Slide 1: 2019 Interim Results
2019 INTERIM RESULTS Half year results to 30 June 2019 (23 August 2019)
Slide 2: H1 2019 Financial Highlights
H1 2019 FINANCIAL HIGHLIGHTS Group adjusted1 Cash and cash Group revenue Adjusted1 diluted EPS Interim dividend of profit before tax equivalents £2.4bn £53.5m 34.5p £114.3m 10.1p • Group revenue increased 20.8 per cent • Cash and cash equivalents of £114.3 million (H1 2018: to £2.4 billion (H1 2018:
Slide 3: H1 2019 Financial Highlights
H1 2019 FINANCIAL HIGHLIGHTS H1 2015 H1 2016 H1 2017 H1 2018 H1 2019 H1 2019 vs H1 2018 Revenue (£m) 1,441.4 1,478.2 1,700.3 2,008.9 2,427.0 20.8% Adjusted1 profit before tax (£m) 29.4 25.3 41.9 52.1 53.5 2.7% Adjusted1 diluted EPS (pence) 17.2 15.3 25.6 32.7 34.5 5.5% Dividend per share (pence) 6.4
Slide 4: H1 2019 Operating Highlights
H1 2019 OPERATING HIGHLIGHTS The Group’s total revenues grew 20.8 per cent or £418.1 million during the first half of the year, and by 21.6 per cent or £431.5 Group million during the period in constant currency2. Excluding the impact of acquisitions the Group was ahead of the same period last year,
Slide 5: Financial Review
FINANCIAL REVIEW Tony Conophy 23 August 2019 5 © Computacenter 2019
Slide 6: Group Adjusted Financial Results
H1 2019 GROUP ADJUSTED1 FINANCIAL RESULTS Performance headlines H1 2019 H1 2018 Constant Change • Revenue up 20.8 per cent, and by 21.6 per cent in constant currency2 £m £m currency 2 • Adjusted1 operating profit up 7.7 per cent and by 8.5 per cent in constant currency2 Revenue 2,427.0 2,008.9 20.8%
Slide 7: Reconciliation to Statutory Results
H1 2019 RECONCILIATION TO STATUTORY RESULTS Exceptional H1 2019 Amortisation Utilisation of H1 2019 H1 2018 and other Statutory of acquired DE deferred Adjusted1 Adjusted1 Change adjusting results intangibles tax asset results results items £m £m £m £m £m £m % Revenue 2,427.0 - - - 2,427.0 2,008.9 2
Slide 8: Exceptional and Other Adjusting Items
H1 2019 EXCEPTIONAL AND OTHER ADJUSTING ITEMS The profit before tax impact from exceptional and other adjusting items was a net loss of £2.7 million (H1 2018: loss of £0.1 million). Tax items resulted in a gain of £1.2 million (H1 2018: loss of £1.1 million). The net loss from exceptional and other
Slide 9: Revenue by Segment
H1 2019 REVENUE BY SEGMENT Technology Sourcing revenue H1 2019 H1 2018 H1 2019 H1 2018 Constant Change As noted in our 2018 Interim Report and Accounts, the £m £m £m/€m/$m £m/€m/$m currency2 prior year revenue performance was flattered by two one- Technology Sourcing revenue off software licence sal
Slide 10: Revenue and Adjusted Operating Profit by Segment
H1 2019 REVENUE AND ADJUSTED1 New Segmental Reporting is in place for 2019 reporting. Refer slide 37 for further details, and slide 11 for an analysis OPERATING PROFIT BY SEGMENT of Central Corporate costs. UK performance saw a slight increase in gross profit offset Constant by increasing administra
Slide 11: Central Corporate Costs
CENTRAL CORPORATE COSTS H1 2019 H1 2018 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) 3.4 3.6 (0.2) Shared-based payments (Group Exec segment unaligned) 1.1 1.6 (0.5) Strategic corporate initiative
Slide 12: Group Adjusted Operating Profit Walk (£m)
H1 2019 GROUP ADJUSTED1 OPERATING PROFIT WALK (£M) (CONSTANT CURRENCY2) 7.9 2.9 4.7 49.0 (0.4) 37.9 52.1 51.7 56.1 H1 2018 Currency H1 2018 Technology Technology Services Services SG&A H1 2019 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) 12 © Computacenter 2019 1,
