Computacenter plc
Annual Report and Accounts 2022
HELPING OUR CUSTOMERS
CHANGE THE WORLD
2022 highlights
Eighteenth consecutive
year of adjusted1 earnings
per share growth
Services revenue
increased by 8.3 per cent,
demonstrating our
development of
customer value
Continued significant
programme of investments
to underpin our long-term
resilience, competitiveness
and growth
India offshore headcount
grew to 1,100, a key
source of skills and
competitive advantage
in the years ahead
North American Segment
continued to progress and
increased its gross profit by
over 18 per cent in constant
currency2, in line with our
plans and illustrating the
long-term opportunity
Customer accounts with
gross profit of over £1 million
per annum increased by 10.7
per cent, showing our ability to
retain and develop long-term
customer relationships
Achieved carbon neutral
status for Scope 1 and 2
emissions in 2022, making
us one of the first companies
in our industry to reach
this milestone
Over 20,000 people
employed at the end of 2022,
highlighting the remarkable
scale of our skills and
resources globally
Revenue (£m) Gross invoiced income (£m)
+28.5%
+30.7%
Profit before tax (£m)
+0.4%
6,470.5
9,052.2
6,470.5
9,052.2
249.0
Adjusted1 profit before tax (£m)
+3.2%
263.7
2022
2021
2020
2019
2018
5,034.5
6,923.5
5,441.3
5,052.8
4,352.6
2022
2021
2020
2019
2018
249.0
248.0
206.6
2022
2021
2020
2019
2018
141.0
108.1
146.3
118.2
263.7
255.6
200.5
Dividend per share (pence)
+2.4%
Diluted earnings per share (pence)
-1.1%
Adjusted1 diluted earnings per share (pence)
+2.5%
67.9
2022
2021
2020
2019
10.1
2018
30.3
67.9
66.3
50.7
159.1
2022
2021
2020
2019
2018
89.0
70.1
159.1
160.9
133.8
169.7
2022
2021
2020
2019
2018
126.4
92.5
75.7
169.7
165.6
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.
1. 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.
2. 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.
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 31 to the Consolidated Financial Statements.
4. 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.
Strategic Report
Our Purpose
Contents
Chief Executive’s strategic review
Strategic Report
IFC 2022 highlights
02 Chair’s statement
04
06 Who we are
14 What we do
18 How we build sustainable value
24 Our performance in 2022
38
54
Sustainability
Task Force on Climate-related
Financial Disclosures
Group Finance Director’s review
Section 172 statement
Non-financial information statement
Stakeholder engagement
Principal risks and uncertainties
58
69
69
70
74
Chair’s governance overview
Governance Report
83
84 Governance at a glance
86 Board of Directors
88
Executive team
90 Corporate Governance report
98 Nomination Committee report
100
Risk and internal control
102 Audit Committee report
110
134 Directors’ report
139 Directors’ Responsibilities
Directors’ Remuneration report
Financial Statements
141
Independent Auditor’s report to the
members of Computacenter plc
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
Statements
Group five-year financial review
Financial calendar
Corporate information
Principal offices
150
151
152
153
154
155
203
204
205
210
210
211
212
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
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.
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.
Computacenter plc Annual Report and Accounts 2022 | 1
Chair’s statement
UNWAVERING
IN OUR FOCUS
2 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 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
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.
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.
Computacenter plc Annual Report and Accounts 2022 | 3
Chief Executive’s strategic review
HELPING OUR
CUSTOMERS
CHANGE THE
WORLD
We continue to be guided by our
values as an organisation, and
therefore remain resolutely
focused on achieving success
over the long term.
Mike Norris
Chief Executive Officer
4 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Following a very strong fourth quarter,
2022 has proven to be a good year for
Computacenter. The Group achieved an
18th consecutive year of adjusted1 diluted
earnings per share growth. Whilst the
in-year performance was helped by the
currency impact of a strong US dollar, and a
small acquisition in the United States in the
second half of the year, this assistance was
far outweighed by significant headwinds
faced by the business, as the Group and its
stakeholders started to move towards
business as usual and away from practices
adopted to reflect Covid-related restrictions.
The headwinds faced were as a result of two
main factors, which were both Covid-related.
During the pandemic, Computacenter
experienced high availability and high
utilisation of our Services personnel, creating
unsustainably high Services margins. By the
fourth quarter of 2022, Services margins were
broadly in line with pre-Covid levels. However,
the ongoing impact of inflation, which looks
set to continue in the short term within a
number of our core countries, and particularly
in Europe, will make it challenging to maintain
these at their current level through this year.
Additionally, we saw costs return which had
declined during the pandemic, such as those
related to travel. Given these factors, we are
satisfied with the performance in 2022, which
represented continued progress after two
outstanding years in 2020 and 2021.
We continue to operate in accordance with
our values, and therefore remain focused
on our long-term success. In 2023, we will
embark on incremental investment in two
areas which have already seen sustained and
consistent investment by the Group. Staying
ahead of the increasingly challenging cyber
security threat landscape remains a key
focus. We will continue and step up our
investment in the scaling and sophistication
of our global security capabilities, to protect
our customers, systems and services. The
Group also has an ambitious investment
programme to enhance our competitive
position and sustain our long-term
performance. We have started a programme
of significant IT upgrades and enhancements
to our customer-facing systems, our core
processes, and our sales enablement. Whilst
the programme started in the middle of 2022,
this investment will be made over a multi-year
period and should help to provide a platform
for future growth. We also continue to invest
to spread our business geographically,
increase our productivity and broaden the
range and quality of offering we deliver for
our customers.
Whilst we place our customers at the heart of
everything we do, Computacenter is a people
business. We are a highly commercial,
performance-driven company. A hallmark of
our progress over the last 40 years has been
our ability to deal with the unexpected, and to
turn challenge into opportunity. You cannot
do this without great people. I take this
opportunity to thank them, not just for their
continued hard work in 2022, but for the way
that they dealt with all the challenges that
Covid-19 brought, and especially the way in
which they continued to deliver for our
customers during that time.
The Group continues to invest in growing its
employee base, particularly in technical skills,
and our attrition rate remains comparatively
low within our sector. Across the Group,
Computacenter recruited approximately
4,500 new people in 2022, bringing our total
number of employees at the end of the year to
just over 20,000. A particular focus in this area
has been growing our offshore operations in
India where, encouragingly, we have found
significant availability of high-end skills to
meet our customers’ demands around
Services delivery. At the end of 2022, the
number of our employees in India had grown
to over 1,100 people.
Indeed, across Managed Services, regardless
of geographical location, size or type of
business, our customers continue to demand
innovation that reduces their cost base and
enhances the experience of their users. We
remain convinced that this challenge must
be addressed through the development and
increasing sophistication of our systems and
automation, and also through offshoring.
We have also seen demand for technology
from large corporate and public sector
organisations remain buoyant. This has
delivered significant growth in our Technology
Sourcing business. Whilst margins remain
robust in all other geographies, the
outstanding growth in volumes with a certain
North American hyperscaler, at lower-than-
average Group margins, has lowered the
North American, and Group, Technology
Sourcing margin rates overall. The IT industry
supply chain shortages experienced in 2021
continued through the first three quarters of
the year, impacting the Group’s levels of
inventory, use of working capital, and cash
position. Whilst significant delays remain with
networking products, the shortages eased
materially as the year has unfolded. The
amount of inventory that we are carrying
for our customers remains significant but
has started to reduce as supply becomes
more plentiful.
This issue has meant that we have not
generated the level of cash we have come
to expect. However, the improvement made
in the last three months of the year is clear
evidence that we are now trending in the
right direction again, and we are expecting
a significant strengthening of our balance
sheet in the months ahead.
You will find as you read about our Financial
and Operating Performance that this varied
somewhat across our core countries. Our
German business had another year of
excellent growth, and remains the most
profitable in the Group, with a particularly
successful Professional Services business.
The UK business had a challenging year,
which was slightly disappointing, albeit
understandable given that it had benefited
most from pandemic-related business
practices, when compared with the rest of the
Group. UK Government spend was particularly
low during 2022. In France, performance was
again held back by the integration of our
acquisition made in late 2020. However, the
performance of our traditional core business
was encouraging, and we hope to see
continued improvement there in 2023. Our
Belgian business had another successful year,
and we continued to make progress in the
Netherlands. Our Swiss business had a
difficult 12 months.
Our North American business continued to
make significant progress in 2022, building
on that in recent years. We continue to focus
on organic growth and integrating the
acquisitions we have made. We will continue
to look for further opportunities to grow and,
in the event that we identify acquisition
targets which are strategically and culturally
aligned to our business, we will consider these.
As many of you will already know, during the
year we undertook a search to replace Tony
Conophy, our long-term Group Finance
Director, who will be retiring in 2023. This
search has now completed successfully, and
I am pleased that Christian Jehle will join the
Company in June 2023 as Chief Financial
Officer. Let me take this opportunity to thank
Tony for his commitment to Computacenter,
and his unwavering support for me personally,
over the past 28 years. We wish him all the
very best for his upcoming retirement.
We have made a number of other executive
management changes throughout 2022 and
into the early part of 2023. These include new
country leadership in North America, France
and the United Kingdom, as we strengthen our
team to maximise our ability to capitalise on
the investments we are making in our
customer service offerings.
At Computacenter, we are fortunate to have
a customer base which includes some of the
most highly regarded corporate and public
sector organisations in the world. We thank
them for their faith in our Group. Our Purpose
is helping our customers to change the world.
We look forward to the rest of 2023 with
confidence that our culture, people and
investments will enable us to do so.
Mike Norris
Chief Executive Officer
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 5
Who we are
Financial strength and stability
• Listed company since 1998, UK FTSE 250
• Robust balance sheet with a history of positive
adjusted net funds3
• One of the world’s largest value-added resellers (VARs)
of information technology (IT)
• A leading international IT services business
Gross invoiced income (£m)
Services revenue (£m)
Adjusted net funds3 (£m)
9,052.2
1,570.6
244.3
Return on Capital Employed
(Four-year average)
46.1%
Financial track record
• Long-term track record of revenue and profit growth
Gross invoiced income (£m)
Revenue (£m)*
Adjusted1 profit before tax (£m)
Profit before tax (£m)
Adjusted1 diluted EPS (pence)
Diluted EPS (pence)
Dividend per share (pence)
Services revenue (£m)
Operating cash flow (£m)
Return on Capital Employed
Four-year annual compound growth rate
• Highly cash generative
2018
4,352.6
118.2
108.1
75.7
70.1
30.3
1,175.0
115.2
31.1%
2019
5,052.8
146.3
141.0
92.5
89.0
10.1
1,230.6
198.3
42.6%
2020
5,441.3
200.5
206.6
126.4
133.8
50.7
1,261.2
236.9
46.7%
2021
6,923.5
5,034.5
255.6
248.0
165.6
160.9
66.3
1,450.9
224.3
52.2%
2022
9,052.2
6,470.5
263.7
249.0
169.7
159.1
67.9
1,570.6
242.1
42.9%
2022 vs 2021
30.7%
28.5%
3.2%
0.4%
2.5%
(1.1%)
2.4%
8.3%
7.9%
(9.3 pts)
Adjusted1 profit
before tax
22.2%
Adjusted1
diluted EPS
22.4%
Dividend
per share
22.4%
Services
revenue
7.5%
*
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. 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.
Our Winning Together Values
These are the values on which we built this Company and they are the values on which we will continue to grow Computacenter.
We win by
Putting customers first
We work hard to get to know our
customers, understand their needs and put
them at the heart of everything we do. This
lets us use our skills and experience to help
them in the right way at the right time.
Keeping promises
We’re straightforward, open and honest in
all of our dealings. We’re pragmatic and do
our very best to keep our promises. When
that’s difficult, we help our customers find
other ways to solve their problems.
6 | Computacenter plc Annual Report and Accounts 2022
We do it together by
Understanding people matter
We’re committed to being diverse and
inclusive. We build supportive, rewarding
relationships and celebrate success. We’re
proud of the people we work with and we
treat people as we expect them to treat us.
Considering the long term
We’re building a sustainable and efficient
business for the long term. This leads our
decisions and actions and helps people
trust us.
Winning
Together
Our Values
Strategic Report Our Purpose
HELPING OUR CUSTOMERS CHANGE THE WORLD
Our customers are some of the world’s greatest organisations. We work hard to get to know them, understand their needs and put them at the
heart of everything we do. We work relentlessly to build their long-term trust, so they can rely on us in a complex and ever-changing world.
Our business model is based on enabling success by building long-term trust with our customers, our people, our partners, our communities
and our shareholders. In doing so, we leverage our long-term investment in our infrastructure and physical assets and place great confidence
in the depth of our skills and knowledge of our teams.
Our story
1
What we’ve built
We are proud of
what we’ve achieved
• We have earned the trust of some of the
world’s greatest organisations.
• We have built powerful partnerships with
the world’s leading technology vendors.
• We are a responsible business that has
grown in capability, reach and reputation.
• Together, we have created a can-do culture
where people matter and are encouraged to thrive.
2
Our programmes of change
But we must be
even better
• We must work relentlessly for and with
our customers so that we win, grow and
succeed together.
• We must drive greater efficiency in how we work,
and leverage our scale to benefit customers.
• We must execute with pace by empowering our people
to meet customer needs faster.
• We must uphold consistently high standards, so that our
customers can always trust and rely on us.
3
Our strategic priorities
By being focused and
confident in what we do
• We retain and maximise the relationships
with our large corporate and public sector
customers over the long term.
• We build unrivalled value for our target market customers
by combining our service and product capabilities.
• We lead with and grow our Services.
• We improve our productivity and enhance
our competitiveness by leveraging our
scale and building efficiencies.
4
Winning Together
And staying true to our
values and principles
• We win by putting customers first and
keeping our promises.
• We do it together by understanding that
people matter and considering the long term.
• We believe in delivering positive social
impact with a focus on our people.
• We take a responsible approach
across our operations, including our
environmental impact.
5
How we help customers
Enabling success by
building long-term trust
• We always seek to understand what
success means for our customers.
• We harness our independence, experience
and scale.
• We adapt to meet the specific needs
of each customer.
• Our customers can rely on us in a
complex and ever-changing world.
6
Our Purpose and Ambitions
Helping our customers
change the world
• Our customers will strongly recommend
us for the way we help them achieve their goals.
• We will 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 will be a trusted, agile and innovative provider
of technology and services across the world.
Computacenter plc Annual Report and Accounts 2022 | 7
Who we are continued
Our growth and development
Founded
1981
Successful flotation
on the London Stock
Exchange
1998
Acquisition of
GE CompuNet
in Germany
2003
Group
Operating Model
introduced
2012
Acquisition of Pivot
in United States
and Canada
2020
20,000
people
2022
1994
Largest UK
privately owned
IT company
2001
Opening of Europe’s largest
Integration Center in
Hatfield, United Kingdom
2005 – 2016
Development of
global Managed
Service capabilities
2018
Acquisition of
FusionStorm in
United States
2021
YE
A
R
S
1981-2021
Diversified across markets and technology areas
We have a strong presence across the largest IT markets in
Europe and North America.
