Slide 1: 2018 Interim Results
2018 INTERIM RESULTS Half year results to 30 June 2018 24 August 2018 1
Slide 2: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS Group adjusted1 Group revenue Adjusted1 diluted EPS Net funds3 Interim dividend of profit before tax £2.01bn £52.1m 32.7p £49.7m 8.7p • Group revenue increased 18.1 per cent to £2.01 billion (H1 2017: £1.70 billion) and by 16.8 per cent in constant currency2 • Group adju
Slide 3: H1 2018 Financial Highlights
H1 2018 FINANCIAL HIGHLIGHTS H1 2014 H1 2015 H1 2016 H1 2017 H1 2018 H1 2018 vs H1 2017 Revenue (£m) 1,458.3 1,441.4 1,478.2 1,700.3 2,008.9 18.1% Adjusted1 profit before tax (£m) 28.0 29.4 25.3 41.9 52.1 24.3% Adjusted1 diluted EPS (pence) 14.5 17.2 15.3 25.6 32.7 27.7% Dividend per share (pence) 5
Slide 4: Operating Highlights
H1 2018: OPERATING HIGHLIGHTS Group revenues exceed £2 billion for the half, the first time this milestone has been reached in Group the first six months of a year. The Group's total revenues grew £309 million during the period, £288 million in constant currency2; Germany delivers another strong per
Slide 5: Financial Review
FINANCIAL REVIEW Tony Conophy 24 August 2018 5
Slide 6: Group Adjusted Financial Results
H1 2018: GROUP ADJUSTED1 FINANCIAL RESULTS H1 2018 H1 2017 Constant Performance headlines Change £m £m currency2 • Revenue up 18.1 per cent, and by 16.8 per cent in constant currency2 2,008.9 1,700.3 18.1% 16.8% • Adjusted1 operating profit up 25.8 per cent, 24.9 per cent in constant currency2 Reven
Slide 7: Reconciliation to Statutory Results
H1 2018: RECONCILIATION TO STATUTORY RESULTS Exceptional H1 2018 Utilisation of H1 2018 H1 2017 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 2,008.9 - - - 2,008.9 1,700.3 18.1% Cost of sales (1
Slide 8: Exceptional and Other Adjusting Items
H1 2018: EXCEPTIONAL AND OTHER ADJUSTING ITEMS A net loss of £0.1 million was recorded, resulting from exceptional and other adjusting items (H1 2017: gain of £5.6 million). Exceptional items Other adjusting items • There are no exceptional items recorded in the period. • The Group excludes amortisa
Slide 9: Revenue by Segment
H1 2018: REVENUE BY SEGMENT Technology Sourcing revenue As noted in our Q1 Trading update on 27 April 2018, the UK revenue performance was flattered by a one-off software licence sale of £34.1 million, at very low margins. This deal, along with a further very similar deal of £36.7 million in Q2 2018
Slide 10: Revenue & Adjusted Operating Profit by Segment
H1 2018: REVENUE & ADJUSTED1 New Segmental Reporting is in place from the 30 June 2018 reporting period onwards. Refer to slide 11 for OPERATING PROFIT BY SEGMENT further details, and slide 12 for an analysis of Central Corporate Costs. UK performance saw a decrease in Services margins H1 2018 H1 20
Slide 11: Change in Segmental Reporting
CHANGE IN SEGMENTAL REPORTING During the first half of the year, Management reviewed the way it reported segmental The revised UK segment now only comprises the trading performance of performance to the Board and the Chief Executive Officer, who is the Group’s Chief Computacenter UK. Operating Decis
Slide 12: Central Corporate Costs
CENTRAL CORPORATE COSTS Jun 2018 Jun 2017 Change Dec 2017 Analysis of Central Corporate Costs £m £m £m £m Cost of the plc Board and related public company costs 1.5 1.5 (0.0) 3.7 Group Exec cost base (segment unaligned) 2.1 1.9 0.1 4.3 Share-based payments (Group Exec unaligned) 1.6 0.6 1.0 2.6 Stra
Slide 13: Group Adjusted Operating Profit Walk (£m)
H1 2018: GROUP ADJUSTED1 OPERATING PROFIT WALK (£M) (CONSTANT CURRENCY2) 4.0 0.0 13.3 1.6 0.3 26.1 52.1 41.4 41.7 H1 2017 Currency H1 2017 Technology Technology Services Services SG&A H1 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) 13 © Computacenter 2018 1,2
Slide 14: Closing Net Funds for the Period
H1 2018: CLOSING NET FUNDS3 • Net funds3 have decreased £141.5 million FOR THE PERIOD to £49.7 million since 31 December 2017 £m (H1 2017: £137.3 million). This is due to the Return of Value Tender Offer of £100 million completed in February 2018, the increase in the Kerpen facility of £8.6 100 mill