Slide 13: Closing Adjusted Net Debt
H1 2019 CLOSING ADJUSTED NET DEBT3 • Cash and cash equivalents have increased by £41.4 million since 30 June 2018 but are down by £86.1 million since 31 December 2018 as £m we work through our normal working capital cycle in the first six months of the year. 5 • Adjusted net debt3 has increased by £
Slide 14: Cash Flow Since December 2018 (£m)
H1 2019 CASH FLOW SINCE DECEMBER 2018 (£M) • Free cash outflow of circa £42 million including lease liabilities (see below) • Capital expenditure and investments also include the acquisition of PathWorks GmbH for £2.9 million 18 • $10 million contingent liability paid 51 to the FusionStorm vendors f
Slide 15: Net Revenue Strong
H1 2019 NET REVENUE STRONG (AS ADJUSTED) • Adjusted1 operating profit decreased from 2.6 per cent of revenue to 2.3 Adjusted1 operating profit margin - Gross v Net per cent. Adjusted1 operating profit 9.0% margin percentage is always diluted 8.0% by Technology Sourcing revenues, 7.0% which are typic
Slide 16: Financial Returns Strong
H1 2019 FINANCIAL RETURNS STRONG Return on capital employed* 37.1% Return on capital 36.0% employed has decreased 30.8% 31.1% from the level seen in H1 2018 as adjusted1 operating profit increased 14.6% from £52.1 million to 13.4% 11.0% 12.0% £56.1 million but capital 9.0% employed grew from £355.9
Slide 17: H2 2019 Modelling Considerations
H2 2019 MODELLING CONSIDERATIONS Tax Adjusted1 net interest Dependent on mix of earnings as we utilise losses in European operations. As the adjusted net funds3 have decreased into an adjusted net debt3 position due to the £94 million term loan to purchase FusionStorm and the c£29 million loan to co
Slide 18: Operating Review
OPERATING REVIEW Mike Norris 23 August 2019 18 © Computacenter 2019
Slide 19: Top Line Growth Drivers
TOP LINE GROWTH DRIVERS 19 © Computacenter 2019
Slide 20: Leading the Growth: Services Contract Base
LEADING THE GROWTH UK and French decline growth stems primarily from renegotiations of renewals TO LEAD WITH AND GROW OUR SERVICES BUSINESS and extensions. Germany flat although will show a reduction against Dec ’18 due to the expected loss of a contract. 800 Growth in 2019 is expected to continue t
Slide 21: Driving Efficiency
DRIVING EFFICIENCY TO IMPROVE OUR SERVICES PRODUCTIVITY AND ENHANCE OUR COMPETITIVENESS Group UK Germany France Professional Services revenue decreased Our Professional Services business grew The new Managed Services contracts and Managed Services margins have improved during the period. The nature
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 107 118 119 GROUP 95 103 Our customers with over £1 million of contribution are a Strategic Key Performance Indicator for Group performance. The USA acquisition has 11 new customers that each g
Slide 23: United Kingdom
H1 2019 UNITED KINGDOM Share of H1 2019 Revenue Profile FINANCIAL HIGHLIGHTS 20% • Revenue down by 7.8% • Adjusted1 operating profit down by 9.3% • Technology Sourcing revenue down by 8.5% 7% 73% • Services revenue down by 5.8% OPERATIONAL HIGHLIGHTS Technology Sourcing • Technology Sourcing was up
Slide 24: Germany
H1 2019 GERMANY Share of H1 2019 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue growth of 4.1% 21% • Adjusted1 operating profit up by 2.7% • Technology Sourcing revenue up by 3.9% 10% • Services revenue growth of 4.5% 69% OPERATIONAL HIGHLIGHTS • The German Technology Sourcing business has coped wel