We have strength in multiple key technology areas.
Gross profit by Segments
Technology Sourcing gross invoiced income by technology area
5
1
4
3
1. United Kingdom: 27.4%
2. Germany: 34.3%
3. France: 8.1%
4. North America: 25.2%
5. International: 5.0%
2
1
2
3
1. Workplace: 42%
2. Apps, Cloud & Data Center: 25%
3. Networking & Security: 33%
Market-leading international coverage
We have what we believe to be the best international capability of any VAR in the world.
This allows us to help customers to deploy and support IT standards consistently worldwide.
We Source, Transform and
Manage technology for our
customers in over 70 countries
worldwide
We sell to customers in
eight countries
Belgium | Canada | France
Germany | Netherlands
Switzerland | United Kingdom
United States
We have nearshore and
offshore operations in
another eight countries
We have support operations
in another seven countries/
territories
Hungary | India | Malaysia
Mexico | Poland | Romania
South Africa | Spain
Australia | Brazil | China
Hong Kong (SAR) | Ireland
Japan | Singapore
MARKHAM, ON, CANADA
INDIANAPOLIS, IN, US
BUFFALO GROVE, IL, US
SAN FRANCISCO, CA, US
LIVERMORE, CA, US
DALLAS, TX, US
MEXICO CITY, MEXICO
ATLANTA, GA, US
ALPHARETTA, GA, US
MOORDRECHT, NETHERLANDS
POZNAN, POLAND
BRUSSELS, BELGIUM
MARKHAM, ON, CANADA
HATFIELD, MILTON KEYNES,
NOTTINGHAM, SHEFFIELD, UK
INDIANAPOLIS, IN, US
BUFFALO GROVE, IL, US
HATFIELD, BRAINTREE, UK
SAN FRANCISCO, CA, US
HATFIELD, UK, EMEA
LIVERMORE, CA, US
BARCELONA, SPAIN
DALLAS, TX, US
GONESSE, PARIS, FRANCE
MEXICO CITY, MEXICO
BODEGRAVEN, NETHERLANDS
BRUSSELS, BELGIUM
HATFIELD, MILTON KEYNES,
NOTTINGHAM, SHEFFIELD, UK
HATFIELD, BRAINTREE, UK
HATFIELD, UK, EMEA
BARCELONA, SPAIN
GONESSE, PARIS, FRANCE
LYON, MONTPELLIER,
PARIS, PERPIGNAN, FRANCE
LYON, MONTPELLIER,
PARIS, PERPIGNAN, FRANCE
ATLANTA, GA, US
ALPHARETTA, GA, US
CLUJ, ROMANIA
BUDAPEST, HUNGARY
BERLIN, DRESDEN, ERFURT,
KERPEN, GERMANY
KERPEN, GERMANY
CAPE TOWN, SOUTH AFRICA
ZURICH, SWITZERLAND
POZNAN, POLAND
BANGALORE, INDIA
BANGALORE, INDIA
CLUJ, ROMANIA
BANGALORE, INDIA
BUDAPEST, HUNGARY
KUALA LUMPUR, MALAYSIA
BERLIN, DRESDEN, ERFURT,
KERPEN, GERMANY
KUALA LUMPUR, MALAYSIA, APAC
KERPEN, GERMANY
CAPE TOWN, SOUTH AFRICA
ZURICH, SWITZERLAND
BANGALORE, INDIA
BANGALORE, INDIA
BANGALORE, INDIA
KUALA LUMPUR, MALAYSIA
KUALA LUMPUR, MALAYSIA, APAC
SERVICE CENTERS
INTEGRATION CENTERS
PROFESSIONAL SERVICES DELIVERY CENTERS
COMPUTACENTER’S COVERAGE
REGIONAL HEADQUARTERS
8 | Computacenter plc Annual Report and Accounts 2022
SERVICE CENTERS
INTEGRATION CENTERS
PROFESSIONAL SERVICES DELIVERY CENTERS
COMPUTACENTER’S COVERAGE
REGIONAL HEADQUARTERS
Strategic Report Powerful partnerships
We have built powerful partnerships with the world’s leading
technology vendors, who can rely on our reach and scale. We are
among the top five partners in EMEA for most of the major
technology vendors and are increasingly recognised for our
achievements at a global level. Despite only recently entering the
large United States market, we are already among the top five
partners globally for many of the major technology vendors.
The increasing pace of technological change and the diversity
of the technology landscape has made our technology vendor
independence more critical to our customers. We are trusted to
provide impartial and knowledgeable advice and to integrate
solutions comprising products from multiple technology vendors.
Services breadth and scale
We have the largest service capability of any value-added reseller
in the world, with 13,400 billable people helping our customers.
This allows us to support our customers to transform and manage
their digital technology at scale, in addition to our Technology
Sourcing activities. Additionally, our Services scale provides our
business with better resilience, as well as access to broader
growth opportunities.
The breadth and depth of our technology vendor partnerships
allows us to help our customers navigate the complexity and speed
of change in the current market. Our expertise in our technology
vendors’ solutions is significant, with our people holding more than
12,000 technical certifications.
5,000
5,000
Service Center agents
Engineers and Technicians
1,800
Project, Service and
Delivery Managers
1,600
Consultants
Workplace
Apps, Cloud &
Data Center
Networking
& Security
Source
Transform
Manage
Market-leading scale infrastructure
We have invested over many years to build market-leading scale
infrastructure, to meet the demanding requirements of our
customers. We continue to invest for the long term.
Facilities
Our Integration Centers are among the largest and most capable in
each of our markets, providing customers with the capability to
deploy technology at scale. Our international Service Centers
provide support for our customers’ IT infrastructure and users
24 hours a day, seven days a week. They can operate independently
or as a group, to provide both capability and resilience as part of
our Services business.
Systems
The systems underpinning our operations provide flexibility for
our customers. They have to be secure to protect both us and our
customers, while supporting us to meet service level agreements
through automation and innovation. We continue to invest in
improving our platforms to provide improved customer service,
efficiency and innovation, using technology from SAP, Salesforce
and ServiceNow.
Standards and certifications
ISO 20000-1, ISO 27001, ISO 14001, ISO 45001, ISO 9001
Customer focus and longevity
Our focus is to build long-term relationships with our customers
in our target market of the largest corporate and public sector
organisations. We earn incredible long-term customer loyalty,
which underpins our growth and development, while investing in
building value to win new customers. Of our 187 customers with
greater than £1 million gross profit in 2022, 48 per cent have
provided above this level of gross profit for five years or more.
Customer longevity – based on customers with greater than
£1 million of gross profit in 2022
1. Over 10 years: 41 (22%)
2. 5 years – 10 years: 49 (26%)
3. Under 5 years: 97 (52%)
2
1
3
Our focus on the largest organisations in each of our markets
gives us a diversified and high-quality corporate and public sector
customer base, making the Group more resilient.
Total gross invoiced income by customer sector – based on
customers with greater than £1 million of gross profit in 2022
1
4
2
3
1. Industrial, retail and
consumer: 29%
2. Public sector, education and
healthcare: 27%
3. Financial services, banking,
insurance and professional
services: 25%
4. Telecoms, media and
technology: 19%
Computacenter plc Annual Report and Accounts 2022 | 9
Who we are continued
OUR
CUSTOMERS
Our Purpose is helping our customers change the world.
Our customers are some of the world’s greatest organisations. We work hard to get to know them,
understand their needs and put them at the heart of everything we do. We work relentlessly to build
their long-term trust so that they can rely on us in a complex and ever-changing world.
This selection of stories is from customers within our target market of the largest corporate and
public sector organisations. They illustrate the significant trust that our customers place in
Computacenter and the skills and experience of our people.
Computacenter always provides fast and efficient support to all
our members, in order to offer them virtualisation solutions
adapted to their critical environments.
Computacenter have been our technology partner for so long,
they now feel like an extension of our team. They have always
provided a consistent level of expertise, service and attention
as our company has quickly scaled over the years.
Hervé GRANDJEAN
C.A.I.H
Doug Zeman
Personalis
We have a massive agenda around Digital, and therefore it is
essential that we have really strong strategic partnerships and
strategic relationships.
Vikki Lewis
Worcestershire Acute Hospitals NHS Trust
The long-standing partnership with Computacenter and the
familiarity of its team have led to a considerable increase in
efficiency in our telephony project. Very well trained and
experienced experts were engaged on both sides. It is helpful to
have people on both sides who understand each other.
Thorsten Traupe, Sennheiser
10 | Computacenter plc Annual Report and Accounts 2022
Strategic Report We are pleased with our cooperation with Computacenter and
the solution offers even more capacity for data growth or other
database systems than we originally assumed.
As a business, we have not flinched or shied away, and have
moved mountains to keep our services going. Our response is
publicly acknowledged as being phenomenal and DWP Digital has
played a major part.
Andreas Biesenbach
Ferdinand Bilstein GmbH + Co. KG
Kenny Robertson
DWP Digital
Thank you to Computacenter for its unwavering and professional
support over many years to all Caisse des Dépôts teams, in the
service of the French public interest!
We already achieved employee satisfaction of 98 per cent in
the proof of concept, which is a result of our cooperation with
Computacenter and makes us all very optimistic.
Philippe Jeanneau
CDC Informatique
Stefan Wöhlken
TELCAT MULTICOM
Computacenter has created a highly dynamic working
environment, which is flexible and agile in the meeting rooms and
workplaces. In addition to the design concept, Computacenter
took care of the delivery, set-up and support for the media
equipment, to our absolute satisfaction.
Computacenter partnered with us to implement our digital asset
management system. They were able to identify some of the
challenges that we had not foreseen and were flexible in helping
us implement some adjustments to our processes.
Steffen Löber, GASAG AG
Sylvain Belanger
Library and Archives Canada
Computacenter plc Annual Report and Accounts 2022 | 11
Who we are continued
OUR
PEOPLE
Our business is about technology. But first of all, it’s about people.
We are a service company and our customers depend on us to underpin their own businesses. We could
not be effective without the extraordinary commitment and hard work of our people. We now employ over
20,000 people across 23 countries. Together, we’ve created a ‘can-do’ culture where people matter and are
encouraged to thrive. We work hard to maintain our culture and to attract, develop and reward talent.
Our global recognition platform, ‘Bravo!’ allows our people from across the business to say ‘thank you’ and
recognise each other for their contribution to our customers, our business and to each other. In mid-2021,
we launched our ‘Bravo Stars’ programme which allows people to nominate their peers for bronze and
silver awards which carry a higher number of Bravo! points. During 2022 we issued 168 bronze awards and
211 silver awards, across 13 countries. From the silver award winners, 29 people were further nominated
for a gold award. Our global panel assessed all nominations and voted for our 16 final winners. Here are a
few of our gold award winners and what they were recognised for.
Although Linda’s role is internally facing, she stepped up when
our healthcare customer needed support. Through careful
engagement she made sure she understood the project vision,
mission and value proposition, and produced the all-important
branding, designs and messaging for a new hub for technology
innovators, to enhance how care is delivered long term.
During the depths of the pandemic, Phil put our customer first.
When others were working from home, he stayed in hotels to be
close to the customer’s site. Through his diligence, he ensured our
customer received excellent service, so their users could carry on
working productively.
Linda Massey
Senior Graphic Designer, United Kingdom
Phil Jones
Senior Project Manager, United Kingdom
Srinath was instrumental in setting up our Windows patching
team in India and building links with our global team. He has found
ways to dramatically speed up and broaden the team’s work, and
with his strong sense of ownership and constant searching for
ways to outperform, he always delivers to the highest quality.
Sophie has played a fundamental role in integrating the CCNS
acquisition into Computacenter France, while still performing
her day-to-day role. Her outstanding impact, communication,
performance and empathy, and her dedication to her team and
the wider organisation, helped make the project a success.
Srinath Velma
Associate Manager, India
Sophie Guillon
Back Office Manager, France
12 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Delphine has demonstrated our value of putting customers first.
She showed great dedication in managing a new customer, as well
as her regular customer portfolio. Her perseverance helped us
develop a strong customer relationship and grow our business
with them.
When two of his three team members changed, Asghar kept the
Computacenter flag flying by ensuring the customer continued
to receive a high-quality service, taking on all the high-skill,
planning and organisational issues and even postponing his
holiday, while his new colleagues successfully bedded in to
the team.
Delphine Henno
Senior Customer Executive, France
Asghar Shabani
System Engineer, Germany
Richard is a highly respected member of the team, who has gone
well beyond his core role to support a customer with a complex
and sensitive issue. In the process, he has become a trusted
advisor and demonstrated his commitment to putting the
customer first.
Nicole’s extraordinary performance helped to keep people safe at
the peak of the pandemic. New rules meant around 3,000 people
entering our workplaces had to be checked daily for Covid
symptoms. While still doing her regular job, Nicole and her team
rapidly organised and managed this, complying with the law,
keeping our business running and protecting people from illness.
Richard Ibbotson
Consultant, United Kingdom
Nicole Sondermeyer
Personal Assistant, Germany
Helen went above and beyond in supporting the United States
business through its ERP programme. While away from home for
long periods, she demonstrated our Winning Together Values
throughout, working hard to minimise customer impact while
educating our teams, to ensure she left a positive legacy.
When our customer had an urgent need, Jonathan came
through. While handling his regular shifts, he showed flexibility
outside of his regular working hours to relocate the customer’s
equipment, to meet time-critical deliverables. Jonathan’s
positive attitude and focus on quality mean we remain a trusted
provider and the customer’s senior executives recognised
his success.
Helen Richardson
Operations Manager, United Kingdom
Jonathan Murphy
Senior Customer Engineer, United States
Computacenter plc Annual Report and Accounts 2022 | 13
What we do
Our integrated business portfolio
Computacenter’s strategy is centred on the specific needs of our target market of the largest
corporate and public sector organisations in each of the eight countries in which we sell. Our
focus is to build long-term relationships which earn customer loyalty and underpin our growth
and development, while investing in building value to deepen existing customer relationships
and develop new ones. We help our customers to Source, Transform and Manage their technology
infrastructure to deliver digital transformation, enabling people and their business.
Computacenter has an integrated offering, which provides three complementary entry points
for our customers, helping us to achieve sustained long-term growth. The three parts of our
portfolio are: Technology Sourcing (Source), Professional Services (Transform) and Managed
Services (Manage). We are unusual in the market in building strength in depth across all three
parts of the portfolio.
We gain new customers through Technology Sourcing, Professional Services and Managed
Services individually. However, we have greater longevity in customer relationships when we
work across all three parts of the portfolio.
