Slide 1: Results for the six months ended 31 January 2024
Results for the six months ended 31 January 2024 Graham Charlton, CEO Katy Mecklenburgh, CFO 26 March 2024
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 2,468 £2
Slide 3: A diverse offering
A diverse offering Our comprehensive technology offering is sold across all customer segments and creates exciting potential for growth in both customer numbers and sales to existing customers Customer segment Product Technology Public cloud Enterprise Services Workplace and datacentre Public Softwa
Slide 4: H1 FY24 summary results
H1 FY24 summary results Encouraging growth, forward momentum • Gross profit growth of 11.0% to £196.5m • Operating profit up 5.8% to £66.7m, ahead of expectations • Gross invoiced income up 4.0% to £1.26bn • Revenue reduced (8.8)% to £467.2m • Gross profit per customer growth of 9.6% to £38.9k • Cus
Slide 5: H1 FY24 highlights and business update
H1 FY24 highlights and business update Sustained growth against tough compares, broad-based demand • Double-digit gross profit growth coming from a broad range of technology areas and customer segments • Customers are very interested in Gen-AI and we are leading the way on the Microsoft Copilot oppo
Slide 6: H1 FY24 highlights and business update (continued)
H1 FY24 highlights and business update (continued) Continuing to invest in our people and culture • Awarded 5th Best Place to Work 2023 • Added a net 314 new employees, taking the team to nearly 2,500, an increase of 14.6% • As planned, we will slow this rate of growth a little in H2 and into FY25 a
Slide 7: Strategy update and progress
Strategy update and progress Acquire Sell more to more customers existing customers • Customer base up net 100 (+1.3%) • Gross profit per customer up 9.6% • Penetration of target market remains at • Investing in our offering across new and c.20% evolving technologies including AI, • New strategies a
Slide 8: The AI Opportunity
The AI Opportunity Satya Nadella I think [AI] is going to have a very, very foundational impact. Everything from power Microsoft CEO density…datacentre design…the main compute unit…the network, the memory architecture, all of it. So, the core computer architecture changes. I think every workload cha
Slide 9: The many branches of the AI opportunity
The many branches of the AI opportunity Machine Conditional Learning models Artificial Neural Intelligence Natural modelling fields language processing Deep learning Generative AI Computer vision Intelligent control Speech audition Expert Systems Pattern recognition Softcat is a market leader for Mi
Slide 10: Sustainability & ESG
Sustainability & ESG Vision Sustainability We strive for a sustainable future and one where our people and our planet can prosper Environmental Social Governance Softcat Operations People & Community Risk Strategy Supply Chain Education & Economy Reporting Customer Solutions Diversity & Inclusion Co
Slide 11: H1 FY24 Financial Review
H1 FY24 FINANCIAL REVIEW Katy Mecklenburgh, CFO Results for the year ended 31 July 2023 11
Slide 12: Summary income statement
Summary income statement £m H1 FY24 H1 FY23 Change 1• Gross invoiced income (GII) growth was driven by software (+11.9%) and services (+13.3%), partially offset by hardware, Gross invoiced 1,263.5 1,214.7 1 4.0% down ((17.6)%) due to low market demand for client income devices and several large low
Slide 13: Account manager productivity gains from selling deeper into customers
Account manager productivity gains from selling deeper into customers 450 H1 24 400 FY23 Gross Profit (£m) H1 23 350 FY22 H1 22 300 FY21 H1 21 250 FY20 H1 20 FY19 H1 19 200 FY18 H1 18 150 FY17 H1 17 FY16 H1 16 FY15 100 900 1,400 1,900 2,400 2,900 Cumulative years of experience of account managers Re
Slide 14: Customer base and gross profit per customer
Customer base and gross profit per customer 10,000 £39k 9,500 £34k 9,000 £29k 8,500 £24k 8,000 £19k 7,500 7,000 £14k H1 16 FY16 H1 17 FY17 H1 18 FY18 H1 19 FY19 H1 20 FY20 H1 21 FY21 H1 22 FY22 H1 23 FY23 H1 24 Customer Count Gross profit per Customer Customer Count: is defined as the number of enti
Slide 15: Cash flow
Cash flow £m H1 FY24 H1 FY23 • Small net working capital outflow in the period 1 reflecting the unwinding of the elevated net working Operating profit 66.7 63.1 capital position at H1 FY23 following the introduction of Depreciation and amortisation 3.2 3.0 the new finance system Net movement in work
Slide 16: Dividend
Dividend H1 FY24 H1 FY23 • The Company remains debt free. Interim 8.5p 8.0p • Our capital allocation framework is to prioritise investment Ex-dividend date 11 April 2024 into future organic growth, followed by maintaining a progressive ordinary dividend policy. Any additional excess Payment date 22
Slide 17: Outlook
Outlook • Our positive performance over the first six months of the financial year reinforces our expectations to deliver on our full year guidance of double-digit gross profit and high-single digit operating profit growth. • We continue to see significant and expanding opportunities in our market a
Slide 18: Closing remarks
CLOSING REMARKS Graham Charlton, CEO Results for the year ended 31 July 2023 18
Slide 19: Summary
Summary A positive performance • H1 FY24 delivered double digit gross profit growth and operating profit growth ahead of expectations • Broad based growth across technologies and customer segments delivering customer growth and expanding gross profit per customer • Reinforces our expectations to del