Slide 25: France
H1 2019 FRANCE Share of H1 2019 Revenue Profile FINANCIAL HIGHLIGHTS • Revenue up by 19.3% 15% • Adjusted1 operating profit up €4.7 million to €7.1 million 4% • Technology Sourcing revenue up by 22.7% • Services revenue up by 6.4% 81% OPERATIONAL HIGHLIGHTS • The French business continues to go from
Slide 26: USA
H1 2019 USA Share of H1 2019 Revenue Profile 3% FINANCIAL HIGHLIGHTS 2% • Revenue of $491.4 million in the period with the FusionStorm business acquired in 2018 contributing $474.5 million • Adjusted1 operating profit of $1.7 million in the period (H1 2018: $0.5 million) with approximately half comi
Slide 27: International
H1 2019 INTERNATIONAL Share of H1 2019 Revenue Profile FINANCIAL HIGHLIGHTS 35% • Revenue up by £54.6 million including the contribution from acquisitions of £49.4 million • Adjusted1 operating profit up by £1.6 million including the contribution from acquisitions of £0.8 million 63% 2% OPERATIONAL
Slide 28: Acquisitions
ACQUISITIONS 28 © Computacenter 2019
Slide 29: Outlook
OUTLOOK The Board’s outlook remains in line with its expectations, which were upgraded as per the Trading Update on 31 July 2019. Whilst the performance of the first half of 2018 presented a very difficult challenge to beat, the opposite is true of the second half. The Board expects that the full ye
Slide 30: Appendix
APPENDIX 30 © Computacenter 2019
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 (debt)/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 finance lease liabilities which now includes CSF b
Slide 33: Exceptional and Other Adjusting Items (1/2)
H1 2019 EXCEPTIONAL AND OTHER ADJUSTING ITEMS (1/2) The net loss from exceptional and other adjusting items in the year was £1.5 million (H1 2018: loss of £1.2 million). Excluding the tax items noted below which resulted in a statutory gain of £1.2 million (H1 2018: loss of £1.1 million), the profit
Slide 34: Exceptional and Other Adjusting Items (2/2)
H1 2019 EXCEPTIONAL AND OTHER ADJUSTING ITEMS (2/2) The net loss from exceptional and other adjusting items in the year was £1.5 million (H1 2018: loss of £1.2 million). Excluding the tax items noted below which resulted in a statutory gain of £1.2 million (H1 2018: loss of £1.1 million), the profit
Slide 35: 2019 IFRS 16 Leases Further Detail (1/2)
2019 IFRS 16 LEASES FURTHER DETAIL (1/2) Background The accounting policies adopted for the period are consistent with those of the IFRS 16 therefore results in an increase to operating profit, which is reported prior to previous financial period as disclosed in the 2018 Annual Report and Accounts i
Slide 36: 2019 IFRS 16 Leases Further Detail (2/2)
2019 IFRS 16 LEASES FURTHER DETAIL (2/2) Impact of Adoption The adoption of IFRS 16 has had a significant impact on the presentation of the Had IAS 17 continued in operation during the period, Group profit before tax, Group’s assets and liabilities. The right-of-use assets are included within proper
Slide 37: Change in Segmental Reporting
CHANGE IN SEGMENTAL REPORTING Due to the acquisitions made in 2018, Management has further reviewed the way it based in Neudorf (Luzern), Switzerland. This acquisition allows us to add reported segmental performance to the Board and the Chief Executive Officer, who Technology Sourcing to our existin
Slide 38: Sources of Revenue: Percentage Change by Revenue Type