SOURCE
CIO
PEOPLE
BUSINESS
MANAGE
TRANSFORM
Source
Transform
Manage
Technology Sourcing
We help our customers to determine their
technology needs and, supported by our
technology vendors, we arrange the
commercial structures, integration and
supply chain services to meet them
reliably. We earn revenue from large
contracts, with thinner margins and
lower visibility.
Professional Services
We provide structured solutions and
expert resources to help our customers
to select, deploy and integrate digital
technology, to achieve their business
goals. Our revenue depends on our forward
order book, which contains a multitude of
short-, medium- and long-term projects.
Managed Services
We maintain and manage user support
and digital operations for our customers,
to improve quality and flexibility while
reducing costs. Our revenue under
contract has high visibility and is long term
and stable.
Gross invoiced income (£m)
+36.7%
Revenue (£m)
+15.2%
Revenue (£m)
+4.0%
636.6
2022
2021
2020
2019
2018
636.6
552.4
425.4
366.1
321.9
934.0
2022
2021
2020
2019
2018
934.0
898.5
835.8
864.5
853.1
7,481.6
2022
2021
2020
2019
2018
4,180.1
3,822.2
3,177.6
Revenue (£m)
4,899.9
7,481.6
5,472.6
+36.7%
2022
2021
4,899.9
3,583.6
14 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Our Integration
Centers
Technology Sourcing
Alpharetta, Georgia
Technology Sourcing is our traditional core business and we continue to see it as both
fundamental to our customers and a significant growth driver. We help our customers to
determine their technology needs and, supported by our technology vendors, we provide the
commercial structures, configuration and supply chain services to meet these needs reliably.
We earn revenue from large contracts, with thinner margins and lower visibility than for
Services, but with amazing customer loyalty, which we earn through reliability, agility and scale.
We provide our customers with huge flexibility, adapting our processes to fit their quotation,
order management, shipment, receipt and documentation requirements, which are often very
specific. This flexibility comes from our significant long-term investment in our people, systems
and Integration Centers. Our Technology Sourcing services range from pre-configuration of all
types of technology to end-of-use management. Our customers value our ability to support
them across the entire hardware and software lifecycle, and to act as a partner who can deliver
at scale and, increasingly, globally.
Braintree, United Kingdom
2022 highlights include:
Buffalo Grove, Illinois
Gonesse, France
Hatfield, United Kingdom
Kerpen, Germany
Livermore, California
Moordrecht, Netherlands
• Expansion of our Integration Center in Kerpen, Germany, by a further 20,000m2 to increase
Germany capacity to 49,000m2 and support our growth.
• Building commenced on a new 2,300m2 Integration Center in Moordrecht, Netherlands,
to replace our existing facility nearby.
• Expansion of our capacity in the United States with a new 6,800m2 Integration Center
near Indianapolis, Indiana, close to key Mid-West customers and a larger facility in
Washington State.
• Continued work with technology vendors to minimise the impact of supply chain shortages
for our customers. The issues have led to increased inventory but we have seen the number
of issues reduce and expect substantial easing by the end of 2023.
• Deployed the first phase of new generation Salesforce Configure Price Quote (CPQ) systems
which will, over time, enable all our customer-facing Technology Sourcing teams globally.
• Development of Rapid Data Center Deployment solution underpinned by our Hyperscale
Cloud Automation Platform (HCAP), allowing customers to deploy data center racks with
greater consistency and transparency.
• VMware Partner Industry Award, EMEA.
• Hewlett Packard Enterprise Partner of the Year, United States.
• Fourteen awards from Cisco across every Computacenter Country Unit.
• Microsoft Worldwide Surface Customer Obsessed Partner of the Year.
• NetApp Data Center Transformation Partner of the Year, Germany.
• Grew to become one of Dell Technologies’ largest partners worldwide.
SOURCE
Procurement and logistical services
Configuration, lifecycle and circular services
12 million
items supplied
1.5 million
items configured
in our Integration
Centers
3,000
technology
vendors
Computacenter plc Annual Report and Accounts 2022 | 15
CIOPEOPLEBUSINESSTRANSFORMMANAGE What we do continued
Our Professional Services
Delivery Centers
Professional Services
Cluj, Romania
Bangalore, India
Our people
We provide structured solutions and expert resources to help our customers select, deploy and
integrate technology, so they can achieve their business goals. Our revenue depends on our
forward order book, which contains a multitude of short-, medium- and long-term projects.
As the technology landscape has become more complex, our 1,600 consultants play an
increasingly important role in advising our customers. Our Professional Services and Technology
Sourcing businesses have always been linked and we see this increasing, as our customers
need our help to make wise choices in the complex technology landscape and to then deploy
and integrate these technologies.
Our Professional Services revenue also reflects some of our 5,000 engineers and 750 project
managers, who are charged as part of customer integration and deployment projects.
These engagements range from workplace rollouts to complex network and data center
solution integrations.
Our Professional Services business continues to be a major source of Services growth,
as customers look to us for help to deploy new digital technology.
2022 highlights include:
• Deployed the first phase of our new Resource Request Transformation system, which
will provide our teams with a global view of Professional Services resource, skills and
availability, allowing us to engage the right skills at the right time more efficiently.
• Started development of our new Professional Services framework, Technique, which will
provide a standard best-practice approach to underpin our various Professional Services
activities and improve predictability and competitiveness for our customers.
• Grew our offshore Professional Services Delivery Center in Bangalore, India, to over
100 consultants, engineers and project managers, covering workplace, networking and
cloud services.
• Grew our nearshore Professional Services Delivery Center in Cluj, Romania, to over
100 people, providing application development and cloud transformation services.
IT strategy and advisory services
TRANSFORM
Integration, deployment and support services
1.4 million+
billed consultancy
hours
6.5 million
billed engineering
hours
1,900
completed
projects
Technique
16 | Computacenter plc Annual Report and Accounts 2022
CIOPEOPLEBUSINESSSOURCEMANAGEStrategic Report Our Service
Centers
Managed Services
Bangalore, India
Barcelona, Spain
We maintain, support and manage IT infrastructure and operations for our customers, to
improve quality and flexibility while reducing costs. Despite competitive pricing in the market,
our revenue under contract has high visibility, is long term and stable. We see this recurring
income as a strategic means of balancing our business, as well as being essential to our Source,
Transform and Manage customer offerings.
Customers ask us to reduce their costs by managing some of their support operations, as well
as taking end-to-end responsibility for sourcing, deploying, transforming and then providing the
ongoing managed support of digital projects.
We have continued to improve the predictability of our Managed Services, to the benefit of our
customers and our own business. As our customers’ businesses continue to evolve and face
new challenges, we will continue to adapt our offerings to remain relevant and competitive.
We see significant opportunities to add value to our customers.
Our Service Centers are the core of our Managed Services capability and we continue to invest in
improving and updating the technology underpinning them.
Berlin, Germany
2022 highlights include:
Budapest, Hungary
Cape Town, South Africa
Dallas, Texas
Kuala Lumpur, Malaysia
Mexico City, Mexico
Milton Keynes, United Kingdom
Montpellier, France
• Total India Managed Services headcount exceeded 1,000 as we continue to grow our
offshore capability.
• 26 Managed Services contract go lives.
• Service Desk Institute Large Service Desk of the Year 2022.
• Service Desk Institute Service Resilience Award 2022 (Covid response).
• First successful customer wins using our new Modernising Workplace services capability,
supporting customer users with hybrid working and managed lifecycle services.
• Commenced IT Service Management (ITSM) systems replacement programme, centred
on ServiceNow.
• Acquired Emerge 360’s engineering operations in India, Japan, Singapore, Hong Kong and
Australia, to provide better coverage and ownership for international customers in the
India and APAC regions.
Maintenance, field and managed lifecycle services
MANAGE
Remote user support and digital operations
3.7 million
devices supported
under service level
agreements
3.6 million
incidents and
requests
managed
688 million
automated tasks
completed
Computacenter plc Annual Report and Accounts 2022 | 17
CIOPEOPLEBUSINESSSOURCETRANSFORM How we build sustainable value
Our approach to the market
Our Purpose
Computacenter is a leading independent
technology and services provider, trusted
by large corporate and public sector
organisations. We help our customers to
Source, Transform and Manage their
technology infrastructure to deliver digital
transformation, enabling people and
their business.
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 strategy
Computacenter’s strategy is centred on the
specific needs of our target market of the
largest corporate and public sector
organisations in each of the eight countries in
which we sell. Our focus is to build long-term
relationships which earn customer loyalty and
underpin our growth and development, while
investing in building value to deepen existing
customer relationships and build new ones.
We help our customers to Source, Transform
and Manage their technology infrastructure to
deliver digital transformation, enabling people
and their business.
Computacenter has an integrated offering,
which provides three complementary entry
points for our customers, giving us a balanced
business portfolio and helping us to achieve
sustained long-term growth. The three parts
of our portfolio are: Technology Sourcing
(Source), Professional Services (Transform)
and Managed Services (Manage). We are
unusual in the market in building strength in
depth across all three parts of the portfolio.
We gain new customers through each of
Technology Sourcing, Professional Services
and Managed Services. However, we have
greater longevity in customer relationships
when we are working across all three parts
of the portfolio.
Our value-added reseller (VAR) capability
places us as one of the six largest VARs by
gross invoiced income in the world and the
largest headquartered outside the United
States. We have the largest Services business,
and have built what we believe to be the best
international capability, of any VAR in the
world. We compete with VARs and offer
value-add to both customers and technology
vendors through our Services, compared
to buying directly through individual
technology vendors.
By growing our Services, we aim to build value
for our customers and technology vendors,
in addition to scale competitiveness in the
countries in which we sell to customers.
We compete in Services with VARs, and small
service companies through breadth and
scale, as well as Systems Integrators (SIs)
who do not have competitive Technology
Sourcing capability.
Our target market customers require us to
offer significant flexibility to meet their
specific needs, while also being competitive
in each part of our portfolio. We achieve this
through a scalable operating model that
delivers economic advantage in our
integrated portfolio.
Our strategic priorities support our strategy:
• 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; and
• Productivity: improve our productivity and
enhance our competitiveness by leveraging
our scale and building efficiencies.
Our business model
Our business model aims to leverage
our resources to create value for our
stakeholders. We organise into three mutually
supporting groups: Sales & Customer
Engagement (Country Units), Service Lines
and Business Services.
Sales & Customer Engagement
Our target market is the largest corporate and
public sector organisations in each of the
eight countries in which we sell. This target
market demands significant flexibility in how
they receive services. Our business model
supports this through having account
managers, and service and solution
specialists, aligned to our customers who
18 | Computacenter plc Annual Report and Accounts 2022
build strong customer intimacy and, over
time, referenceability. We empower our Sales
and Customer Engagement teams to make
responsible decisions that meet the
demanding needs of our customers faster.
They work hard to get to know our customers,
understand their needs and put them at the
heart of everything we do.
Service Lines
Our strategy involves building depth and scale
in our chosen activities in each of the three
parts of our portfolio: Technology Sourcing
(Source), Professional Services (Transform)
and Managed Services (Manage).
Our Service Lines allow us to leverage
capabilities to meet customer needs
efficiently and consistently across each major
part of our portfolio and, over time, to build
increased economic advantage in our scale
fields of activity.
To achieve this we need to continue to build
and leverage our resources:
• The depth of skills and experience of our
over 20,000 people;
• Digital technology from our technology
vendors, brought to market through
powerful partnerships with them;
• Our brand and reputation, built on the
achievement of long-term trust with our
customers;
• Our financial strength and stability, allowing
us to invest for the long term but also be a
reliable long-term partner for our customers
and other stakeholders; and
• Our market-leading scale infrastructure
and physical assets, which underpin
our ability to operate at scale, globally
and efficiently.
Business Services
Our Business Services functions provide the
underpinning business framework to maximise
leverage, efficiency and compliance across
the Group.
These functions enable the Sales & Customer
Engagement and Service Lines teams to focus
on customer success and operational
effectiveness, while ensuring that we operate
the business underpinned by our values and
principles. These are: Finance, Information
Services, Marketing, Legal, People, Strategy
and Governance.
Strategic Report Market trends
Our target market of large corporate and
public sector organisations is facing the
challenge of responding to the pace of
business change, a fast-evolving IT landscape
and unpredictable external factors, such as
the impacts of the global pandemic and the
war in Ukraine.
At Computacenter, we do not change the
world ourselves, we enable success for
our customers so they can realise the
transformative benefits of IT for their
organisations, people, and the world.
To do this, we help our customers to
understand and evaluate the fast-changing
technology landscape but we do not need to
invest materially in the latest technology
trends. Rather, our investment focus is on
those technology trends that, through our
customer and technology vendor feedback,
are emerging to become established at scale.
Based on discussions with our customers and
supported by feedback from market research
organisations such as Gartner, we have
identified and invested in the following trends.
Agility
Our customers will continue to increase their
spending on IT in the years ahead to build
both greater agility and resilience in their
businesses and to bring new capabilities to
market for their own customers. This involves
many of our customers deploying more
standardised infrastructure at scale globally,
to allow them to leverage hybrid and
multi-cloud platforms for application delivery.
Our investments include:
• Expansion of our Sales & Customer
Engagement capability, supported by
improved CRM systems and the acquisition
of BITS in the United States.
• Improved access to consultancy skills to
advise customers through Professional
Services Delivery Centers in India and
Romania and our Resource Request
Transformation system for resource
availability.
• Improved standards across all our activities
ranging from our new Professional Services
framework, Technique, to investments in our
Integration Centers to allow standardised
deployments of different technologies.
Resilience
Our customers need to invest to meet
increasing threats in cyber security and
to meet regulatory requirements.
Our investments include:
• Significant investment in our own network
and security infrastructure, to secure
ourselves and therefore customers who
both connect to us and rely on our Services.
• Embedding improved security within our
core Managed Services offerings.
• Expansion of our security go-to-market
capabilities across our portfolio.
People experience
Our customers are expecting different forms
of delivery and greater innovation to support
their business users in a hybrid working
environment, while remaining secure.
Our investments include:
• Modernising Workplace programme to
enable and support customer hybrid
working and lifecycle services.
• Our Device as a Service proposition.
• Our new IT Service Management (ITSM)
systems to enable greater responsiveness
and flexibility.
Value from IT
Our customers seek to maximise the value
they achieve from their existing IT
environments and from new investments
in technology and services.
Our investments include:
• Investments in our underpinning systems
infrastructure to provide greater global
standardisation and scalability, as well as
improved ability to support software and
technology vendor ‘as a service’ offerings.
• Continued investment in optimising and
standardising our market-leading scale
infrastructure, which underpins our ability
to operate at scale, globally and efficiently.
• Development of skills in our Sales &
Customer Engagement and Service Lines
to enable information-driven decision-
making and business case achievement
for our customers.
