creating exciting growth opportunities with both new and existing customers Customer segment Product Technology Public cloud Public and datacentre Enterprise Services Workplace Sector Software 20
Slide 6: Strategy update and progress
Strategy update and progress Acquire Sell more to more customers existing customers • Customer base up 200 (+1.9%) • Gross profit per customer up 12.2% • We estimate that we trade with around • Estimated average share 20% of our addressable market of wallet is 20% to 25% • Continuing to target new c
Slide 7: Awards from our vendors and channel partners during FY2023
Awards from our vendors and channel partners during FY2023 EMEA Partner of the Year 2022 CrowdStrike Harmony Partner of the Year and New Logo CheckPoint Partner of the Year Global SMB and Commercial Partner of the Year Cloud Partner of the Year Veritas SMB and Commercial EMEA Partner of the Cisco’s
Slide 8: Financial Review
2023 FINANCIAL REVIEW Katy Mecklenburgh, CFO Results for the year ended 31 July 2023 8
Slide 9: Summary income statement
Summary income statement £m FY23 FY22 Change • Revenue decline is driven by hardware which decreased 1 Revenue 985.3 1,077.9 1 (8.6% ) (23)%, only partially offset by growth in software and services (26% and 43% respectively) Gross invoiced • The same trends impacted GII, where growth in software 2
Slide 10: Account manager productivity gains from selling deeper into customers
Account manager productivity gains from selling deeper into customers 450 400 FY23 350 FY22 GP (£m) 300 FY21 250 FY20 FY19 200 FY18 150 FY17 FY16 FY15 FY14 100 FY13 FY12 50 500 1,000 1,500 2,000 2,500 Cumulative years of experience of account managers Results for the year ended 31 July 2023 10
Slide 11: Customer base and GP per customer
Customer base and GP per customer 11,000 £45k £40k 10,000 £35k 9,000 £30k 8,000 £25k £20k 7,000 £15k 6,000 £10k 5,000 £5k 4,000 - FY15 FY16 FY17 FY18 FY19 FY21 FY22 FY23 FY20 Customer base GP per customer Customer base: is defined as the number of entities which traded with Softcat in each of the tw
Slide 12: Cash flow
Cash flow £m FY23 FY22 • 1 Small NWC outflow in period, reflecting normalisation Operating profit 140.9 136.1 of cash collections post the impact from finance Depreciation and amortisation 6.1 4.5 system implementation at the end of FY22 offset by shortening of average payment days Net movement in w
Slide 13: Dividend
Dividend FY23 FY22 • The Company is debt free. Our capital allocation framework is to prioritise investment into future organic growth, followed by Interim 8.0p 7.3p maintaining a progressive ordinary dividend policy. Any additional excess capital will then be either allocated to Final 17.0p 16.6p s
Slide 14: Outlook
Outlook • The Company is well positioned to continue to deliver double-digit gross profit growth through the year, driving further market share gains. • We expect full year FY2024 operating profit to be in line with market expectations*. • We expect the operating profit growth to be second half weig
Slide 15: Inclusion & Sustainability
INCLUSION & SUSTAINABILITY Graham Charlton, CEO Katy Mecklenburgh, CFO
Slide 16: Environmental sustainability
Environmental sustainability Governance Targets & Actions Awards Commitments Sustainability Committee Solar panel installation 2022 & 2023 – 5* HP Amplify Carbon neutral scope 1&2 (Clean Energy Generation) Impact Status Sustainability Leadership Team by 2022 100% EV pool car migration. 2022 & 23 – L
Slide 17: Our approach to inclusion and sustainability
Our approach to inclusion and sustainability Inclusion Environment Five awards in 2023 Communities Ethical Behaviour Employee charity days Results for the year ended 31 July 2023 17
Slide 18: Closing remarks
CLOSING REMARKS Graham Charlton, CEO Results for the year ended 31 July 2023 18
Slide 19: Summary
Summary Adding to a track record of consistent growth • Profitable, organic growth in line with expectations despite challenging market conditions • Progress across all sectors, technology segments and end markets • Won new customers and increased GP per customer with existing customers A simple mod
Slide 20: The AI Opportunity
The AI Opportunity In our own operations: Opportunity Tender and bid Proposition navigation identification and generation and resource response management Education Readiness Implementation In our customer proposition: Webinars Data governance Client devices Workshops Security Datacentre transformat
Slide 21: Results for the year ended 31 July 2023
Results for the year ended 31 July 2023
Slide 22: Largest provider of cyber security, cloud and IT infrastructure solutions in the UK
