Slide 1: 2020 Interim Results
2020 INTERIM RESULTS Half year results to 30 June 2020 (09 September 2020)
Slide 2: H1 2020 Financial Highlights
H1 2020 FINANCIAL HIGHLIGHTS Group Group adjusted1 Adjusted1 Cash and cash Interim revenue profit before tax diluted EPS equivalents dividend of £2.5bn £74.6m 46.7p £222.1m 12.3p • Group revenue increased 1.5 per cent • Interim dividend of 12.3 pence (H1 2019: 10.1 pence), to £2.5 billion (H1 2019:
Slide 3: H1 2020 Financial Highlights
H1 2020 FINANCIAL HIGHLIGHTS H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2020 vs H1 2019 Revenue (£m) 1,478.2 1,700.3 2,008.9 2,427.0 2,462.2 1.5% Adjusted1 profit before tax (£m) 25.3 41.9 52.1 53.5 74.6 39.4% Adjusted1 diluted EPS (pence) 15.3 25.6 32.7 34.5 46.7 35.4% Dividend per share (pence) 7.
Slide 4: H1 2020 Operating Highlights
H1 2020 OPERATING HIGHLIGHTS The Group’s total revenues grew 1.5 per cent during the first half of the year, and by 0.6 per cent in constant currency2. Significant reductions in expenditure from industrial customers have been offset by new business within the government and Group financial services
Slide 5: Financial Review
FINANCIAL REVIEW Tony Conophy 9 September 2020 5 l © Computacenter 2020
Slide 6: H1 2020 Group Adjusted Financial Results
H1 2020 GROUP ADJUSTED1 FINANCIAL RESULTS Performance headlines H1 2020 H1 2019 Constant Change 2 • Revenue up 1.5 per cent and by 0.6 per cent in constant currency2 £m £m currency • Adjusted1 operating profit up 37.8 per cent and by 36.3 per cent in constant Revenue 2,462.2 2,427.0 1.5% 0.6% curren
Slide 7: H1 2020 Reconciliation to Adjusted Results
H1 2020 RECONCILIATION TO ADJUSTED1 RESULTS Exceptional Amortisation Utilisation of H1 2020 H1 2019 H1 2020 and other of acquired DE deferred Adjusted1 Adjusted1 Change results adjusting intangibles tax asset results results items £m £m £m £m £m £m % Revenue 2,462.2 - - - 2,462.2 2,427.0 1.5% Cost o
Slide 8: H1 2020 Exceptional and Other Adjusting Items
H1 2020 EXCEPTIONAL AND OTHER ADJUSTING ITEMS The net loss from exceptional and other adjusting items in the period was £1.6 million (H1 2019: loss of £1.5 million). Excluding other adjusting tax items, which resulted in a gain of £0.6 million (H1 2019: gain of £1.2 million), the profit before tax i
Slide 9: H1 2020 Revenue by Segment
H1 2020 REVENUE BY SEGMENT Technology Sourcing revenue The UK Technology Sourcing business has seen exceptional growth, particularly in the second quarter of the year, driven by workplace H1 2020 H1 2019 H1 2020 H1 2019 Constant contracts to support our customers’ emergency Change 2 transition to ho
Slide 10: H1 2020 Revenue and Adjusted Operating Profit by Segment
H1 2020 REVENUE AND ADJUSTED1 New Segmental Reporting is in place for 2020 reporting. Refer to slide 43 for further details, and slide 11 for an analysis of OPERATING PROFIT BY SEGMENT Central Corporate Costs. UK performance saw very strong Technology Sourcing revenue growth, particularly in the fin
Slide 11: Central Corporate Costs
CENTRAL CORPORATE COSTS H1 2020 H1 2019 Change Analysis of Central Corporate Costs £m £m £m Cost of the plc Board, related public company costs and Group Exec cost base (Segment unaligned) 3.3 3.4 (0.1) Shared-based payments (Group Exec Segment unaligned) 1.3 1.1 0.2 Strategic corporate initiatives
Slide 12: H1 2020 Group Adjusted Operating Profit Walk
H1 2020 GROUP ADJUSTED1 OPERATING PROFIT WALK (£M) (CONSTANT CURRENCY2) (1.1) 2.2 5.4 12.2 0.6 1.9 77.3 56.1 56.7 H1 2019 Currency H1 2019 Technology Technology Services Services SG&A H1 2020 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) 1,2 Refer to the glossary f
Slide 13: H1 2020 Closing Adjusted Net Funds/(Debt)
H1 2020 CLOSING ADJUSTED NET FUNDS/ (DEBT)3 • Cash and cash equivalents have increased by £107.7 million since £m 30 June 2019 and by £4.2 million since 31 December 2019 to £222.1 million at 30 June 2020. The increase since 31 December 2019 is in contrast to our 5 normal working capital cycle which
Slide 14: H1 2020 Cash Flow since December 2019