Sustainability and achieving Net Zero
We have been committed for many years
to a responsible Environmental, Social and
Governance (ESG) approach, ‘Winning
Together for our People and our Planet’, which
underpins Our Purpose. We recognise that the
long-term future of our company, our people
and our planet relies on an enduring
commitment to sustainability.
This is becoming an important factor in
strategic decision-making for our customers.
Customers want to do business with responsible
suppliers who have the same level of
commitment to sustainability as themselves.
Our investments include:
• Continued focus on our own Sustainability
strategy and reduced carbon footprint
through, for example, our solar generation
investments.
• Development and expansion of our Circular
Services capabilities.
• Alignment with recognised standards and
frameworks bodies that measure and
articulate our Sustainability strategy.
Market share
We will continue to invest and innovate to be
the best that we can be and to secure the
long-term trust of our customers, but also
to gain increased market share. We see
significant opportunities to grow our market
share in the countries in which we sell over
the coming years, from the relatively small
share today.
Total IT market
in Computacenter
Sales countries
~£1,497bna
Computacenter
current
addressable market:
~£779bna,b
Computacenter
gross invoiced
income:
£9bna
2023-2026 CAGR current addressable market : 8.61%a,b
a. Source: Gartner & Computacenter
b. Computacenter target market of large corporate
and public sector organisations
Computacenter plc Annual Report and Accounts 2022 | 19
How we build sustainable value continued
Our business model
Our business model aims to leverage our scale and resources to create value for our stakeholders. We organise into three mutually
supporting groups: Sales & Customer Engagement, Service Lines and Business Services.
The skills and
experience of our people
Digital technology from
our technology vendors
Brand and
reputation
Financial strength
and stability
Infrastructure
and physical assets
OUR RESOURCES
Our Sales & Customer Engagement teams work hard to get to know our customers,
understand their needs and put them at the heart of everything we do.
SALES & CUSTOMER ENGAGEMENT (COUNTRY UNITS)
Customer advocacy
Propositions
Target market
Vendor independence
Our Service Lines allow us to leverage scalable capabilities to meet customer
needs efficiently and consistently across each major part of our business.
SERVICE LINES
TECHNOLOGY SOURCING
PROFESSIONAL SERVICES
MANAGED SERVICES
Powerful partnerships
Professional Services
Delivery Centers
Service Centers
Integration Centers
Breadth of skills
Systems and automation
Our Business Services functions provide the underpinning business framework
to maximise leverage, efficiency and compliance across the Group.
BUSINESS SERVICES
FINANCE
INFORMATION SERVICES
MARKETING
LEGAL
PEOPLE
STRATEGY
GOVERNANCE
Delivery quality
Our Values
Our Purpose
Responsible business
Reliable infrastructure
Worldwide reach
Financial strength
Sustainability strategy
CREATING VALUE FOR ALL OUR STAKEHOLDERS
Customers
People
Partners
Communities
Shareholders
20 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Our investments
Computacenter’s long-term investments in systems and infrastructure have positioned us as a trusted partner for large corporate and
public sector organisations needing to deploy technology at scale. In 2022, we have continued to invest in our capabilities. Set out below
are a number of our investments, which support and are aligned to our business model.
First phase of new
Salesforce CRM system
deployed with 1,400
users to improve
management of
customer opportunities.
Continued enhancement
throughout 2023.
Global extension of our
Network Lifecycle
proposition underpinned
by our SmartHub
platform allows
customers to manage
and optimise their
network assets.
SALES & CUSTOMER ENGAGEMENT
Expansion of sales
headcount in United
Kingdom, Germany and
France to support
growth.
Acquisition of Business
IT Source (BITS)
strengthens
Computacenter in the
Mid-West United States.
SmartHub
Development of Rapid
Data Center Deployment
proposition underpinned
by our HCAP platform
allows customers to
deploy data center racks
with greater consistency
and transparency.
HCAP
First customer deployment
of new Device as a Service
proposition underpinned by
our SmartHub platform,
supporting customers in
both hybrid working and to
meet sustainability goals.
TECHNOLOGY SOURCING
PROFESSIONAL SERVICES
MANAGED SERVICES
SERVICE LINES
Integration Center
investments: greater
scale in Kerpen,
Germany, new facilities
in Moordrecht, NL and
Indianapolis, US.
New Salesforce
Configure Price Quote
(CPQ) systems will
enable all our
customer-facing
Technology Sourcing
teams globally.
Our TechSource
e-commerce platform
has grown to support
over 150 customers.
Go-live of solar farm in
Livermore, California,
as we continue to
invest in our
Sustainability strategy.
New Resource Request
Transformation system
will provide our teams
with a global view of
Professional Services
resources’ skills and
availability.
Growth of Professional
Services Delivery
Centers in Bangalore,
India, and Cluj, Romania,
support our long-term
access to skills and
competitiveness.
New Professional
Services framework,
Technique, provides a
standard best practice
approach to underpin our
various Professional
Services activities.
BUSINESS SERVICES
Significant investment in
network and security
infrastructure globally
to support hybrid
working and help to
secure ourselves and
our customers.
Modernising
Workplace programme
uses new systems and
organisation to enable
support for customer
hybrid working and
lifecycle services.
Commenced IT Service
Management (ITSM)
systems replacement
programme, centred
on ServiceNow.
Acquisition of
engineering services
in India and APAC
improves coverage
in these regions.
Continued investment in
our long-term SAP ERP
upgrade programme
which underpins our
operations.
Computacenter plc Annual Report and Accounts 2022 | 21
How we build sustainable value continued
Our strategic priorities
The measures set out below address what we believe to be the key drivers of successfully delivering our strategy. They also represent our
non-financial Key Performance Indicators.
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
Number of customer accounts with gross
profit of over £1 million
+10.7%
Percentage of target market customers with Technology
Sourcing revenue of over £1 million and Services revenue over
£0.5 million
187
2022
2021
2020
2019
2018
187
169
159
132
117
46
2022
2021
2020
2019
2018
46
50
48
48
53
Computacenter is focused on securing, growing and maintaining
our relationships with large corporate and public sector
customers. While our customers who contribute more than
£1 million of gross margin are not all of equal strategic importance,
their overall number is a key driver of our profitability. We focus on
understanding why customers have exceeded or dropped below
this £1 million threshold, and the extent to which this correlates
with and is driven by our quality of service, or wider market trends
which are outside of our control.
We finished 2022 with 187 of these customers, up by 10.7 per cent
on the previous year. With the exception of one customer gained
through acquisition, this increase was solely due to organic
growth, primarily in Germany, where we continue to see the benefit
of the maturity and scale of our business model, and in the United
States, where we continue to invest in pursuit of significant
market opportunity.
Computacenter invests heavily across both North America and
Western Europe to grow our customer base and take share of
spend within those customers. Whilst this metric is, to some
extent, impacted by the investment capability of our customers
and overall market confidence, alongside the quality of our
offering and effectiveness of our delivery, we aspire to grow the
number of our customers who contribute more than £1 million of
gross margin by around 10 per cent in 2023.
How we define customer accounts with gross profit
of over £1 million
A customer account is the consolidated spend by a customer
and all of its subsidiaries. Where a customer account exceeds
£1 million of gross profit, it is included within this measure. The
prior-year comparatives are restated on a constant currency2
basis to provide a better indicator of underlying growth.
Our customers have always asked us to provide a range of
activities across our service lines of Technology Sourcing,
Professional Services and Managed Services. We believe that this
need is increasing, driven both by the changes and complexity
of the technology landscape and new ways of ‘consuming’
technology services, such as our Device as a Service offering.
We also believe that we are well positioned to offer significant
value for our customers, by combining our service and product
capabilities, and we are investing in systems to underpin these
new offerings. We are confident that offering a combination of
capabilities is an important factor in both differentiating our
proposition, as well as building and retaining long-term trust with
our customers.
Therefore, we will place greater focus on measuring development
against this strategic priority. We have defined the measure to
include all customers which contribute more than £250,000 of
margin, and from which Technology Sourcing revenue is over
£1 million, and Services revenue over £0.5 million.
How we define customer accounts with gross profit
of over £250,000
A customer account is the consolidated spend by a customer
and all of its subsidiaries. Where a customer account exceeds
£250,000 of gross profit, it is part of our ‘target market’ and
included within this measure. The prior-year comparatives are
restated on a constant currency2 basis to provide a better
indicator of underlying growth.
22 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Services growth
Lead with and grow our Services
Services revenue (£m)
+7.7%
1,571
2022
2021
2020
2019
2018
Productivity
Improve our productivity and enhance our
competitiveness by leveraging our scale and
building efficiencies
Services revenue generated per
Services head (£’000)
+0.8%
106.2
2022
2021
2020
2019
2018
1,571
1,458
1,233
1,216
1,157
106.2
105.4
95.3
90.9
87.4
We use a number of performance indicators to help us measure
and drive our productivity and efficiency, of which Services
revenue generated per Services head is a critical one. The use of
technology across our customer base is the key driver behind
increasing this metric, following our investment in tools that we
can utilise more effectively than our customers due to our scale.
Increasing our productivity enables us to be more competitive in
a market where price is clearly an important factor in customer
decision making.
High levels of availability and utilisation of our Services personnel
during the Covid-19 pandemic enhanced Services revenue in 2021.
Additionally, we have seen increased volumes of offshoring in 2022
which are generally margin enhancing, but do not impact revenue
in the same way. Given these significant headwinds to the
comparative performance, we are relatively pleased with this
strategic objective outcome in 2022.
Further progress is required in this area in order to maintain our
competitiveness, largely through the use of tools and automation.
We continue to focus on offshoring where the opportunity exists.
How we define Services revenue generated per Services head
This is our Group Services revenue divided by the number of
employees directly involved in providing our Managed Services and
Professional Services offerings. The prior-year comparatives are
restated on a constant currency2 basis to provide a better
indicator of underlying growth.
Management is highly incentivised, both in-year and through our
long-term incentive plans, to grow our Services. We understand
that having a significant Services element within a customer
engagement generally increases the longevity of the relationship.
During 2022, we grew Services revenue in constant currency2
by over £100 million. A small part of this was due to in-year
acquisitions, with the vast majority being generated through
organic growth.
We are particularly pleased with the Professional Services
capability and growth that we have seen in Germany, where we are
building greater scale and competitive advantage. We are looking
to replicate this across all our geographies. Our growth in North
America in both Professional and Managed Services has been
encouraging, albeit from a low base.
We go into 2023 with an overall Contract Base of £852 million (2021:
£821 million). This growth was all organic, as acquisitions made in
2022 did not contribute to the Contract Base result. Our Managed
Services business has made reasonable progress in challenging
market conditions. Despite the impact of inflation, and resulting
upward pressure on our cost base, customers continue to expect
productivity gains through systems and automation, the
development of which requires sustained and consistent
investment. It was an extremely successful year for Managed
Services renewals, alongside a number of new wins. These will aid
growth in the short-to-medium term, but ongoing growth must be
underpinned by taking market share from our competitors.
At the beginning of 2023, we made a number of management
changes and realigned a number of internal functions to enable
faster simplification and growth in both our Professional and
Managed Services businesses over the medium term.
How we define Services revenue
Services revenue is the combined revenue of our Professional
Services and Managed Services business. The prior-year
comparatives are restated on a constant currency2 basis to
provide a better indicator of underlying growth.
Computacenter plc Annual Report and Accounts 2022 | 23
Our performance in 2022
Group
Financial performance
Our business model is built on the three
primary service lines of Technology Sourcing,
Professional Services and Managed Services,
and reinforces our position as having the
largest services business of any value-added
reseller, as well as the largest value-added
reseller capability of any services business
worldwide. Executing this business model
supports Our Purpose of helping our
customers change the world.
Our strong trading performance over the
year to 31 December 2022 continues to
demonstrate the resilience of our business
model. There were a number of challenges
ahead of us when we reported our Interim
Results on 9 September 2022 and we are
pleased that we have overcome each of these
challenges. Ensuring another year of
adjusted1 diluted earnings per share (EPS)
growth, achieving full-year gross invoiced
income growth in the United Kingdom
Segment, arresting the growth in our
inventory to improve our cash position and
stabilising our Services margins were all key
to our success in the second half of the year
and the full year as a whole.
Adjusted1 diluted EPS
Historically, revenues have been higher in the
second half of the year than in the first six
months, principally due to customer buying
behaviour. This typically leads to a more
pronounced effect on operating profit.
However, the impact of Covid-19 and the more
recent supply shortages for IT equipment
materially altered customer buying
behaviours in 2020 and 2021. In 2021 an
abnormally high percentage of our full-year
profits came in the first half of the year,
which means we had a more challenging
comparison for the first half of 2022 than
for the second half.
During 2022, we saw these unusual buying
patterns reversing and the re-emergence of
seasonality that is closer to our historical
norms. Adjusted1 profit before tax for the first
half of 2022 was therefore behind that in the
first half of 2021.
In line with our expectations, adjusted1 profit
before tax was down in the first half of the
year against the first half of 2021 by nearly six
per cent, which created a material headwind
for the second half of 2022. We are therefore
very pleased with the profit growth which we
subsequently achieved for the year as a
whole, and the significant momentum that we
will carry into 2023, including in our previous
and in-year North American acquisitions, which
have continued to make good progress, both
in terms of profit growth and cash generation.
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.
Computacenter finished the year with a
record fourth quarter, which resulted in an
18th consecutive year of adjusted1 diluted EPS
growth. Whilst our performance in 2022 was
helped by a strong US dollar, and a small
acquisition in the second half of the year,
this assistance was far outweighed by the
headwinds faced by the business as the
Covid-related benefits it experienced in 2020
and 2021 unwound, particularly impacting
our Services margins. Adjusted1 diluted EPS,
the Group’s primary EPS measure, increased
by 2.5 per cent in 2022 to 169.7 pence (2021:
165.6 pence). Diluted EPS decreased by
1.1 per cent to 159.1 pence (2021: 160.9 pence).