SOURCES OF REVENUE: PERCENTAGE CHANGE BY REVENUE TYPE Group UK (3.0%) (5.8%) (8.5%) (7.8%) (12.9%) 27.7% 28.7% 7.5% 8.2% 20.8% 21.6% 3.6% 4.1% 2.2% 2.6% Technology Professional Managed Services Total Services Total Technology Professional Managed Services Total Services Total Sourcing Services Sourc
Slide 39: UK Adjusted Income Statement
UK ADJUSTED1 INCOME STATEMENT H1 2019 H1 2018 Change £m £m % Revenue 793.9 861.1 (7.8%) Adjusted1 gross profit 101.5 100.4 1.1% 12.8% 11.7% 1.1% Administrative expenses (78.0) (74.5) 4.7% (9.8%) (8.7%) (1.1%) 1 Adjusted operating profit 23.5 25.9 (9.3%) 3.0% 3.0% 0.0% 1 Refer to the glossary for def
Slide 40: UK Adjusted Operating Profit Walk (£m)
UK ADJUSTED1 OPERATING PROFIT WALK (£M) 3.5 4.4 2.8 4.2 4.1 25.9 23.5 H1 2018 Technology Technology Services Services SG&A H1 2019 EBIT* Sourcing Sourcing Volume GP % EBIT* Volume GP % * EBIT refers to adjusted1 operating profit 40 © Computacenter 2019
Slide 41: Germany Adjusted Income Statement
GERMANY ADJUSTED1 INCOME STATEMENT H1 2019 H1 2018 H1 2019 H1 2018 Constant Change £m £m €m €m currency2 Revenue 889.0 866.0 2.7% 1,024.4 984.1 4.1% 1 Adjusted gross profit 115.1 109.7 4.9% 132.6 124.7 6.3% 12.9% 12.7% 0.2% 12.9% 12.7% 0.2% Administrative expenses (82.5) (77.5) 6.5% (95.0) (88.1) 7.
Slide 42: Germany Adjusted Operating Profit Walk (£m)
GERMANY ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 6.0 0.5 1.8 0.6 2.1 2.4 32.2 31.7 32.6 H1 2018 Currency H1 2018 Technology Technology Services Services SG&A H1 2019 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % * EBIT refers to adjusted1 operating profit curre
Slide 43: France Adjusted Income Statement
FRANCE ADJUSTED1 INCOME STATEMENT H1 2019 H1 2018 H1 2019 H1 2018 Constant Change £m £m €m €m currency2 Revenue 271.4 230.7 17.6% 312.7 262.2 19.3% 1 Adjusted gross profit 32.2 24.1 33.6% 37.1 27.4 35.4% 11.9% 10.4% 1.5% 11.9% 10.5% 1.4% Administrative expenses (26.1) (22.0) 18.6% (30.0) (25.0) 20.0
Slide 44: France Adjusted Operating Profit Walk (£m)
FRANCE ADJUSTED1 OPERATING PROFIT WALK (£M) CONSTANT CURRENCY2 4.3 0.3 0.4 3.6 6.1 0.0 4.0 2.1 2.1 H1 2018 Currency H1 2018 Technology Technology Services Services SG&A H1 2019 EBIT* EBIT* Sourcing Sourcing Volume GP % EBIT* (constant Volume GP % currency2) * EBIT refers to adjusted1 operating profi
Slide 45: Net (Debt)/Funds
NET (DEBT)/FUNDS • One of the Group’s primary measures when managing the business is adjusted net funds3 • Adjusted net funds3 have Jun 19 Jun 18 Change Adjusted net funds3 decreased £56.8 million since £m £m £m 30 June 2018 Cash and cash equivalents 114.3 72.9 41.4 • Operating cashflow for 2018 was
Slide 46: Group Cash Flow
GROUP CASH FLOW H1 2019 H1 2018 £m £m Profit before tax 50.8 52.0 Net finance cost/(income) 3.0 0.1 Depreciation and amortisation 16.1 13.5 • Operating net cash outflow of £1.1 million Share-based payments 3.1 3.1 (H1 2018: inflow of £8.4 million) Loss/(profit) on disposal of non-current assets 0.0
Slide 47: Group Balance Sheet
GROUP BALANCE SHEET H1 2019 H1 2018 Change £m £m £m Non-current assets Property, plant and equipment 213.3 88.6 124.7 Prepayments 2.8 3.8 (1.0) • On initial application of IFRS 16 ‘Leases’, Goodwill & Intangibles 188.2 76.7 111.4 the Group has elected to record right-of- Investments in associates 0.
Slide 48: Interim Results
H1 2019 INTERIM RESULTS Interim results to 30 June 2019 (23 August 2019)