We are the largest provider of cyber security, cloud and IT infrastructure solutions in the UK¹, supporting local customers with their global needs Our purpose is to help customers use UK technology to succeed, by putting our Dublin Netherlands employees first Washington Hong Kong Singapore 2,315 £2
Slide 23: Who we are
Who we are Who we are We are a leading reseller of IT infrastructure solutions, supporting UK and Irish customers with their global needs What we do Softcat makes designing, sourcing, implementing and supporting organisations’ IT infrastructure simpler and more effective Our mission To be the world’
Slide 24: Our sources of competitive advantage
Our sources of competitive advantage Our special culture Our competitive advantage Market-leading Market-leading customer offering engagement Passion Fun Highly Customer trust engaged and loyalty Responsibility Intelligence employees over years Community Investment in Market-leading tech and service
Slide 25: Our proven growth strategy
Our proven growth strategy SELL MORE TO ACQUIRE MORE CUSTOMERS EXISTING CUSTOMERS MAINTAIN RELEVANCE AND PEOPLE AND CULTURE EASE OF DOING BUSINESS EXPAND OUR ADDRESSABLE MARKET ~50k 10,100 Softcat UK market share: <5% (1) Potential UK&I customers (corporate and public sector)(2) Softcat customers So
Slide 26: Softcat: at the core of the IT value chain
Softcat: at the core of the IT value chain Workplace technology Networking and security Cloud and data centre Hardware manufacturers and services Software publishers and services Direct Distributors Enterprise Small and medium business Public sector Note: Enterprise includes companies with over 2,00
Slide 27: Our track record: strong and consistent organic growth
Our track record: strong and consistent organic growth 18 years of uninterrupted growth Scaled and stable platform Operating profit (1) Gross profit 373 136 141 £m - FYE 31 July 327 £m +18% +18% 119 CAGR 276 CAGR 13-23 236 13-23 94 211 84 175 68 136 50 121 46 103 41 89 36 71 27 43 56 22 22 29 16 15
Slide 28: Outstanding sale track record
Outstanding sale track record… We grow our customer base and drive growth in gross profit per customer £40k 10,000 £35k £30k 8,000 £25k 6,000 £20k 4,000 £15k £10k 2,000 £5k - - FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 Customer base GP per customer Customer
Slide 29: …with significant growth opportunity
…with significant growth opportunity Large and growing market • The most recent CRN Top 100 VARs report comprises businesses reporting a total of £19.3bn in income, with thousands of Softcat Addressable Market (£M) smaller resellers in the UK outside the top 100 £77.5bn • Gartner estimate that the U
Slide 30: Sales experience drives successful productivity
Sales experience drives successful productivity Account manager progression… …delivers strong gross profit growth Elevated level of account manager productivity £1,120k GP (£m) from investment in breadth of offering since IPO 450 400 FY23 350 FY22 300 FY21 GP (£m) £618k FY20 250 FY19 200 FY18 £316k
Slide 31: Diverse offering with broad and deep capability
Diverse offering with broad and deep capability Selling to a variety of customers… FY23 gross invoiced income: £2,563m Enterprise (>2k employees) 16% Workplace Cloud and Services 20% data centre 31% 39% 37% 24% Public sector 60% Hardware 43% Software 30% SMB(<2k Networking and security employees) Us
Slide 32: Softcat: the vendors' trusted partner
Softcat: the vendors’ trusted partner % of FY23 gross Selected FY20 to FY23 Vendor invoiced income accreditations CAGR • Strong relationships with leading Microsoft 23% Azure Expert MSP 14% global vendors Cisco Systems 7% Platinum Partner 17% • Scale and breath of vendor relationships ensures impart
Slide 33: Robust margins and strong operating efficiency
Robust margins and strong operating efficiency Best-in-class operating efficiency… …and a lean cost base Operating expenses evolution as % of gross profit 43% 42% 40% 39% 40% 39% 39% 40% 40% 38% 38% 38% 37% 9% 35% 11% 9% 9% 10% 10% 34% 8% 9% 22% 21% 22% 21% 20% 21% 20% 20% 30% 33% 31% 30% 30% 31% 29
Slide 34: Appendix
APPENDIX Results for the year ended 31 July 2023 14
Slide 35: Softcat: the UK champion
Softcat: the UK champion UK Gross Invoiced Income per CRN Top 100 VARs for selected peers £2.5bn £2.0bn £1.5bn £1.0bn £0.5bn - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022/23 Source: ChannelWeb CRN Top VARs 2011 to 2023 and selected company published financial statements. Investo
Slide 36: Summary income statement
Summary income statement £m FY23 FY22 Change Revenue 985.3 1,077.9 (8.6% ) Gross invoiced 2,563.3 2,507.5 2.2% income Gross profit 373.8 327.2 14.2% GP/GII % 14.6% 13.1% 154bps Admin. expenses (232.9) (191.1) 21.9% Operating profit 140.9 136.1 3.5% OP/GP % 37.7% 41.6% (392bps) Interest 1.0 (0.0) Tax