H1 2020 CASH FLOW SINCE DECEMBER 2019 (£M) • Free cash inflow of circa £8 million including lease liabilities (see below). • Net IFRS 16 movements 20 include, the depreciation of right-of-use assets for £22.2 72 million, the interest expense on lease liabilities of £2.3 million 21 and the payment of
Slide 15: H1 2020 Net Revenue Strong
H1 2020 NET REVENUE STRONG (AS ADJUSTED) • Adjusted1 operating profit increased from 2.3 per cent of revenue to 3.1 Adjusted1 operating profit margin - Gross v Net per cent. Adjusted1 operating profit 12.0% margin percentage is always diluted by Technology Sourcing revenues, 10.0% which are typicall
Slide 16: H1 2020 Financial Returns Strong
H1 2020 FINANCIAL RETURNS STRONG Return on capital employed* 42.6% Return on capital 36.0% employed has increased 30.8% 31.1% from the level seen in H1 2019 as adjusted1 operating profit increased 18.3% from £56.1 million to 13.4% 14.6% £77.3 million but capital 9.0% 12.0% employed reduced from £466
Slide 17: 2020 Modelling Considerations
2020 MODELLING CONSIDERATIONS Tax Adjusted1 net interest Dependent on mix of earnings as we utilise losses in European operations and increase As the adjusted net funds3 are reduced due to the residual c£48.8 million term loan to purchase profits in our US business. The German cash tax rate has now
Slide 18: Acquisition of Pivot Technology Solutions, Inc
ACQUISITION OF PIVOT TECHNOLOGY SOLUTIONS, INC The Group announced today that on 8 September it entered into an credit facility (“JPMC Credit Facility”). The JPMC Credit Facility may be used for Arrangement Agreement pursuant to which Computacenter has agreed to revolving loans, letters of credit, p
Slide 19: Operating Review
OPERATING REVIEW Mike Norris 9 September 2020 19 l © Computacenter 2020
Slide 20: Top Line Growth Drivers
TOP LINE GROWTH DRIVERS 20 l © Computacenter 2020
Slide 21: Leading the Growth: Services Contract Base
LEADING THE GROWTH French decline stems primarily from the TO LEAD WITH AND GROW OUR SERVICES BUSINESS loss of the Group’s largest contract and dragged the overall Group contract base 800 down. UK and German renegotiations of renewals and extensions have affected the contract base slightly. Internat
Slide 22: Driving Efficiency
DRIVING EFFICIENCY Group TO IMPROVE OUR SERVICES PRODUCTIVITY Whilst overall revenues held up in the AND ENHANCE OUR COMPETITIVENESS challenging environment, margins and profits increased due to a reduction in UK Germany France costs to serve our customers across Despite the challenging conditions,
Slide 23: COVID-19 Impact (1)
COVID-19 IMPACT (1) We are a technology company operating across the globe in support of our customers, connectivity, both in an office and home working environment, has meant little to no at a time when technology has proven itself to be a critical mitigation to the disruption disruption to our Ser
Slide 24: COVID-19 Impact (2)
COVID-19 IMPACT (2) As the extent of the Group’s performance and resilience through the second quarter There are certain COVID-19 related one-off benefits included in the H1 2020 became known, we reassessed our participation in the employee retention cashflow and net cash positions including extende
Slide 25: Cost Reductions from Lockdown
COST REDUCTIONS FROM LOCKDOWN People-related expense reductions -30% • In the region of £20 million saved in Q2 from normal quarterly run rates. • The majority of costs saved relate to Services costs, in particular reduction of external spend, which leads to increased -60% margins, however a higher
Slide 26: 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 135 136 Our customers with over £1 million of contribution are a Strategic Priority for Group 104 107 118 performance. The USA and International Segments add 15 and five customers, respec
Slide 27: H1 2020 United Kingdom
Share of H1 2020 Revenue Profile H1 2020 UNITED KINGDOM FINANCIAL HIGHLIGHTS 19% • Revenue up by 7.2% • Adjusted1 operating profit up by 95.3% 6% • Technology Sourcing revenue up by 11.0% 75% • Services revenue down by 2.5% OPERATIONAL HIGHLIGHTS • Technology Sourcing saw strong revenue growth suppo
Slide 28: H1 2020 Germany