Slide 15: Cash Flow Since December 2017 (£m)
H1 2018: CASH FLOW SINCE DECEMBER 2017 (£M) • £100 million of cash 16 52 was returned to 8 shareholders via a -54 -6 0 Tender Offer completed -21 -13 on 14 February 2018 • Free cash outflow of -101 5 circa £13 million during -21 -3 -134 -1 -139 the period • Capital expenditure and Change in net fund
Slide 16: Net Revenue Strong
H1 2018: NET REVENUE STRONG (AS ADJUSTED1) • Adjusted1 operating profit increased from 2.4 per cent of revenue to 2.6 per cent. Adjusted1 operating profit margin - Gross v Net Adjusted1 operating profit margin percentage is always diluted by Technology Sourcing revenues, which 8.0% are typically ‘pa
Slide 17: Financial Returns Strong
H1 2018: FINANCIAL RETURNS STRONG Return on capital employed* 37.1% 36.0% 33.3% Return on capital employed 30.8% has increased from the level seen in H1 2017 as adjusted1 operating profit increased from £41.4 million to £52.1 million and capital employed grew from 14.6% 13.4% £308.3 million as at 30
Slide 18: Modelling Considerations
H1 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 H1 2018, a
Slide 19: Operating Review
OPERATING REVIEW Mike Norris 24 August 2018 19
Slide 20: Leading the Growth to Lead with and Grow Our Services Business
LEADING THE GROWTH UK growth stems primarily from renewals and extensions, whilst Germany continues to add new TO LEAD WITH AND GROW OUR SERVICES BUSINESS customers. France suffered the loss of a significant contract 800 with a major utility customer. Growth in 2018 is expected to be 700 flat overal
Slide 21: Driving Efficiency to Improve Our Services Productivity
DRIVING EFFICIENCY TO IMPROVE OUR SERVICES PRODUCTIVITY AND ENHANCE OUR COMPETITIVENESS UK Germany France Group Professional Services volumes have Complex implementations within Managed Services The expiry of a large Managed Services Managed Services margins remain reduced significantly as major pro
Slide 22: 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 107 Our customers with over £1 million of contribution are a 103 103 strategic Key Performance Indicator for Group performance. 101 95 15FY 16FY 17 H1 17 FY 18 H1 UK: The UK saw a number
Slide 23: H1 2018: UK
H1 2018: UK Share of H1 2018 Revenue Profile FINANCIAL HIGHLIGHTS 19% • Revenue up by 29.5% • Adjusted1 operating profit up 20.6% 7% • Technology Sourcing revenue up by 48.2% 74% • Services revenue down by 4.5% OPERATIONAL HIGHLIGHTS Technology Sourcing • Technology Sourcing margins remain depressed
Slide 24: H1 2018: Germany
H1 2018: GERMANY Share of H1 2018 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue growth of 11.4% 22% • Adjusted1 operating profit up by 53.1% • Technology Sourcing revenue up by 13.6% 9% • Services revenue growth of 6.8% 69% OPERATIONAL HIGHLIGHTS • The German Technology Sourcing business continues
Slide 25: H1 2018: France
H1 2018: FRANCE Share of H1 2018 Revenue Profile FINANCIAL HIGHLIGHTS 17% • Revenue down by 1.2% • Adjusted1 operating profit up 41.2% to €2.4 million 4% • Technology Sourcing revenue up by 2.0% • Services revenue down by 11.8% 79% OPERATIONAL HIGHLIGHTS • With the French business having exceeded ou
Slide 26: H1 2018: International
H1 2018: INTERNATIONAL Share of H1 2018 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue up by 14.4% • Adjusted1 operating profit down by 30.6% to £4.9 million 49% • Technology Sourcing revenue down by 2.4% 38% • Services revenue up by 28.0% OPERATIONAL HIGHLIGHTS 13% Technology Sourcing • Strong Prof
Slide 27: Top Line Growth Drivers
TOP LINE GROWTH DRIVERS 27 © Computacenter 2018 27 27
Slide 28: Profit Growth Drivers
PROFIT GROWTH DRIVERS 28 © Computacenter 2018 28
Slide 29: Outlook
OUTLOOK The Board’s outlook remains in line with its expectation which was upgraded on 12 July 2018. While the second half of the year is a more difficult comparison to the first half, due to the outstanding performance in H2 2017, 2018 is proving to be a year of significant progress particularly fo
Slide 30: Appendix
APPENDIX 30
Slide 31: 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 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: IFRS 15 Revenue with Customers Further Detail
