COMPUTACENTER PLC Computacenter plc
Annual Report and Accounts 2022
HELPING OUR CUSTOMERS CHANGE THE WORLD
Strategic Report
2022 highlights
Eighteenth consecutive | Services revenue | Continued significant | India offshore headcount | ||||||||||||||||||||||||||
year of adjusted1 earnings | increased by 8.3 per cent, | programme of investments | grew to 1,100, a key | ||||||||||||||||||||||||||
per share growth | demonstrating our | to underpin our long-term | source of skills and | ||||||||||||||||||||||||||
development of | resilience, competitiveness | competitive advantage | |||||||||||||||||||||||||||
customer value | and growth | in the years ahead | |||||||||||||||||||||||||||
Customer accounts with | |||||||||||||||||||||||||||||
North American Segment | Achieved carbon neutral | Over 20,000 people | |||||||||||||||||||||||||||
continued to progress and | gross profit of over £1 million | status for Scope 1 and 2 | employed at the end of 2022, | ||||||||||||||||||||||||||
increased its gross profit by | per annum increased by 10.7 | emissions in 2022, making | highlighting the remarkable | ||||||||||||||||||||||||||
over 18 per cent in constant | per cent, showing our ability to | us one of the first companies | scale of our skills and | ||||||||||||||||||||||||||
currency2, in line with our | retain and develop long-term | in our industry to reach | resources globally | ||||||||||||||||||||||||||
plans and illustrating the | customer relationships | this milestone | |||||||||||||||||||||||||||
long-term opportunity | |||||||||||||||||||||||||||||
Revenue (£m) Gross invoiced income (£m) | Profit before tax (£m) | Adjusted1 profit before tax (£m) | |||||||||||||||||||||||||||
+28.5% | +30.7% | +0.4% | +3.2% | ||||||||||||||||||||||||||
6,470.5 | 9,052.2 | 249.0 | 263.7 | ||||||||||||||||||||||||||
2022 | 6,470.5 | 9,052.2 | 2022 | 249.0 | 2022 | 263.7 | |||||||||||||||||||||||
2021 | 5,034.5 | 6,923.5 | 2021 | 248.0 | 2021 | 255.6 | |||||||||||||||||||||||
2020 | 5,441.3 | 2020 | 206.6 | 2020 | 200.5 | ||||||||||||||||||||||||
2019 | 5,052.8 | 2019 | 141.0 | 2019 | 146.3 | ||||||||||||||||||||||||
2018 | 4,352.6 | 2018 | 108.1 | 2018 | 118.2 | ||||||||||||||||||||||||
Dividend per share (pence) | Diluted earnings per share (pence) | Adjusted1 diluted earnings per share (pence) | |||||||||||||||||||||||||||
+2.4% | -1.1% | +2.5% | |||||||||||||||||||||||||||
67.9 | 159.1 | 169.7 | |||||||||||||||||||||||||||
2022 | 67.9 | 2022 | 159.1 | 2022 | 169.7 | ||||||||||||||||||||||||
2021 | 66.3 | 2021 | 160.9 | 2021 | 165.6 | ||||||||||||||||||||||||
2020 | 50.7 | 2020 | 133.8 | 2020 | 126.4 | ||||||||||||||||||||||||
2019 | 10.1 | 2019 | 89.0 | 2019 | 92.5 | ||||||||||||||||||||||||
2018 | 30.3 | 2018 | 70.1 | 2018 | 75.7 | ||||||||||||||||||||||||
The metrics directly above represent the Group's financial key performance indicators. Following a recently approved interpretation of the revenue accounting standard by the International Accounting Standards Board, we, and a number of our peer value-added resellers, have changed the way we recognise revenues for standalone software and resold third-party services contracts and revised our accounting policies to reflect this change. Accordingly, we have restated our prior-year revenues down from £6,725.8 million as reported at 31 December 2021 to £5,034.5 million, as we have now determined that we are an agent for these transactions and will recognise revenue on a net basis, with only the gross profit on these types of deals, being the gross invoiced income less the costs of the resold software or third-party services, showing as revenue, with nothing recorded in cost of goods sold. This change has been applied from 2022 and, retrospectively, we have restated our prior-year 2021 revenues. The equivalent adjustment is not available for years prior to 2021 as it is not practicable to calculate. Further information on this change, including the retrospective restatement of the financial statements, and the revised accounting policy, is available in note 3 to the Consolidated Financial Statements. The result for the year benefited from £187.8 million of revenue (2021: £1.3 million), and £5.4 million of adjusted1 profit before tax (2021: £0.4 million), resulting from all acquisitions made since 1 January 2021. All figures reported throughout this Annual Report and Accounts include the results of these acquired entities. The results of these acquisitions are excluded where narrative discussion refers to 'organic' growth in this Annual Report and Accounts.