Share of H1 2020 Revenue Profile H1 2020 GERMANY FINANCIAL HIGHLIGHTS • Revenue decline of 2.8% 19% • Adjusted1 operating profit up by 15.4% • Technology Sourcing revenue down by 5.6% 13% • Services revenue growth of 3.6% 68% OPERATIONAL HIGHLIGHTS • The German Technology Sourcing business saw reduc
Slide 29: H1 2020 France
Share of H1 2020 Revenue Profile H1 2020 FRANCE FINANCIAL HIGHLIGHTS • Revenue up by 0.2% 18% • Adjusted1 operating profit down by 55.2% 5% • Technology Sourcing revenue up by 0.6% • Services revenue down by 1.4% 77% OPERATIONAL HIGHLIGHTS • The French business has suffered the most across our key T
Slide 30: H1 2020 USA
Share of H1 2020 Revenue Profile H1 2020 USA 1% FINANCIAL HIGHLIGHTS 1% • Revenue decreased by 0.1% • Adjusted1 operating profit increased by $4.3 million to $6.0 million in the period • Technology Sourcing revenue up by 0.7% 98% • Services revenue down by 26.5% OPERATIONAL HIGHLIGHTS Technology Sou
Slide 31: H1 2020 International
Share of H1 2020 Revenue Profile H1 2020 INTERNATIONAL FINANCIAL HIGHLIGHTS 35% • Revenue down by 17.2% • Adjusted1 operating profit down by 95.7% • Technology Sourcing revenue down by 20.3% 60% • Services revenue down by 11.8% 5% OPERATIONAL HIGHLIGHTS Technology Sourcing Professional Services • Th
Slide 32: Our Evolution in the US
OUR EVOLUTION IN THE US We are proud of our people, customers & capability in US: • Approx. US$1bn revenue • 600+ people • 30+ major international customers from Europe • US customers include global Hyperscale leaders 2005 2016 2018 2020 Established Computacenter US Inc. Took control of US service f
Slide 33: This Is Consistent with Our US Strategy
THIS IS CONSISTENT WITH OUR US STRATEGY Establish a “CC-like” US Growth Opportunity Vendor Positioning opportunity Computacenter’s Group model: capability in US for our control, scalability & leverage international customers • US is the most important • Huge market, quite • Vendors are US-centric an
Slide 34: What Does Merging with Pivot Bring for CC US
WHAT DOES MERGING WITH PIVOT BRING FOR CC US Computacenter US & Pivot combined >US$2bn US$160m 1,300 Doubles Own-provided our revenue Employees services Significantly increased Services scale: Canada Sales & Operations >350 Pivot Technical Additional Resources presence in Mid-West Integration Center
Slide 35: What Does Merging with CC US Bring for Pivot
WHAT DOES MERGING WITH CC US BRING FOR PIVOT Computacenter US & Pivot combined >US$2bn US$160m 1,300 Doubles Own-provided our revenue Employees services Integration Center in New York office & strong customer base Livermore CA, nr. Silicon Valley Additional presence in Mid-West US Managed Services R
Slide 36: Pivot Summary Profit and Loss Information
PIVOT SUMMARY PROFIT AND LOSS INFORMATION INCOME STATEMENT & EBITA SUMMARY (2019 - 2020) / USD (M) Income Statement H1-2019 H2-2019 H1-2020 6m to Jun-19 6m to Dec-19 6m to Jun-20 Total Revenue 637 572 519 APPROXIMATELY Product Sales 567 500 446 EQUIVALENT TO COMPUTACENTER Pivot Provided Services 38
Slide 37: Pivot Enterprise Value Bridge
PIVOT ENTERPRISE VALUE BRIDGE BASED ON PIVOT’S JUNE 2020 BALANCE SHEET IN USD$M EXCEPT SHARE PRICE QUOTED IN CAD$ LIKE COMPUTACENTER, PIVOT’S CASH/DEBT $22m $188m PROFILE IS SEASONAL $57m $168m ($1m) We are paying $133m ($14m) $79m for $119m ($9m) the Equity $110m and assuming $109m of Net Debt (ex
Slide 38: BT Services Acquisition Project
BT SERVICES ACQUISITION PROJECT 1: What are we acquiring 2: BT Services Scope 3: 2020 Results (Ended March 2020) BT Services provides Technical IT & Network Infrastructure One hundred per cent of the share capital of BT Services (2020 carve-out accounts established by EY) Services to French corporat
Slide 39: Outlook
OUTLOOK ‘As previously stated, our business has performed well this year to date and proven to be flexible in these extraordinary times. While nothing can be taken for granted, it is the Board’s view that, based on current business activity levels, our adjusted1 profit before tax for the year is unl
Slide 40: Appendix
APPENDIX 40 l © Computacenter 2020
Slide 41: 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 objectives GAAP) financial measures in addition to those reported in accordance with IFRS. on a constan