H1 2018: IFRS 15 REVENUE WITH CUSTOMERS FURTHER DETAIL Background Adjustments were required in relation to: The accounting policies adopted for the period are consistent with those of the previous financial year as disclosed in the 2017 Annual Report and Accounts except • Certain costs, such as win
Slide 34: IFRS 15 Revenue with Customers Further Detail
H1 2018: IFRS 15 REVENUE WITH CUSTOMERS FURTHER DETAIL Impact of Adoption IFRS 15 has been adopted using the modified retrospective approach, therefore comparative amounts have not been restated. For comparability purposes, the following table gives the impact of the adoption of the new standard on
Slide 35: Sources of Revenue: % Change by Revenue Type
SOURCES OF REVENUE: % CHANGE BY REVENUE TYPE Group UK 48.2% 26.0% 24.3% 29.5% 18.1% 16.8% 3.0% 2.3% 1.8% 2.0% 1.2% 1.4% (5.3%) (4.1%) (4.5%) Technology Professional Managed Services Total Services Total revenue Technology Professional Managed Services Total Services Total revenue Sourcing revenue Se
Slide 36: UK: Adjusted Income Statement
UK: ADJUSTED1 INCOME STATEMENT H1 2018 H1 2017 Change £m £m % Revenue 858.1 662.8 29.5% 1 Adjusted gross profit 99.4 92.5 7.5% 11.6% 14.0% (2.4% ) Administrative expenses (73.6) (71.1) 3.5% (8.6% ) (10.7% ) 2.1% 1 Adjusted operating profit 25.8 21.4 20.6% 3.0% 3.2% (0.2% ) 36 © Computacenter 2018 1
Slide 37: UK: Adjusted Operating Profit Walk (£m)
UK: ADJUSTED1 OPERATING PROFIT WALK (£M) 5.2 2.4 3.9 2.5 18.4 25.8 21.4 H1 2017 Technology Technology Services Services SG&A H1 2018 EBIT* Sourcing Sourcing Volume GP % EBIT* Volume GP % * EBIT refers to adjusted1 operating profit 37 © Computacenter 2018 1,2 Refer to the glossary for definitions. 37
Slide 38: Germany: Adjusted Income Statement
GERMANY: ADJUSTED1 INCOME STATEMENT H1 2018 H1 2017 H1 2018 H1 2017 Constant Change £m £m €m €m currency2 Revenue 866.0 760.3 13.9% 984.1 883.2 11.4% 1 Adjusted gross profit 109.7 94.2 16.5% 124.7 109.4 14.0% 12.7% 12.4% 0.3% 12.7% 12.4% 0.3% Administrative expenses (77.5) (73.5) 5.4% (88.1) (85.5)
Slide 39: Germany: Adjusted Operating Profit Walk (£m)
GERMANY: ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 2.3 1.7 3.0 1.6 7.1 0.4 32.2 20.7 21.1 H1 2017 Currency H1 2017 Technology Technology Services Services SG&A H1 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) * EBIT refers to adjusted1 operating
Slide 40: France: Adjusted Income Statement
FRANCE: ADJUSTED1 INCOME STATEMENT H1 2018 H1 2017 H1 2018 H1 2017 Constant Change £m £m €m €m currency2 Revenue 230.7 228.6 0.9% 262.2 265.5 (1.2%) Adjusted1 gross profit 24.1 20.7 16.4% 27.4 24.0 14.2% 10.4% 9.1% 1.3% 10.5% 9.0% 1.5% Administrative expenses (22.0) (19.2) 14.6% (25.0) (22.3) 12.1%
Slide 41: France: Adjusted Operating Profit Walk (£m)
FRANCE: ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 0.8 2.4 0.1 3.4 0.0 0.3 2.1 1.5 1.5 H1 2017 Currency H1 2017 Technology Technology Services Services SG&A H1 2018 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) * EBIT refers to adjusted1 operating prof
Slide 42: Net Funds
NET FUNDS • One of the Group’s primary measures when managing the business is Net funds3 Jun 18 Jun 17 Change • Net funds3 have decreased Analysis of Net funds3 £141.5 million since 31 £m £m £m December 2017 Cash and cash equivalents 72.9 140.1 (67.2) • Operating cashflow for H1 Current asset invest
Slide 43: Group Cash Flow
GROUP CASH FLOW H1 2018 H1 2017 £m £m Profit before tax 52.0 47.5 Net finance income 0.1 (0.3) Depreciation and amortisation 13.5 14.9 • Operating net cash inflow of £8.4 million Share-based payments 3.1 1.9 (Gain)/loss on disposal of non-current assets (H1 2017: £11.4 million) Exceptional gain on d
Slide 44: Group Balance Sheet
GROUP BALANCE SHEET H1 2018 H1 2017 Change £m £m £m Non-current assets Property, plant and equipment 88.6 62.1 26.5 Note that £100 million of cash was returned Prepayments 3.8 - 3.8 to shareholders via a Tender Offer Goodwill & Intangibles 76.7 80.0 (3.3) Investments in associates 0.1 0.1 0.0 comple
Slide 45: Thank You
THANK YOU 45 © Computacenter 2018 45