- Gross invoiced income, adjusted administrative expense, adjusted operating profit or loss, 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 does 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 on page 59 of the Group Finance Director's review, which details the impact of exceptional and other adjusted items when compared to the non-Generally Accepted Accounting Practice (GAAP) financial measures, in addition to those reported in accordance with IFRS. Further detail is provided within note 4 to the Consolidated Financial Statements.
- We evaluate the long-term performance and trends within our strategic priorities on a constant-currency basis. The performance of the Group and its overseas Segments are also 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-year local currency financial results using the current year average exchange rates and comparing these recalculated amounts to our current year results or by presenting the results in the equivalent local currency amounts. Wherever the performance of the Group, or its overseas Segments, is presented in constant currency, or equivalent local currency amounts, the equivalent prior-year measure is also presented in the reported pound sterling equivalent, using the exchange rates prevailing at the time. 2022 highlights, as shown above, are provided in the reported pound sterling equivalent. - 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 31 to the Consolidated Financial Statements.
- Gross invoiced income is based on the value of invoices raised to customers, net of the impact of credit notes and excluding VAT and other sales taxes. This reflects the cash movements to assist Management and the users of the Annual Report and Accounts in understanding revenue growth on a 'principal' basis and to assist in their assessment of working capital movements in the Consolidated Balance Sheet and Consolidated Cash Flow Statement. This measure allows an alternative view of growth in adjusted gross profit, based on the product mix differences and the accounting treatment thereon. Gross invoiced income includes all items recognised on an 'agency' basis within revenue, on a gross income billed to customers basis, as adjusted for deferred and accrued revenue. A reconciliation of revenue to gross invoiced income is provided within note 4 to the Consolidated Financial Statements.
The term Group refers to Computacenter plc and its subsidiaries.
Our Purpose
HELPING OUR CUSTOMERS
CHANGE THE WORLD
Our Purpose is helping our customers change the world. To support this, we build long-term trust with our customers, our people, our partners, our communities and our shareholders.
Our customers are some of the world's greatest organisations, in both the corporate and public sectors. They make world-changing decisions and investments, and while we do not change the world ourselves, we enable success for our customers so that they can realise the transformative benefits of information technology for their organisations, people, and the world. We work hard to get to know our customers, understand their needs and put them at the heart of everything we do.
Our Ambitions
- Our customers will strongly recommend us for the way we help them achieve their goals.
- We'll be the preferred route to market for technology vendors, who can rely on our reach and scale.
- People will want to join us, stay with us, and grow with us.
- We'll be a trusted, agile and innovative provider of technology and services across the world.
Who we are and what we do
Contents
Strategic Report IFC 2022 highlights 02 Chair's statement
- Chief Executive's strategic review
- Who we are
- What we do
- How we build sustainable value
- Our performance in 2022
- Sustainability
- Task Force on Climate-related Financial Disclosures
- Group Finance Director's review
- Section 172 statement
- Non-financialinformation statement
- Stakeholder engagement
- Principal risks and uncertainties
Governance Report
- Chair's governance overview
- Governance at a glance
- Board of Directors
- Executive team
- Corporate Governance report
- Nomination Committee report
- Risk and internal control
- Audit Committee report
- Directors' Remuneration report
- Directors' report
- Directors' Responsibilities
Financial Statements
141 Independent Auditor's report to the members of Computacenter plc
SOURCE
CIO
PEOPLE
BUSINESS
MANAGE
TRANSFORM
We are a leading independent technology
and services provider, trusted by large corporate and public sector organisations. We are a responsible business that believes in winning together for our people and our planet.
We help our customers to Source, Transform and Manage their technology infrastructure to deliver digital transformation, enabling people and their business.
- Consolidated Income Statement
- Consolidated Statement of Comprehensive Income
- Consolidated Balance Sheet
- Consolidated Statement of Changes in Equity
- Consolidated Cash Flow Statement
- Notes to the Consolidated Financial Statements
- Company Balance Sheet
- Company Statement of Changes in Equity
- Notes to the Company Financial
Strategic Priorities
CUSTOMER RELATIONSHIPS
Retain and maximise the relationships with our large corporate and public sector customers over the long term.
CUSTOMER VALUE
Build unrivalled value for our target market customers by combining our service and product capabilities.
SERVICES GROWTH
Lead with and grow our Services.
PRODUCTIVITY
Improve our productivity and enhance our competitiveness by leveraging our scale and building efficiencies.
Statements
- Group five-year financial review
- Financial calendar
- Corporate information
- Principal offices
Computacenter plc Annual Report and Accounts 2022 | 1
Strategic Report
Chair's statement
UNWAVERING IN OUR FOCUS
2 |Computacenter plcAnnual Report and Accounts 2022
During 2022, we announced one particularly significant piece of news - the planned retirement of our long-term Group Finance Director, Tony Conophy. Tony has been instrumental in establishing Computacenter as a successful listed company. His passion, commitment and expertise have made a lasting contribution to Computacenter's performance and culture. We thank him for his incredible service and wish him a long and happy retirement when he leaves the business early in the second half of 2023.