Gross invoiced income (£m)
+30.7%
9,052.2
6,923.5
2022
2021
2020
2019
2018
5,441.3
5,052.8
4,352.6
Revenue (£m)
+28.5%
2022
2021
6,470.5
5,034.5
Adjusted1 operating profit (£m)
+2.4%
2022
2021
2020
2019
2018
151.5
118.8
269.1
262.8
206.4
Gross invoiced income by business type
1
3
2
1. Technology
Sourcing:
82.7%
2. Professional
Services:
7.0%
3. Managed
Services:
10.3%
24 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Results
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing gross invoiced income
Total gross invoiced income
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 total administrative expenses
Adjusted1 operating profit
Net adjusted1 finance costs
Adjusted1 profit before tax
Gross profit
Total administrative expenses
Operating profit
Net finance costs
Profit before tax
2022
£m
2021
£m
Percentage
change
Percentage
change
2021
£m
constant
currency2
560.1
897.6
1,457.7
5,665.7
7,123.4
560.1
897.6
1,457.7
3,712.3
5,170.0
885.3
(619.5)
265.8
(7.5)
258.3
13.7%
4.1%
7.7%
32.1%
27.1%
13.7%
4.1%
7.7%
32.0%
25.2%
7.0%
9.4%
1.2%
(28.0%)
2.1%
636.6
934.0
1,570.6
7,481.6
9,052.2
636.6
934.0
1,570.6
4,899.9
6,470.5
947.1
(678.0)
269.1
(5.4)
263.7
947.1
(690.7)
256.4
(7.4)
249.0
552.4
898.5
1,450.9
5,472.6
6,923.5
552.4
898.5
1,450.9
3,583.6
5,034.5
867.8
(605.0)
262.8
(7.2)
255.6
867.8
(612.6)
255.2
(7.2)
248.0
15.2%
4.0%
8.3%
36.7%
30.7%
15.2%
4.0%
8.3%
36.7%
28.5%
9.1%
12.1%
2.4%
(25.0%)
3.2%
9.1%
12.7%
0.5%
2.8%
0.4%
United Kingdom revenues
The United Kingdom saw 12.6 per cent growth
in gross invoiced income following an
astonishingly strong finish to the year. This
top-line growth occurred even as the product
mix changed significantly from hardware,
which decreased, towards software and
resold services where, with software in
particular, longer-term framework contracts
are becoming prevalent and drove the United
Kingdom result in the second half of the year.
Inventory
Supply chain constraints remain in the
forefront of our customers’ minds and their
planning. Whilst product availability varies by
vendor and product line, product shortages
materially affected the supply of key
networking equipment for our customers
throughout 2021 and into 2022, with some
orders being substantially delayed or only
partly fulfilled. We saw this situation
materially reverse throughout the last quarter
of 2022 where supply returned to much more
stable levels, with the exception of certain
networking products.
The Group continues to carry more inventory
than normal. When customers realised that
even their size of order would not guarantee
supply, they switched to ordering much
further in advance of their requirement than
normal. This spiked our product order backlogs
and, as we placed orders, manufacturers
delivered as soon as product was available
and even when only partly available. This led to
inventory levels increasing rapidly. Earlier in
the year we were holding stock for orders that
we could not deliver without a critical part or
where customers had ordered early and
subsequently delayed delivery, as their data
center facilities or other project requirements
were not ready. We continue to work to return
to the normal inventory cycle, with customers
and vendors, to reflect the improved supply of
hardware products.
Computacenter plc Annual Report and Accounts 2022 | 25
Our performance in 2022 continued
The Group had £417.7 million of inventory as
at 31 December 2022, an increase of 22.4 per
cent during the year (31 December 2021:
£341.3 million), and an increase of 12.3 per
cent in constant currency2. Total inventory
across the Group was therefore £76.4 million
higher at 31 December 2022 than at
31 December 2021, and higher by £18.4 million
since 30 June 2022. Inventory was, however,
lower by £115.0 million since 30 September
2022, which was the high point for inventory
during the year.
Whilst we have already been paid for some of
this inventory, customers are committed to
taking nearly all of the rest of the holding,
so it is a largely risk-free position.
Further commentary on progress and initiatives
in reducing our inventory and improving our
cash generation is available in the Group
Finance Director’s Review on pages 64 to 66.
Services margins
Computacenter, like most companies, is
affected by wage inflation associated with
the macroeconomic disruption, and supply
chain shortages, but these will offer us
opportunities to differentiate from our
competition with superior execution.
Services margins are broadly in line with
pre-Covid-19 levels, matching the Services
margin percentage achieved in 2018, but
373 basis points down from the all-time high
achieved in 2021. During 2020 and 2021, the
Group benefited from cost savings within its
Services margins that have now unwound,
proving themselves temporary in nature.
These temporary benefits included
significantly increased utilisation of our
engineers, working remotely through the
pandemic, who no longer had to spend
otherwise billable time travelling to customer
sites and had improved availability due to
lower sickness, a substantial reduction in the
use of external contractors and lower travel
costs. These trends reversed in 2022 and have
led to a significant Covid-19 headwind of
approximately £58 million of gross profit,
calculated by applying 2021 margin rates
against 2022 Services volumes. The Group
absorbed this in 2022 through superior
execution in other areas of the business.
Services margins, more than any other aspect
of the business performance, was the area
that most improved the Group’s performance
during Covid-19, much more so than
Technology Sourcing volumes. We believe that
these Covid-19 factors have now washed
through our results and will not impact
comparative numbers moving forward,
allowing the continued robustness of the
Services top-line growth to flow through to
gross profit unhindered by this one-time
reversal in margins due to the Covid-19 effect.
Enhanced bid governance processes have
resulted in better underlying margins on new
contracts, although inflationary pressures
will make it challenging to maintain these
levels in the short term. It is important to note
that less than 20 per cent of our employees
now reside in the United Kingdom, so the
impact of these inflationary pressures should
be considered on a more global basis than
simply on the macroeconomic performance
within the United Kingdom itself. Further, we
have continued to invest ahead of demand in
the Professional Services business with an
impact on recruitment, training and initial
start-up utilisation, especially in the United
Kingdom and Germany, which is also reflected
in the margin performance for 2022.
Technology Sourcing trading performance
Our Technology Sourcing product sales
remained extremely strong through the
second half of the year and into the early
months of 2023, with strong demand in all of
the countries in which we operate. Trading
across all of our major geographies was
pleasing throughout the year, with double-
digit growth in gross invoiced income in
each Segment.
Group gross invoiced income grew by 30.7 per
cent including the effects of acquisitions
made in the middle of 2022, and by 27.1 per
cent in constant currency2. As discussed
further in the Finance Director’s Review on
page 61, we changed our revenue recognition
accounting policies during the year, including
retrospectively.
The United Kingdom has seen a further shift in
product mix away from hardware into software
and resold Services, which experienced
strong growth in the second half of the year.
German Technology Sourcing sales continued
to grow strongly, with a growing workplace
business now complementing the other areas
of Technology Sourcing that are more of
a traditional source of strength for the
German business.
We remain extremely pleased by the scale
of our growth in North America which, after
removing the very strong growth in our
largest North American customer, and the
impact of the BITS acquisition, still saw nearly
nine per cent growth in Technology Sourcing
gross invoiced income. Whilst gross profits
grew significantly, margins were lower due to
the aforementioned growth from one North
American hyperscale customer which saw
lower margins than the average margins
achieved across the rest of the business.
French Technology Sourcing gross invoiced
income saw excellent growth, made even
more pleasing by a product mix shift away
from workplace to higher margin data center
and networking products, to address a
customer set with increasing demand.
The Technology Sourcing performance
in the International Segment saw strong
growth, with astonishing progress in the
Netherlands business.
As demand has remained high, with order
books continuing to build, the driver of
customers’ IT purchasing has focused on
the short- to medium-term impacts of the
economic downturn, as they look to re-
engineer IT structures and employ digital
transformation to cope with the ever-evolving
technology landscape, the need to reduce
non-IT operating costs and increasing cyber
threats. We believe that IT spend remains
strategic to our customers rather than
discretionary and will be amongst the last
expenditure categories to be retrenched if the
forecast global economic recession becomes
a reality. The strength of the overall
Technology Sourcing result is driven by the
spread of the customer base across multiple
market segments, technology lines and
geographies, which create durability and
sustainability within the business model
through diversification.
Our product order backlogs, which are the
total value of outstanding orders with our
vendors, across all geographies, are at
all-time highs and considerably larger than at
the end of 2021. The committed order backlog
at the year-end was £2,913.9 million of
confirmed purchase orders for delivery within
12 months, on a gross invoiced income basis,
a 76.2 per cent increase since 31 December
2021 (£1,654.1 million) in constant currency2.
We have modified this measure since that
presented within the 2022 Interim Report and
Accounts to exclude committed purchase
orders for delivery beyond 12 months. Whilst
the Managed Services Contract Base and the
Professional Services forward order book
have always given us better visibility of future
revenues in these areas, the increasing
Technology Sourcing backlogs, partly due to
the increasing trend for customers to order
in advance, mean that we now have much
greater visibility of future revenues than
ever before. This gives us a high degree of
confidence that the Technology Sourcing
business will be well placed in the year ahead.
26 | Computacenter plc Annual Report and Accounts 2022
Strategic Report As previously communicated, Computacenter
is currently going through a significant
internal IT investment phase, which we expect
to last for a further two or three years. While
this has put pressure on our profitability in the
short term, we believe it is the right thing to do
so we can take advantage of the long-term
growth opportunities in the market and
enhance our competitive position to take
market share. We remain positive about the
outlook in the short, medium, and long term.
While there are plenty of challenges due to the
macroeconomic environment, we continue to
expect 2023 to be a year of progress.
Whilst the recent EPS performance of peer
services businesses remains suppressed
when compared to those of our VAR
competitors, we continue to focus on the
importance of our Services businesses within
the context of our overall business model
offering to our customers. Managed Services
in particular is important to the longevity of
customer relationships with us. The ability to
cross-sell and upsell Professional Services
and Technology Sourcing to our Managed
Services customers increases our share of
the overall IT wallet in those customers and
makes those customers stick with
Computacenter. More than three-quarters
of our major European headquartered
customers have at least £0.5 million of
Managed Services spend per annum.
Our Services margin performance was
impacted in 2022 by the unwinding of
Covid-19-related benefits during the year,
and inflationary pressures which we expect
to continue into 2023 as noted above.
Outlook
At Computacenter, we are pleased to have
shown adjusted1 earnings per share growth in
2022 over the previous year, considering the
challenging headwind from the unravelling of
temporary Covid-related cost base reduction
benefits. In 2023, we do not have anywhere
near the same challenge as we have faced in
2022. By the end of the first half of 2022,
almost all of the Covid benefits had
disappeared from the business.
Demand from most of our largest customers
remains solid, particularly for IT infrastructure
on which their businesses rely. We have seen
top-line revenue extremely buoyant so far this
year and expect this trend to continue. Our
challenges for the coming year include, to a
small extent, Technology Sourcing margins,
due to the fact it is the largest customers,
which are dilutive to margins, that are
spending most, and, more significantly,
Services margins due to price pressure in
the market and salary inflation.
Supply constraints have eased materially
and while some will always remain, we are
now operating at close to normal market
conditions. Aligned with this, our inventory
levels started to fall at the beginning of the
fourth quarter of last year and we expect
further reduction this year, which will continue
to decrease the working capital required in
the business.
Overall Group Technology Sourcing margins,
based on gross profit as a percentage of
revenue, decreased by 167 basis points during
the year, mainly due to customer and product
mix changes.
Services trading performance
Our Services revenue performance was
strong during the year and we are confident
of continued Services revenue growth
fuelled by the continuing success story
that is our Professional Services business
and the strength of recent wins within
Managed Services.
Professional Services in Germany has
continued its excellent recent track record,
with another year of rapid growth across all
solutions lines. The United Kingdom saw a
Professional Services decline due to the
change in product mix in Technology Sourcing,
particularly the reduction in workplace, that
meant a follow-on reduction in deployment
programmes. French Professional Services
saw good growth, rebounding from the
performance in 2021 with a return of projects
in both public sector and within our Managed
Services contracts. Professional Services in
North America saw a large expansion through
a number of very significant projects in 2022,
increasingly demonstrating the scale of the
business which is now approaching the size of
the UK business, furthering our geographical
diversification.
Professional Services is an essential part of
our integrated business model – to help us
create significant value for our customers
and to be a volume-revenue and profit-growth
driver for our business. We now have a
Professional Services business with more
than 6,000 people who completed over 1,900
projects in 2022, with more than 1.4 million
billed consultancy hours in that time. We are
committed to growing and enhancing our
Professional Services business even
further by having a broader and scalable
portfolio across all countries, based on a
common operating framework and a strong
sales approach.
Managed Services saw robust revenue
increases in all geographies, apart from
the United Kingdom which was impacted by
2021 contract losses and a delay in the
commencement of new contract revenue
streams. Germany saw increased revenues
due to wins from 2021 as the contracts come
on stream. France was impacted by the
expected cessation of legacy Computacenter
NS contracts, although this was more than
offset by new business. The North American
Segment saw substantial growth, albeit from
a low base, but will enjoy further growth from
wins in 2022.
Computacenter plc Annual Report and Accounts 2022 | 27
Our performance in 2022 continued
United Kingdom
Gross invoiced income (£m)
+12.6%
2022
2021
2020
2019
2018
Revenue (£m)
-10.9%
2022
2021
2,324.5
2,063.7
1,773.4
1,597.0
1,611.3
1,269.4
1,425.4
Adjusted1 operating profit (£m)
-21.8%
2022
2021
2020
2019
2018
80.5
102.9
90.3
64.5
58.3
Gross invoiced income by business type
11
3
2
1. Technology
Sourcing:
80.2%
2. Professional
Services:
6.3%
3. Managed
Services:
13.5%
Financial performance
We have continued to invest to broaden our
customer base and have been successful
in growing the number of target-market
customers. This will bear fruit in future years,
as we work with those customers and
increase the range and value of our sales
to them.
Our people costs have increased as inflation
has pushed salaries up and we intend to pass
most of this on to our customers, through
higher prices. During the year, our people
increasingly came back to the office and met
our customers face to face. We opened new
collaboration spaces in our United Kingdom
head office in Hatfield.
Higher administrative costs reflected the
impact of inflation on people costs, the
expansion of our sales force in the previous
year to grow our customer base, and the
return of domestic and international travel.
We are carefully managing travel by using
technology, while applying a carbon travel
levy to ensure that we make carbon-efficient
choices. Travel overall remains below
pre-pandemic levels.
Demand from public sector customers has
diminished since the pandemic, and there
were a small number of non-renewals within
public sector contracts in 2021 which
impacted 2022. Political uncertainty also
delayed spending decisions in the second half
of the year. However, the corporate sector
performed better as more employees
returned to their offices. We also benefited
from customers who value our international
capabilities, as we can serve their operations
in the United Kingdom, Europe, North America
and Asia-Pacific.
With economic conditions becoming more
difficult, some customers are slowing down
their investments, particularly for hardware
upgrade projects. However, we believe this
is creating pent-up demand and that we
will benefit as they resume investing in
their businesses.
Overall gross margins in the United Kingdom
increased by 160 basis points, with total
adjusted1 gross profit at 20.4 per cent of
revenues (2021: 18.8 per cent). This result
was impacted by the significant swing from
hardware to software and resold services
within Technology Sourcing. This gross margin
ratio increase was assisted by a higher
proportion of software and resold services
during the year, where the margins are
recorded directly as net revenue as a result
of our recent change in revenue recognition
accounting policies.