Slide 42: Glossary (continued)
GLOSSARY (CONTINUED) 3. Net funds Adjusted net funds or adjusted net debt includes cash and cash equivalents, other short or other long-term borrowings and current asset investments. Following the adoption of IFRS 16 this measure excludes all lease liabilities. A table reconciling this measure, incl
Slide 43: Change in Segmental Reporting
CHANGE IN SEGMENTAL REPORTING Management reviewed the way it reported Segmental performance to the Board and the Segment. We have therefore restated the Managed Services revenues for the year ended Chief Executive Officer, who is the Group’s Chief Operating Decision Maker (‘CODM’), 31 December 2019
Slide 44: Sources of Revenue: Percentage Change by Revenue Type
SOURCES OF REVENUE: PERCENTAGE CHANGE BY REVENUE TYPE Group UK 11.0% 14.0% 13.2% 7.2% 2.0% 1.1% 1.5% 0.5% 0.6% (0.2%) (0.9%) (3.5%) (2.5%) (5.8%) (6.4%) Technology Professional Managed Services Total Services Total Technology Professional Managed Services Total Services Total Sourcing Services Sourc
Slide 45: UK Adjusted Income Statement
UK ADJUSTED1 INCOME STATEMENT H1 2020 H1 2019 Change £m £m % Revenue 858.8 800.8 7.2% 1 Adjusted gross profit 122.6 101.5 20.8% 14.3% 12.7% 1.6% Administrative expenses (76.7) (78.0) (1.7%) (8.9%) (9.7%) 0.8% 1 Adjusted operating profit 45.9 23.5 95.3% 5.3% 2.9% 2.4% 1 Refer to the glossary for defi
Slide 46: UK Adjusted Operating Profit Walk
UK ADJUSTED1 OPERATING PROFIT WALK (£M) 1.3 1.3 7.5 9.3 5.6 45.9 23.5 H1 2019 Technology Technology Services Services SG&A H1 2020 EBIT* Sourcing Sourcing Volume GP % EBIT* Volume GP % * EBIT refers to adjusted1 operating profit 46 l © Computacenter 2020
Slide 47: Germany Adjusted Income Statement
GERMANY ADJUSTED1 INCOME STATEMENT H1 2020 H1 2019 H1 2020 H1 2019 Constant Change 2 £m £m €m €m currency Revenue 843.7 862.9 (2.2%) 966.4 994.3 (2.8%) 1 Adjusted gross profit 118.5 111.8 6.0% 135.3 128.7 5.1% 14.0% 13.0% 1.0% 14.0% 12.9% 1.1% Administrative expenses (82.9) (81.4) 1.8% (94.8) (93.6)
Slide 48: Germany Adjusted Operating Profit Walk
GERMANY ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 1.0 4.4 0.4 1.7 3.5 3.2 35.6 30.4 30.8 H1 2019 Currency H1 2019 Technology Technology Services Services SG&A H1 2020 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) * EBIT refers to adjusted1 operating p
Slide 49: France Adjusted Income Statement
FRANCE ADJUSTED1 INCOME STATEMENT H1 2020 H1 2019 H1 2020 H1 2019 Constant Change 2 £m £m €m €m currency Revenue 304.3 300.2 1.4% 346.5 345.9 0.2% 1 Adjusted gross profit 31.1 35.5 (12.4%) 35.4 41.0 (13.7%) 10.2% 11.8% (1.6%) 10.2% 11.9% (1.7%) Administrative expenses (27.3) (27.2) 0.4% (31.1) (31.4
Slide 50: France Adjusted Operating Profit Walk
FRANCE ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 2.0 0.2 0.1 0.1 3.0 8.3 8.4 0.3 3.8 H1 2019 Currency H1 2019 Technology Technology Services Services SG&A H1 2020 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) 50 l © Computacenter 2020 * EBIT refers to
Slide 51: Net Funds / (Debt)
NET FUNDS / (DEBT) • One of the Group’s primary measures when managing the business is adjusted net funds3. Adjusted net funds / Jun 20 Jun 19 Change • Adjusted net funds3 have increased 3 £m £m £m £152.2 million since 30 June 2019. (debt) • Operating cashflow for H1 2020 Cash and Cash Equivalents 2
Slide 52: Group Cash Flow
GROUP CASH FLOW H1 2020 H1 2019 £m £m Profit before tax 72.4 50.8 Net finance cost/(income) 2.7 3.0 Depreciation and amortisation 17.1 16.1 • Operating net cash inflow of £47.0 million Depreciation of right of use assets 22.2 - (H1 2019: outflow of £1.1 million). Share-based payments 3.8 3.1 (Profit
Slide 53: Group Balance Sheet
GROUP BALANCE SHEET H1 2020 H1 2019 Change £m £m £m Non-current assets Property, plant and equipment 222.3 213.3 9.0 Prepayments 4.2 2.8 1.4 Goodwill & Intangibles 180.6 188.2 (7.6) Investments in associates 0.1 0.1 0.0 Deferred income tax asset 9.5 9.4 0.1 416.6 413.7 2.9 Current assets Inventories
Slide 54: 2020 Interim Results
2020 INTERIM RESULTS Half year results to 30 June 2020 (09 September 2020)