2022 was another year of good progress for Computacenter. This was achieved without the additional Covid-related volume and associated cost reductions that we saw in 2021 and, in the context of unpredictable economic conditions in our major markets, this made the performance of our team even more commendable.
Rising interest rates, rising inflation and significant supply chain shortages have placed the emphasis onP strong, pragmatic execution to deliver our results. We are particularly pleased with the performance of our business in Germany and the continued progress of our enlarged United States presence.
Financial performance and dividend Revenue for the full year increased by
28.5 per cent to £6,470.5 million (2021: £5,034.5 million). Gross invoiced income grew by 30.7 per cent to £9,052.2 million (2021: £6,923.5 million). The Group generated adjusted1 profit before tax of £263.7 million (2021: £255.6 million), and adjusted1 diluted EPS of 169.7 pence (2021: 165.6 pence). On a reported basis, the Group saw profit before tax of £249.0 million (2021: £248.0 million) and diluted EPS of 159.1 pence (2021: 160.9 pence).
We are proposing a final dividend of 45.8 pence per share. If approved by shareholders at Computacenter's 2023 Annual General Meeting, this will bring the full-year dividend for 2022 to 67.9 pence per share. This represents an increase of 2.4 per cent over that paid for 2021, and remains in line with our stated long-term dividend policy of paying a dividend that is covered between 2.0 and 2.5 times by adjusted1 diluted EPS.
The Group's cash position finished strongly at the end of the year, with adjusted net funds3 of £244.3 million as at 31 December 2022 (2021: £241.4 million). The Board continues to review our approach to capital allocation, so that it ensures balance sheet efficiency and appropriate returns for shareholders. Our use of cash continues to prioritise organic growth, the development of our business, and merger and acquisitions activity which aligns with our strategy, such as the acquisition of Business IT Source in the United States. Where available opportunities to invest in this way are limited, the Board will consider returning value to shareholders.
The Board in 2022
During 2022, there was one change to the Board, as Rene Haas decided to step down. We thank him for his commitment and contribution during his tenure.
We announced as his successor René Carayol, who brings a wealth of relevant experience and will be a valuable addition to our team.
As previously mentioned, we also announced the planned retirement of Tony Conophy, during 2023, as Group Finance Director.
We followed a robust process to identify his successor, assisted by an external search firm. This produced an impressive and diverse list of internal and external candidates, and we were delighted to announce that Christian Jehle will be appointed as Chief Financial Officer (CFO) when he joins the Company in June 2023.
Following René's appointment, half of the Board (excluding the Chair) remain as Independent Non-Executive Directors. We have just over 33 per cent female representation on the Board. New Listing Rules have now been introduced relating to Board diversity, which will be effective for our reporting in 2023. The Nomination Committee will consider these as part of its Board succession planning discussions during the year.
Environmental, Social and Governance The Board has continued its focus on sustainability, diversity and inclusion, and ensuring our governance practices evolve. These subjects are regarded as very important by both the Board and the people across Computacenter. You will find considerable detail on our approach to sustainability (pages 38-57).Our approach to Environmental, Social and Governance (ESG) matters reflects our Winning Together Values and supports the achievement of Our Purpose, in helping our customers change the world.
In terms of concrete commitments and results, we were carbon neutral in 2022 for Scope 1 and 2 emissions, which include all our direct emissions, such as our facilities,
and some of our indirect emissions, such as electricity purchased. We remain committed to our target to be Net Zero for Scope 1, 2 and 3 emissions by 2040. Scope 3 emissions include all other indirect emissions, including our business travel and transportation, as well as those from sources that we do not own or directly control, including our supply chain.
We are grateful to our long-term Group Finance Director, Tony Conophy, for his period of incredible service, and the lasting contribution he has made to Computacenter's performance and culture during his time with the organisation.
Peter Ryan
Chair
The year ahead
We are resolute in our focus on continuing to strengthen and grow Computacenter, to enable the success of all our stakeholders. I thank them all for their continued trust and support.
The impact of the global Covid pandemic now appears to be broadly under control and should not impact our business in 2023.
The fundamental demand drivers for our business continue to look strong as we enter 2023. We do recognise, however, that the prevailing economic conditions in our main markets mean that we will need to continue to execute strongly, as corporate and public sector organisations focus on controlling costs. However, they continue to invest in their digital transformations and this, alongside the confidence we have in our people and investments, makes us believe that 2023 will be another year of continued progress.
Peter Ryan
Chair
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 3
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Computacenter plc published this content on 17 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 April 2023 16:57:08 UTC.