Technology Sourcing performance
The reduction in Technology Sourcing
revenues reflected a shift in product mix
towards software and resold services, which
improved margins but had less impact on
reported revenue as they are booked on an
agency or net basis. Our gross invoiced
income increased by 17.9 per cent year on
year. Technology Sourcing margins, based
on gross profit as a percentage of revenue,
increased by 450 basis points compared
to 2021, due to the change in product mix
described above.
We saw lower demand for hardware during
the year, primarily in workplace, as some
customers completed their Windows 10
rollouts. The reduced workplace activity
affected utilisation and cost absorption of
our Integration Centers, where we add value
for customers, for example by configuring
their devices.
Our software business grew rapidly, in
particular through longer-term framework
contracts, and we also expanded our resold
services. Neither of these areas had the
supply chain issues that affected hardware
sales, allowing us to rapidly fulfil customer
demand. In the enterprise solution areas,
we are seeing good growth in our data
center and cloud business, again driven
by software sales.
28 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 2021
£m
Percentage
change
2022
£m
147.5
312.8
460.3
1,864.2
2,324.5
147.5
312.8
460.3
809.1
154.6
327.6
482.2
1,581.5
2,063.7
154.6
327.6
482.2
943.2
(4.6%)
(4.5%)
(4.5%)
17.9%
12.6%
(4.6%)
(4.5%)
(4.5%)
(14.2%)
(10.9%)
(3.4%)
8.1%
(21.8%)
1,269.4
1,425.4
259.2
(178.7)
80.5
268.2
(165.3)
102.9
Revenue in Managed Services was lower,
reflecting the full-year impact of contract
losses in 2021 and delays to some contract
awards we had anticipated in 2022. However,
we had a good year for renewals and won a
significant contract that will benefit revenues
going forwards. In 2021, we won a significant
Managed Services contract with a large
multinational investment bank and financial
services company, to provide a device as
a service model with worldwide support
coverage and Technology Sourcing embedded
in the contract. We have continued to roll the
model out globally for the customer and our
pipeline for device as a service is growing, with
a second contract with a large pharmaceutical
company being signed since the year end.
Services margins decreased by 434 basis
points when compared to the prior year.
This was primarily due to costs returning
to the business following the end of the
Covid-19 pandemic and resumption of normal
working practices.
Results
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing gross invoiced income
Total gross invoiced income
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit
We have seen improved availability of
hardware components for workplace and
data center but this remains an issue for
networking. The committed order backlog at
the year end was £331.0 million of confirmed
purchase orders for delivery within 12 months,
on a gross invoiced income basis,
a 70.1 per cent increase since 31 December
2021 (£194.6 million).
Services performance
The lower workplace demand in Technology
Sourcing also affected Professional Services,
which rolls out technology we have sold to our
customers. We also saw a slight decline in the
number of large programmes of work that are
on an outcome-based commercial model.
However, we benefited from increased
demand for adopting public cloud and for
expanding and securing customer networks.
We also grew our resources on demand
business, where we provide specialist
resources to support our customers’
operations. Profitability in Services was
held back by additional costs to improve
performance on a small number of
Professional Services contracts, which we
addressed during the year. The pipeline for
Professional Services is strong, giving
us confidence that growth opportunities
are realisable.
Computacenter plc Annual Report and Accounts 2022 | 29
Our performance in 2022 continued
Gross invoiced income (€m)
+17.5%
2022
2021
2020
2019
2018
Revenue (€m)
+18.6%
2022
2,804.3
2,386.4
2,108.2
2,161.9
2,115.7
2,159.3
1,821.0
2021
2020
2019
Adjusted1 operating profit (€m)
2018
+2.6%
2022
2021
2020
2019
2018
91.0
75.6
164.8
160.7
125.7
Gross invoiced income by business type
1
3
2
1. Technology
Sourcing:
71.1%
2. Professional
Services:
13.2%
3. Managed
Services:
15.7%
Germany
Financial performance
After a strong fourth quarter, we are very
pleased with the full-year result. We exceeded
our revenue growth expectations and despite
somewhat weaker margins, the bottom-line
result was above plan and the previous year’s.
This was an excellent performance given the
positive cost and capacity utilisation effects
in Services in 2021, which we had expected to
reverse in 2022.
Despite market uncertainties resulting from
the war in Ukraine, ongoing Covid-related
restrictions, and continued supply chain
issues, we recorded good double-digit
overall growth in revenues and gross
invoiced income.
It was challenging to recruit skilled people
during the year, but our targeted recruitment
initiative significantly strengthened the skills
base for consulting and project Services and
recruitment was a little easier by the end of
the year. We had planned to expand our sales
force but this proved more difficult than
expected, and this is a challenge we will take
into 2023. The pressure on salaries, triggered
by high inflation, had only a modest effect
on costs in 2022 and is more likely to affect
the cost base in 2023, especially for our
Services businesses.
Throughout the year, our biggest challenge
was handling our supply chain business.
Customers had switched to a high stocking
strategy to ensure availability and we
therefore had to manage three times the
usual operating levels of inventory on
occasions, for which our Integration Center in
Kerpen had insufficient storage and logistics
space. However, we reacted quickly to
reactivate our former Integration Center,
doubling our capacity within three months.
This enabled us to clear the entire backlog
before the year end, and we are now back to
normal operating levels. We can now act much
more flexibly and provide additional capacity,
which should give us a boost for 2023.
The ongoing macroeconomic difficulties
– in particular the energy shortage and high
energy prices caused by the war in Ukraine
– had very different effects on our customers.
Companies that are heavily dependent on
energy, especially large chemical companies,
are reducing their IT expenditure or
postponing investments. Nevertheless, we
see the overall effects being less severe,
especially in our customer base, and many
companies are going into the coming year
stronger. Our public sector business remains
one of our strengths. Demand here is still high
and the pipeline promises good potential.
We have started to develop a new customer
sector in education and are significantly
expanding our sales capacities in almost all
federal and state authorities.
In addition to large framework successes
discussed in the half-year report, we have
extended the network support agreement
with an international car manufacturer for
the next five years and also integrated
additional services. We also extended the
network and procurement contract for a
major public sector customer and won the
associated cloud contract. At the start of
2023, we were the first Cisco partner in
Germany to conclude a worldwide ‘Whole
Portfolio Agreement’ with a large German
industrial and technology company.
While the geopolitical and economic situation
in Germany remains unpredictable, it has
become more positive in recent months due
to lower energy prices and inflation levelling
off. We are convinced that companies, and
particularly public sector customers, will
continue to invest in IT infrastructure and
digitisation projects. Their requirements are
becoming increasingly global, which should
also benefit us. We expect good overall growth
again in 2023, underpinned by our pipeline.
Nevertheless, 2023 will be challenging on the
cost side, due to inflation-driven cost
increases and salary adjustments. Overall,
we are assuming slight growth in adjusted1
operating profitability.
30 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Results
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing gross invoiced income
Total gross invoiced income
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit
2022
£m
315.7
374.7
690.4
1,704.7
2,395.1
315.7
374.7
690.4
1,153.1
1,843.5
273.8
348.6
622.4
1,427.7
2,050.1
273.8
348.6
622.4
942.6
1,565.0
2021
£m
Percentage
change
2021
€m
Percentage
change
2022
€m
370.1
439.5
809.6
1,994.7
2,804.3
370.1
439.5
809.6
1,349.7
2,159.3
318.4
405.2
723.6
1,662.8
2,386.4
318.4
405.2
723.6
1,097.4
1,821.0
16.2%
8.5%
11.9%
20.0%
17.5%
16.2%
8.5%
11.9%
23.0%
18.6%
4.8%
6.7%
2.6%
15.3%
7.5%
10.9%
19.4%
16.8%
15.3%
7.5%
10.9%
22.3%
17.8%
4.2%
5.7%
2.2%
325.1
(184.2)
140.9
312.0
(174.2)
137.8
380.8
(216.0)
164.8
363.2
(202.5)
160.7
Margins in Germany decreased by 230 basis
points, with adjusted1 gross profit decreasing
from 19.9 per cent to 17.6 per cent of
revenues, as explained below.
Technology Sourcing performance
Revenue increased significantly compared to
2021. The margin erosion in the first half of
the year reversed in the second half and the
overall margin situation is stable. Technology
Sourcing margins, based on gross profit as
a percentage of revenue, remained strong
but slipped by 89 basis points over the year.
The revenue growth driver is once again the
network and security business, followed by
a very good workplace business. We also saw
strong growth in software licence reselling.
Given the capacity problems in our Integration
Center through much of the year, the result
was excellent. We solved these challenges
through the commitment of our teams and
investments in the infrastructure and are
now very well positioned for future growth.
Inventory also significantly reduced towards
the end of the year and is now close to the
normal level.
Looking ahead, we are targeting continued
strong growth in 2023. Even if customer
requirements decrease, as many customers
have invested in their workplace
infrastructure in particular in the last two
years and are now reaching saturation, we
have won new customers and contracts with
the potential to ensure sufficient growth.
We won a framework agreement which can
be leveraged by all European Union central
banks. The committed order backlog at the
year end was €362.9 million of confirmed
purchase orders for delivery within 12
months, on a gross invoiced income basis,
a 20.6 per cent decrease since 31 December
2021 (€457.0 million).
Services performance
Services growth in 2022 was driven by
Professional Services, although Managed
Services also developed well. We benefited
from contracts won in 2021 and the expansion
of existing business. In Professional Services,
we grew all solution areas and benefited from
the nearshore and offshore capacities we had
created. We are seeing a notable increase in
international revenues in both the
Professional Services and Managed Services
businesses. Our international presence and
the opportunities created by leveraging
nearshore and offshore capabilities should
give us additional impetus for 2023.
Services gross profits benefited from volume
growth but cost and efficiency had a negative
impact on margins. Compared to 2021, we
recorded increased travel, training and event
costs. However, we are still well below the
pre-Covid level and within the expected range.
We also planned for a slight underutilisation of
service resources due to the significant
expansion of capacity, primarily due to new
business entrants. However, we did not
foresee the cold and flu wave that swept over
Germany, particularly from October to
December. As a result, sick leave increased
substantially, leading to lower availability of
resources. These three effects have put the
Services margins under pressure, with a
decrease of 403 basis points over the year.
In summary, we are satisfied with
performance in the service area and we have
the potential to address even more business
with our customers.
We are targeting double-digit revenue growth
in 2023, especially in Professional Services,
and the persistently high demand from public
sector customers assists with this objective.
However, we also assume that Services gross
profit will be affected by increased salary
costs, which we can only recover over time
due to long-term contracts that do not allow
all price adjustments to be passed on to the
customer, and due to the general increase in
costs, especially for energy, which will affect
our Managed Services contracts. Overall,
we assume that we can achieve a small
growth in Services gross profit.
Computacenter plc Annual Report and Accounts 2022 | 31
Our performance in 2022 continued
France
Financial performance
Our French business made good progress in
2022, mainly thanks to a very strong last
quarter in our Technology Sourcing business.
Our Integration Center in Gonesse was busy
throughout the year and handled record
product volumes in December.
Towards the end of 2020, we acquired BT’s
domestic services operations in France and
renamed the subsidiary Computacenter NS
(CCNS). CCNS significantly improved our
capabilities around networking and security
in France. Simultaneously, we have developed
our competencies in data center solution
design and software licensing solutions. We
made good progress in 2022 with leveraging
these new capabilities, as evidenced by the
shift in our business mix from workplace to
data center and networking.
Another notable development in 2022 was the
growth of our software licensing business.
We grew the traditional reselling of licences
and also saw good progress with closing
some high-volume, long-term software
consumption-based agreements.
The further integration of CCNS progressed
according to plan and since 1 January 2023,
all CCNS maintenance and data center
operations teams have been fully integrated
within our Group delivery teams. This means
we have integrated 100 per cent of CCNS
activities within the Computacenter operating
model. At the time of acquisition, we knew that
certain CCNS contracts would not be renewed
and the total Managed Services Contract Base
declined in line with our expectations. It is
encouraging that we won a few large network
maintenance contracts towards the end of
the year and we are determined to further
grow our CCNS business.
Computacenter continues to develop its
capabilities worldwide. That enables us
to propose compelling solutions to our
internationally-based French customers in
the corporate sector. Moreover, local French
customers from both the corporate and
public sectors benefit from our worldwide
capabilities, as they can use our global,
scalable systems and benefit from worldwide
vendor relationships and corresponding
terms and conditions.
In the second half of the year, Anne Merinville
was appointed as the new Country Unit
Director for France, allowing her to fully focus
on the development of the sales team in
France. Together with the country management
team, we have defined a future-ready sales
structure and believe that we can now fully
focus to establish further growth in the
French market.
From an economic perspective, while inflation
will influence our Technology Sourcing and
Services costs and market pricing in 2023, the
inflation rate in France is lower than in most
European countries, largely because the
Government has capped energy price
increases. Although there is the prospect of
an economic slowdown, we remain confident
that customers will continue to invest
significantly in their IT, reflecting the
importance of technology to delivering their
change programmes. This is reflected in our
database of identified customer
opportunities, which is double the size of
a year ago. Margins in France increased by
23 basis points, with adjusted1 gross profit
increasing from 12.3 per cent to 12.5 per cent
of revenues.
Gross invoiced income (€m)
+20.8%
2022
2021
2020
2019
2018
918.1
760.0
753.9
715.8
557.4
Revenue (€m)
+11.3%
2022
2021
718.4
645.5
Adjusted1 operating profit (€m)
+90.5%
2022
2021
2020
2019
2018
8.0
4.2
8.0
14.4
19.8
Gross invoiced income by business type
1
3
2
1. Technology
Sourcing:
77.2%
2. Professional
Services:
5.3%
3. Managed
Services:
17.5%
32 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Results
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing gross invoiced income
Total gross invoiced income
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit
Technology Sourcing performance
Our Technology Sourcing business had a very
strong year, despite continued challenges
around product shortages worldwide.
Towards the end of the year, we saw an
improvement in product availability and
are hopeful that we can return to normal
during 2023.
Due to these shortages and continued high
demand, we faced high inventory levels
throughout the year. However, inventory
reduced towards the end of 2022, evidencing
the improvement of product availability at
the year end. Technology Sourcing margins
increased by 47 basis points, based on gross
profit as a percentage of revenue.
The global product shortages in 2020 and
2021 meant that we started 2022 with a very
high backlog position. With record revenue in
Technology Sourcing in 2022 and improved
product availability, we expected that the
backlog would decline towards the end of
the year. This was not the case, proving the
effectiveness of our sales force throughout
the year in identifying and closing new
opportunities with our customers. The
committed order backlog at the year end was
€132.2 million of confirmed purchase orders
for delivery within 12 months, on a gross
invoiced income basis, a 5.2 per cent increase
since 31 December 2021 (€125.7 million).
