Half-Year interim Results 2021

Computacenter plc - Interim results for the six months ended 30 June 2021

Computacenter plc ("Computacenter" or the "Group"), a leading independent technology partner trusted by large corporate and public sector organisations, today announces results, based on unaudited financial information, for the six month period ended 30 June 2021.

Operational Highlights:

• The Group’s total revenues grew 29.2 per cent during the first half of the year, by 31.4 per cent in constant currency², and by 9.0 per cent in constant currency² organically, without the impact of acquisitions made since 1 January 2020. Significant increases in expenditure from industrial customers have complemented continuing business within the public and financial services sectors. Ongoing COVID-19 related cost reductions and further improved Services and Technology Sourcing margins has resulted in an increase in adjusted¹ profit before tax of 59.4 per cent during the period to £118.9 million.
   
• The UK saw an increase in revenues of 9.4 per cent as Technology Sourcing revenues saw further strong growth to cope with the residual demand generated by the COVID-19 crisis and Professional Services revenues saw very encouraging growth as previously delayed projects recommenced and customers began new transformation programmes. Strong Services margins, due to increased utilisation and reduced external contractor costs and stable Technology Sourcing margins have resulted in an increase in adjusted¹ operating profit of 12.6 per cent during the period.
   
• Germany saw overall revenues increase by 10.5 per cent on a constant currency² basis with excellent growth in Managed Services and Technology Sourcing and another very strong performance in Professional Services. The increase in Professional Services volumes, at higher margins, coupled with overall margin improvements have resulted in an increase of 74.6 per cent in adjusted¹ operating profit on a constant currency² basis.
   
• France has had a difficult start to the year, being impacted by the ongoing slow-down of its large industrial private sector customer base, lower than expected orders from its largest Technology Sourcing customer and the expected downturn in its Services business due to the cessation of the Group’s largest Managed Services contract which impacted from H2 2020. This has resulted in an 8.5 per cent decrease in organic revenues on a constant currency² basis, decreasing gross profits and a reduction in overall adjusted¹ operating profit from €4.3 million to a loss of €2.3 million including the results of the Computacenter NS acquisition.
   
• North America has seen strong organic revenue growth of 18.1 per cent increasing to 164.7 including the Pivot acquisition, both on a constant currency² basis. The combined growth has meant that, during the first half of the year, the North American business had the largest Technology Sourcing revenues of any Segment within the Group with over $1.2 billion of Technology Sourcing sales, up from virtually nil in H1 2018. The hyperscale FusionStorm customers and mid-market clients of Pivot both saw a good return to growth in the period. Services revenue saw modest improvements in revenue organically with the Pivot acquisition contributing a further $43.5 million of Services revenue in the period. Adjusted¹ operating profit, including the impact of Pivot, has increased from $6.0 million in H1 2020 to $25.9 million in H1 2021.

The Group has experienced significant operational impacts due to the COVID-19 pandemic during the period to 30 June 2021. All results in this announcement include these COVID-19 impacts and no attempt has been made to adjust for or exclude these impacts whether they be positive or negative. Further information on the COVID-19 impacts on the Group, and our response, can be found within the Performance Review within this announcement. The continued adoption of the going concern basis by the Directors in the preparation of the Interim Condensed Consolidated Financial Statements is set out in note 2 to the summary financial information contained within this announcement.

The result for the half-year has benefited from £541.9 million of revenue (H1 2020: nil), and £6.8 million of adjusted¹ profit before tax (H1 2020: nil), resulting from all acquisitions made since 1 January 2020. All figures reported throughout this announcement include the results of these acquired entities. The results of these acquisitions are assumed to be excluded where narrative discussion refers to ‘organic’ growth in this announcement.

A reconciliation between key adjusted¹ and statutory measures is provided within the Group Finance Director’s review contained in this announcement. Further details are provided in note 5 to the summary financial information contained within this announcement.

¹ Adjusted operating profit or loss, adjusted net finance income or expense, adjusted profit or loss before tax, adjusted tax, adjusted profit or loss, adjusted earnings per share and adjusted diluted earnings per share are, as appropriate, each stated before: exceptional and other adjusting items including gains or losses on business acquisitions and disposals, amortisation of acquired intangibles, utilisation of deferred tax assets (where initial recognition was as an exceptional item or a fair value adjustment on acquisition), and the related tax effect of these exceptional and other adjusting items, as Management do not consider these items when reviewing the underlying performance of the Segment or the Group as a whole. A reconciliation to adjusted measures is provided within the Group Finance Director’s review contained in this announcement which details the impact of exceptional and other adjusted items when compared to the non-Generally Accepted Accounting Practice financial measures in addition to those reported in accordance with IFRS. Further detail is provided within note 5 to the summary financial information contained in this announcement.

² We evaluate the long-term performance and trends within our Strategic Priorities on a constant currency basis. Further, the performance of the Group and its overseas Segments are shown, where indicated, in constant currency. The constant currency presentation, which is a non-GAAP measure, excludes the impact of fluctuations in foreign currency exchange rates. We believe providing constant currency information gives valuable supplemental detail regarding our results of operations, consistent with how we evaluate our performance. We calculate constant currency percentages by converting our prior-period local currency financial results using the current period average exchange rates and comparing these recalculated amounts to our current period results or by presenting the results in the equivalent local currency amounts. Wherever the performance of the Group, or its overseas Segments, are presented in constant currency, or equivalent local currency amounts, the equivalent prior-period measure is also presented in the reported pound sterling equivalent using the exchange rates prevailing at the time. 2021 interim highlights, as shown above are provided in the reported pound sterling equivalent.

³ Adjusted net funds or adjusted net debt includes cash and cash equivalents, other short or long-term borrowings and current asset investments. Following the adoption of IFRS 16 this measure excludes all lease liabilities .A table reconciling this measure, including the impact of lease liabilities, is provided within note 13 to the summary financial information contained in this announcement.