2022
£m
41.7
136.4
178.1
606.7
784.8
41.7
136.4
178.1
435.8
613.9
76.7
(69.6)
7.1
2021
£m
Percentage
change
38.0
134.0
172.0
481.4
653.4
38.0
134.0
172.0
383.2
555.2
68.1
(64.6)
3.5
9.7%
1.8%
3.5%
26.0%
20.1%
9.7%
1.8%
3.5%
13.7%
10.6%
12.6%
7.7%
102.9%
2022
€m
48.9
160.0
208.9
709.2
918.1
48.9
160.0
208.9
509.5
718.4
89.5
(81.5)
8.0
2021
€m
Percentage
change
44.1
155.9
200.0
560.0
760.0
44.1
155.9
200.0
445.5
645.5
79.2
(75.0)
4.2
10.9%
2.6%
4.5%
26.6%
20.8%
10.9%
2.6%
4.5%
14.4%
11.3%
13.0%
8.7%
90.5%
Services performance
The Services business was challenged in 2022,
as it was across the Group. During the pandemic
in 2021, our Professional Services consultants
worked mainly from home, resulting in
optimised utilisation of their time, with less
travel and lower sickness levels, and very low
travel expenses. With the return to work,
these advantages have disappeared. Services
margins decreased by 78 basis points.
The continued competitiveness in the labour
market for talent throughout 2022 also
affected our ability to respond to all the
project opportunities. We have increased
our efforts to improve our reputation as an
employer of choice in France and are hopeful
this will pay off in 2023 and beyond.
Our Managed Services base declined as
expected, with the CCNS contracts referred
to above coming to an end. Following the win
of a few significant Managed Services
opportunities in 2021, we have been finalising
the take-on of these contracts and worked
hard to optimise our service, in order to
deliver all the contracts to the agreed service
level and within the designed cost model.
A great deal of effort also went into renewing
and extending a few large existing contracts.
Computacenter plc Annual Report and Accounts 2022 | 33
Our performance in 2022 continued
North America
Performance in the year was assisted by the
acquisition of Business IT Source (BITS) on
1 July 2022. BITS is one of the fastest growing
value-added resellers in the United States and
presents good opportunities to expand our
coverage of the Mid-West region from its base
in Illinois.
We are delighted to have welcomed our new
colleagues to Computacenter, who bring
strong selling and customer service skills and
are an excellent cultural fit.
BITS outperformed our expectations in the
first six months of ownership, with revenues
of $216.1 million and adjusted1 operating
profit of $8.4 million.
North America continues to manage its
system conversions to the Group ERP system.
We are preparing to migrate the Pivot and BITS
businesses in 2023 and 2024.
Financial performance
Excluding the BITS acquisition, our organic
North American revenue growth was 57.3 per
cent on a constant currency2 basis. This was
due to continued growth of hyperscale
customers, as well as new customer wins,
with growth in both Technology Sourcing and
Services. The Technology Sourcing business
saw significant revenue growth, although this
was concentrated in a small number of
hyperscale customers where account
margins are materially lower than average.
Global supply chain challenges continue to
affect the Technology Sourcing business,
although the impact materially reduced over
the second half of 2022.
Our growth is reflected in the number of
customer accounts that exceed £1 million of
gross profit per year, which increased from
37 to 44 during the year. We have also
expanded the business that we do with other
customers and grown the average gross
profit per customer.
Margins in North America decreased by
412 basis points, with adjusted1 gross profit
decreasing from 13.6 per cent to 9.5 per
cent of revenues. The acquisition of BITS
did not significantly impact the overall
margin percentage.
The increase in adjusted1 administrative
expenses was the result of higher variable
remuneration due to the increase in gross
profit, investments in additional capabilities
to support customers and higher than
historical average increases in compensation,
due to wage inflation. Travel and living expenses
rose as Covid-19 restrictions loosened. These
were partly offset by lower facility costs and
foreign currency exchange gains.
Facility costs were lower as we reduced the
size of certain offices or combined office
locations in similar regions. North America is
expanding its Integration Center capability
overall, with a larger facility in Washington
State and a new facility in Indiana to better
manage capacity across our expanding
geographical footprint in the United States.
The acquisition of BITS also increases our
Integration Center capacity, with a facility in
Illinois. In the medium term we will look to
further integrate and align the capacity once
supply chains have normalised and the Group
ERP systems are implemented throughout the
operational units.
Excluding BITS, North America’s adjusted1
operating profit was up by 33.6 per cent to
$56.9 million. The year-on-year increase in
adjusted1 operating profit was achieved while
investing in new capabilities and expanding
the portfolio, largely focused on adding
workplace capabilities and continued
hyperscale capability which more than offset
short-term declines in our rack business.
Whilst higher volumes drove the growth, a less
favourable customer mix meant adjusted1
operating profit lagged the increase in revenue.
Gross invoiced income ($m)
+49.1%
4,019.7
2,695.1
2022
2021
2020
2019
2018
1,223.8
957.8
351.6
Revenue ($m)
+69.2%
2022
2021
3,070.6
1,815.1
Adjusted1 operating profit ($m)
+53.3%
65.3
42.6
18.4
2022
2021
2020
2019
11.6
5.6
2018
Gross invoiced income by business type
123
1. Technology
Sourcing:
95.4%
2. Professional
Services:
3.8%
3. Managed
Services:
0.8%
34 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 2021
£m
Percentage
change
2021
$m
Percentage
change
Results
Professional Services revenue
Managed Services revenue
Services revenue
2022
£m
122.5
26.9
149.4
77.5
18.6
96.1
Technology Sourcing gross invoiced income
Total gross invoiced income
3,131.7
3,281.1
1,869.2
1,965.3
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit
122.5
26.9
149.4
2,357.9
2,507.3
238.3
(185.3)
53.0
77.5
18.6
96.1
1,226.3
1,322.4
180.2
(149.2)
31.0
58.1%
44.6%
55.5%
67.5%
67.0%
58.1%
44.6%
55.5%
92.3%
89.6%
32.2%
24.2%
71.0%
2022
$m
150.3
33.2
183.5
3,836.2
4,019.7
150.3
33.2
183.5
2,887.1
3,070.6
106.5
25.8
132.3
2,562.8
2,695.1
106.5
25.8
132.3
1,682.8
1,815.1
292.4
(227.1)
65.3
247.6
(205.0)
42.6
41.1%
28.7%
38.7%
49.7%
49.1%
41.1%
28.7%
38.7%
71.6%
69.2%
18.1%
10.8%
53.3%
We continue to leverage the synergies of our
North American and European businesses,
for example by increasing our focus on the
financial services market in the United States
North-East for existing European customers.
While we are anticipating a downturn in the
North American economy, we have less than
one per cent share of the market, giving us
significant potential to grow as we invest to
take market share.
Technology Sourcing performance
Excluding BITS, Technology Sourcing gross
invoiced income increased by 40.9 per cent
on an organic basis. The organic growth was
driven by increased spending by hyperscale
customers and growth in sales to
international customers with operations in
the United States. Technology Sourcing has
grown in ‘drop-ship’ revenue, where products
are delivered directly from the vendor, and
experienced a decline in integration-driven
revenue. This leads to fewer opportunities to
add value to the transaction and decreases
the utilisation of our facilities and personnel,
leading to lower cost absorption. We continue
to see significant activity and opportunity for
our Integration Centers, including complex
distributed branch rollouts, as well as global
data center build-out projects for our
hyperscale customers. However, the
probability and timing of these opportunities
are difficult to predict.
The Technology Sourcing margin decreased
by 422 basis points, based on gross profit as a
percentage of revenue, as a result of significant
revenue growth with hyperscale customers that
command a lower-margin profile, combined with
the investment growth in Integration Center
capacity and a reduction in our higher-margin
rack fabrication volumes. The acquisition of BITS
was beneficial to gross profit while resulting in
no change in overall margins as BITS has a
similar margin profile to the rest of the business.
Compared to 2021, we saw a similar
technology spending mix among major
partners and technologies, particularly in the
data center and networking solution areas.
We benefited from significant continuing
investments by our customers, as they
digitise their operations and modernise their
infrastructure. We continue to see customers
seeking to simplify their operations by
consolidating to fewer suppliers, resulting in
long-term commitments and larger transactions.
The committed order backlog at the year end
was $2,557.4 million of confirmed purchase
orders for delivery within 12 months, on a
gross invoiced income basis, a 130.5 per cent
increase since 31 December 2021 ($1,109.5
million). This was driven by a single major
hyperscale customer, whose backlog almost
doubled over the prior year. Excluding this
customer, the backlog increased by 9 per
cent, with growth in the backlog slowing due
in part to reduced lead times as supply chain
performance improves.
Services performance
The acquisition of BITS did not have a
significant impact on Services revenue.
North American Services revenue growth was
primarily due to significant deployment
projects, with several large ongoing projects
with countrywide retail customers. Project
activity continued to recover during 2022
after customers delayed expected projects
while they responded to Covid-19 in 2020 and
2021. Our pipeline in Professional Services is
encouraging and we have secured two new
Managed Services contracts, which will ensure
this part of this business grows again in 2023
and will allow us to leverage some of our
Group investments.
Professional Services margins were down
compared to the prior year despite higher
volume, as a result of a less favourable
customer mix and the impact of wage
inflation rising faster than our ability to pass
these costs on to our customers. The Managed
Services business also reported lower
margins year-on-year, due to a combination of
customer mix and lower margins on transition
projects in their early stages. Overall, Services
margins were down by 274 basis points.
Computacenter plc Annual Report and Accounts 2022 | 35
Our performance in 2022 continued
International
The International Segment comprises
a number of trading entities, nearshore
and offshore Service Center locations
and countries in which we have other
support operations.
266.7
Gross invoiced income (£m)
+39.6%
2022
2021
2020
2019
2018
102.2
191.0
174.3
193.0
Revenue (£m)
+42.0%
2022
2021
236.4
166.5
Adjusted1 operating profit (£m)
0%
2022
2021
2020
2019
2018
3.6
8.2
7.5
Gross invoiced income by business type
1
3
2
1. Technology
Sourcing:
65.4%
2. Professional
Services:
3.4%
3. Managed
Services:
31.2%
Financial performance
Performance varied in each of our
international trading entities.
11.3
11.3
The trading entities include Computacenter
Switzerland, Computacenter Belgium and
Computacenter Netherlands. In addition to their
operational delivery capabilities, these entities
have in-country sales organisations, which
enable us to engage with local customers. The
newly acquired Emerge 360 Japan k.k (Emerge)
business has joined the International
Segment, with Services delivery locations in
Japan, Australia, Singapore and Hong Kong.
These trading entities are joined in the
Segment by the offshore Group Service Center
entities in Spain, Malaysia, India, South Africa,
Hungary, Poland, China and Mexico, and the
Professional Services Delivery Center in
Romania, which have limited external
revenues as they charge the relevant Group
subsidiaries for the Services provided.
The Belgian business had a very strong year
across all areas. Our investments of the last
few years to increase our capabilities in
data center and networking solutions have
resulted in good growth in these areas and
were rewarded by the prestigious ‘Partner
of the Year’ award from Cisco, as well as the
‘Rising Star’ award from HPE.
Our Dutch entity also delivered a strong
performance for the year, due to an international
Technology Sourcing and Services framework
contract in the corporate sector and continued
good performance in the public sector.
Meanwhile, we have completed a reorganisation
project and our location strategy, with a full
refurbishment of our Amstelveen offices and
the start of a project to move our logistics
capabilities to a new Integration Center in
Moordrecht, with completion targeted for the
second quarter of 2023.
36 | Computacenter plc Annual Report and Accounts 2022
Our Swiss operations had a challenging year,
as customers reviewed the scope of our
main Services contracts after the pandemic.
These contracts were large contributors to
the Swiss business and to compensate for
their reduction, we have further intensified
our cooperation with the rest of the
Computacenter Group and focused on
international clients with a decision-making
entity in Switzerland. We have also made good
progress in completing our services and
solutions portfolio, increased our sales
capacity and acquired important certifications
to win new customers, such as the ISO 27001
information security certification.
Overall, margins in the International Segment
decreased by 338 basis points, with adjusted1
gross profit decreasing from 23.6 per cent to
20.2 per cent of revenues.
Technology Sourcing performance
Reductions in supply chain delays towards the
end of the year gave a boost to the product
volumes we could ship to our customers and
helped to expedite networking and data
center infrastructure projects. Our international
product business in workplace remains
strong and together with our strategic
partners, we identified and onboarded new
target customers.
Compared to their local competition, the
trading entities in our International Segment
can gain an advantage from the Group’s
Centres of Excellence, which advise, design,
build, transition and ensure compliance for
large, complex and international hardware
and software opportunities. We have seen
good examples in Belgium, the Netherlands
and Switzerland from international contract
wins, thanks to our international capabilities.
Strategic Report 2022
£m
2021
£m
Percentage
change
Percentage
change
2021
£m
constant
currency2
9.2
83.2
92.4
174.3
266.7
9.2
83.2
92.4
144.0
236.4
47.8
(36.5)
11.3
8.5
69.7
78.2
112.8
191.0
8.5
69.7
78.2
88.3
166.5
39.3
(28.0)
11.3
8.2%
19.4%
18.2%
54.5%
39.6%
8.2%
19.4%
18.2%
63.1%
42.0%
21.6%
30.4%
–
8.8
70.9
79.7
112.9
192.6
8.8
70.9
79.7
88.8
168.5
40.0
(28.1)
11.9
4.5%
17.3%
15.9%
54.4%
38.5%
4.5%
17.3%
15.9%
62.2%
40.3%
19.5%
29.9%
(5.0%)
As mentioned above, our Swiss business
saw a significant decline in its two largest
Services contracts. The team has therefore
focused throughout the year on reviewing
the size and structure of our delivery teams.
We now have a more flexible and optimised
delivery model to meet future needs and we
are pleased that we were able to start some
projects in the public and corporate sectors.
Results
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing gross invoiced income
Total gross invoiced income
Professional Services revenue
Managed Services revenue
Services revenue
Technology Sourcing revenue
Total revenue
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit
We expect that the global component
shortages will reduce in severity during the
course of 2023, mainly in the data center and
networking areas. The committed order
backlog at the year end was £24.2 million of
confirmed purchase orders for delivery within
12 months, on a gross invoiced income basis,
a 1.5 per cent increase since 31 December
2021 (£23.9 million) in constant currency2.
Technology Sourcing margins have decreased
by 194 basis points, based on gross profit as
a percentage of revenue.
Services performance
In comparison with the Group’s larger
Segments, the Services business in the
International Segment produced a good
performance in 2022.
Our Belgian Managed Services business again
had a very strong year, with growth and the
renewal of two key international accounts. One
of these customers, in financial services, has
already trusted Computacenter for 22 years
to deliver global end-user Managed Services.
Our Dutch business had a stable year in
Services. We grew both revenues and gross
profit in our main contracts and have created
a good pipeline to establish further growth
in 2023.
Computacenter plc Annual Report and Accounts 2022 | 37
Sustainability
WINNING
TOGETHER FOR
OUR PEOPLE AND
OUR PLANET
Our Purpose is helping our customers
change the world and to support this we
build long-term trust with our customers,
our people, our partners and our
communities.
We have been committed for many years
to a responsible Environmental, Social and
Governance (ESG) approach, ‘Winning
Together for our People and our Planet’,
which underpins Our Purpose. We recognise
that the long-term future of our company,
our people and our planet relies on an
enduring commitment to sustainability.
We’re proud of what we’ve achieved and we’ll continue to
improve, invest and innovate. We’ll be the best that we can
be – a company that our people, customers, partners and
communities can be proud of.
Mike Norris
Chief Executive Officer
38 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 2022 highlights
Carbon neutral for Scope 1 and 2
Computacenter achieved its goal of becoming carbon
neutral in 2022 for Scope 1 and 2 emissions, supporting
our journey to Net Zero.
Carbon neutral
for Scope 1
and 2
emissions in
2022
>
Target to reduce
Scope 3 emissions
by 50 per cent from
2021 baseline
2032
>
Target
to be Net
Zero by
2040
Group emissions performance over time (metric tonnes)
Total Scope 1 and 2 emissions
Per £1 million of gross invoiced income
Per employee
4,416
5,210
13,856
2022
2021
2020
2019
2018
2022
0.49
0.75
2.55
2021
2020
2019
2018
19,808
19,741
0.24
0.30
2022
2021
2020
2019
2018
3.92
4.54
0.83
1.25
1.31
People highlights
4,500+
new people hired
82,000
candidate applications received
Planet highlights
Computacenter became
Carbon neutral
(Scope 1 and 2) in 2022
Solutions highlights
112,028 tonnes
of carbon avoided through
reuse of assets (redeployment
and remarketing)
TOP EMPLOYER
INSTITUTE
certification retained in
United Kingdom and Germany
INVESTORS
IN PEOPLE
award for leadership
and management
>3 million kWh
of electricity generated
by our solar farms
of Group electricity
>78%
usage is from
renewable sources
1.9 million assets
processed by our
Circular Services division
617 tonnes
of reusable raw materials
generated through industrial
recycling
Computacenter plc Annual Report and Accounts 2022 | 39
Sustainability continued
Winning Together for our People and our Planet
Our Purpose is helping our customers change the world, and to support this we build long-term
trust with our customers, our partners, our people and our communities. We have been committed
for many years to a responsible Environmental, Social and Governance (ESG) approach, ‘Winning
Together for our People and our Planet’, which underpins Our Purpose. We recognise that the
long-term future of our company, our people and our planet relies on an enduring commitment
to sustainability.
This is a fundamental part of how we work day-to-day. We focus on the areas that are most
important to us and our stakeholders, and where we can make the biggest difference. The
strategy has three pillars (people, planet and solutions) and is underpinned by communication,
governance, standards and frameworks. Each area is owned by a member of the Group
Executive, which ensures alignment and accountability across the organisation, engaging
and empowering our people to achieve our sustainability objectives.
Sustainability strategy framework
WINNING TOGETHER FOR OUR PEOPLE AND OUR PLANET
PEOPLE
PLANET
SOLUTIONS
Supporting people and communities
Delivering positive social impact, with
a focus on our people.
Ensuring sustainable operations
Taking a responsible approach across
our operations, including our direct and
indirect environmental impact and
oversight of our supply chain.
Offering sustainable customer solutions
Helping our customers with their
sustainability goals through our
service offerings with a focus on
Circular Services.
Executive owner: Sarah Long,
Chief People Officer
Executive owner: Tony Conophy,
Group Finance Director
Executive owner: Mo Siddiqi,
Group Development Director
COMMUNICATION
Communication across all stakeholder groups and channels.
Executive owner: Mo Siddiqi, Group Development Director
GOVERNANCE
Underpinning accountability, investment plan, compliance and reporting.
Executive owners: Tony Conophy, Group Finance Director and Mike Norris, Chief Executive Officer
STANDARDS AND FRAMEWORKS
40 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Standards and frameworks
Our Sustainability strategy is aligned to the global standards and frameworks below that are essential for compliance or most relevant to our key
stakeholders. In addition, we align to other standards and initiatives as appropriate in specific countries.
United Nations Global Compact (UNGC)
Computacenter has been a proud signatory of
the UNGC since 2007 and we are committed to
supporting its 10 core principles and embedding
them within our supply chain.
Principles 1-6 cover human rights and labour,
supported through our people-related policies
within the ‘people’ section on page 42.
Principles 7-9 cover the environment, and we
discuss these further in the ‘planet’ section of
our Sustainability section on page 46.
Principle 10 covers anti-corruption and our
zero-tolerance approach to bribery and
corruption and is addressed on page 53.
EcoVadis
EcoVadis is a sustainability framework that is
frequently selected by our customers and
partners, and which we have also chosen to use
as a key benchmark.
We have achieved both silver and gold EcoVadis
ratings in our operating countries. We use the
ratings to help inform our key sustainability
initiatives and expect to continually improve our
ratings in the coming years.
Science Based Targets initiative (SBTi)
Computacenter has committed to this standard
for carbon reduction plans aligned to the Paris
Agreement, committing to limit the global
temperature rise to 1.5°C above pre-industrial
levels. Our SBTi submission is expected to be
validated by mid-2023.
Task Force on Climate-related
Financial Disclosures (TCFD)
This is a mandatory reporting requirement and is
covered in detail on page 54.
Carbon Disclosure Project (CDP)
We participated in the CDP and have a score of B,
an improvement on our C rating of the previous
year. We continue to target further improvements
in our rating.
Procurement Policy Notice submission
As a supplier to the UK Government, we are required to have a robust and documented carbon reduction plan. We therefore made the necessary Procurement Policy
Notice submission during 2021 and update it annually. This is part of a broader pattern of public sector customers adding criteria for companies to meet, in order to
remain eligible to supply goods or services to them.
UN Sustainable Development Goals
We focus on where we can take
meaningful action aligned to nine
of the UN Sustainable Development Goals:
Ensure healthy lives and promote wellbeing
for all at all ages
We will support the mental and physical wellbeing
of our employees by ensuring that our people have
quality working lives and feel safe and protected.
Promote sustained, inclusive, and sustainable
economic growth, full and productive employment,
and decent work for all
We will maintain high standards of employment for
our people and will work with our supply chain to build
resilience and decent work.
Ensure sustainable consumption
and production patterns
We will work with our technology vendors and
customers to promote sustainable technology
sourcing, supported by our own Circular
Services solutions.
Ensure inclusive and equitable quality
education and promote lifelong learning
opportunities for all
We will work to remove barriers that exist in our
local societies, creating employment, training and
educational opportunities.
Build resilient infrastructure, promote inclusive and
sustainable industrialisation, and foster innovation
We will act responsibly as a business to make
a positive impact within our industry and wider
communities.
Take urgent action to combat climate change
and its impacts
We will continue to take action to reduce our climate
impacts, both direct and indirect, aligned to Science
Based Targets.
Achieve gender equality and empower
all women and girls
We will continue to work towards achieving a
balanced gender mix in a male-dominated industry.
Reduce inequality within and among countries
We will continue to foster an environment which
enables employees to speak openly and ensure they
have the knowledge they need to promote a positive
and inclusive environment for all.
Promote peaceful and inclusive societies for
sustainable development, provide access to
justice for all, and build effective, accountable,
and inclusive institutions at all levels
We will continue to be an ethical business while
being mindful of the impact we can have on
people and communities.
Computacenter plc Annual Report and Accounts 2022 | 41
Sustainability continued
PEOPLE
Our business is about technology.
But first of all, it’s about people.
With over 20,000 employees across 23 countries,
and an average length of service of seven years
across the Group, our ambition as an employer
is to attract, retain and develop the best talent
in the market to deliver service excellence for
our customers.
8.73%
increase in women
leaders since 2020
4,500+
new people hired
82,000
candidate applications received
Special recognition
award for
WELLBEING
Inspiring Workplaces
EMEA 2022
TOP EMPLOYER
INSTITUTE
CERTIFICATION
retained in United Kingdom
and Germany
Rated by Glassdoor
as one of the
50 BEST
COMPANIES
to work for in the United Kingdom
Rated by Kununu in the
TOP FIVE PER CENT
of companies in
Germany
INVESTORS
IN PEOPLE
award for leadership
and management
42 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Fostering engagement
We know that engagement is key to our
success and that highly engaged employees
help us deliver better outcomes for our
customers. We have several forums for
engaging with our people including Works
Councils in seven countries across Europe,
a UK National Forum, 13 recognised trade
unions, and over 200 elected employee
representatives. In other countries the
employee voice is represented by people
panels and employee groups.
Ros Rivaz is our nominated Non-Executive
Director aligned to our people and regularly
engages with employee groups from across
the business, reporting feedback and insight
directly to the Board.
Group employee engagement survey
Our comprehensive global employee survey
reviews all aspects of how our people feel
about working at Computacenter. The survey
is undertaken every two years, most recently
at the end of 2021, and enables our managers,
supported by the Human Resources (HR)
team, to develop action plans for their specific
areas. Using this feedback from our people,
we have completed over 1,300 improvement
actions during 2022 across the Group.
Winning together days were a key part of our
ongoing engagement programme during
2022. Held every month during the last
quarter, in every country on the same day,
winning together days brought people
together in our offices to connect, collaborate
and engage. We encouraged our people to be
together to learn and have fun, creating that
energy we get from being together, and
allowing those who joined us during the last
two years an opportunity to experience the
in-person Computacenter culture.
Developing leaders
Our leaders are our role models, stewarding
our responsible business for the long term.
Our values underpin our leadership principles
of collaboration, inclusion, an open mindset,
innovation, and leading as a coach, and guide
our leadership recruitment and development
programmes. During 2022 our leaders
completed over 1,000 development courses,
with our overall approach to leadership
development being recognised in the United
Kingdom by the Investors in People award for
leadership and management.
Attracting talent
Talent acquisition
In an extremely competitive talent market
across the globe, we have continued to build
our team, hiring over 4,500 new starters in
2022, with particular growth in Germany,
India, the United Kingdom, the United States
and South Africa.
These achievements were made possible
by developing capability and building more
experienced teams through insourcing
contracts, team development and employer
branding awareness campaigns. As a result,
we were able to increase our global
application numbers again by more than
60 per cent, to approximately 82,000.
We have continued to receive external
recognition, including:
• Reaccreditation by Investors in People in
the United Kingdom to silver level.
• Being rated by Glassdoor as one of the
50 best companies to work for in the
United Kingdom.
• Being ranked in the top five per cent of
companies on Kununu, a German employer
rating platform.
Future Talent 2022
Our Future Talent programmes develop the
next generation of professionals through an
innovative, focused and flexible approach to
apprenticeships, industrial placements and
graduate programmes. In 2022, we increased
our intake across these important early-career
programmes, with 447 hires across four
countries, of which 36 per cent were women.
Talent management and learning
Development of our people remains an
investment focus, to ensure we provide
continuous growth opportunities for them.
Our learning culture means we ensure
that our people engage in continuous,
career-long development.
• Future Focus, our continuous performance
management tool, allows employees to
drive their own development plans with
the support of their managers. This has
assisted us in supporting our people with
their achievement of over 4,000 technical
certifications in 2022.
• Career pathways provide guided learning,
built around the skills and competencies
required for each role, allowing our people
to grow individually as they develop
their careers.
Our development programmes and pathways
contributed to over 1,500 internal promotions
in 2022.
I’m a big advocate of lifelong
learning and have really
benefited personally from career
mobility within Computacenter
over the course of my own
career. No matter where you are
in your career, chances are you
will need some support for the
next step – pathways can show
you the way!
Pierre Hall
Professional Services and
Technical Resources Group Director
Computacenter plc Annual Report and Accounts 2022 | 43
Sustainability continued
PEOPLE continued
Diversity & inclusion (D&I) and wellbeing
At Computacenter we define our approach to
D&I in the following way:
• Diversity: Making sure that all our systems
and processes, and our organisational
culture, allow us to attract, retain and
promote diverse talent.
• Inclusion: Creating a working culture where
everyone can be themselves, where they
are valued, respected, and supported to
reach their full potential and have a sense
of belonging.
In our last employee survey, we achieved
positive inclusion results, demonstrating that
our people believe we support equality of
opportunity and that they can be themselves
at work.
In November, we were delighted to welcome
René Carayol as an Independent Non-Executive
Director. René’s extensive inclusive leadership
work will help shape and guide us as we further
develop our D&I programmes.
Our Equality and Respect at Work policies
support our commitment to zero tolerance of
discrimination relating to someone’s personal
attributes, including race, colour, religion,
sex, sexual orientation, gender identity or
expression, national origin, age, disability,
marital status, pregnancy, citizenship, genetic
information, socio-economic status, caste or
any other personal characteristic, trait or
status that is protected by law. Any concerns
can be raised through our in-country grievance
processes or in accordance with the Group
Speak Up (whistleblowing) policy.
Equal opportunity at Computacenter extends
to all aspects of the employment relationship,
including hiring, promotions, working conditions,
compensation and benefits. As detailed in our
Recruitment and Pay policies, all decisions are
made using objective standards based on
qualifications and experience as they relate
to the role.
To focus our D&I work we target six pillars
developed by our people, ranging from gender
and culture to life balance. Our dedicated D&I
manager works closely with our HR managers
and business partners to embed D&I into our
people plans. During 2022, we continued our
journey around D&I by embedding conversations
about diversity and inclusion into everything
we do, through training and learning
opportunities, events and communications,
and our policies.
Highlights include our ‘Inclusion Series’
webinars, providing a forum for our people to
share and learn about a focus topic, including
Generations and Pride. We also piloted new
inclusive leadership training, focusing on
making inclusion real, and building and
fostering an inclusive culture.
Being a woman in engineering is very rewarding – it gives
you a great sense of accomplishment when you fix something.
I wish I could have got into IT at a younger age. Engineering
is so much more than ‘switching it off and on again’.
Danielle, Customer Engineer, Technical Resources Group North
We are committed to ensuring that our
disabled employees have equal access to
opportunities. We have improved our data
systems, enabling us to analyse disability-
related recruitment trends in each location and
identify areas for improvement.
• In the United Kingdom, as a Disability
Confident Employer, we are committed to
ensuring our recruitment process is
inclusive and accessible.
• In France, we work with the Association
de Gestion du Fonds pour l’Insertion
Professionnelle des Personnes Handicapées
(AGEFIPH), which promotes the employment
of people with disabilities in France, to
improve our disability policy.
• In Germany, we work with the Federal
Employment Agency to ensure that all
open vacancies are posted on its job board
and are accessible to disabled people.
Our internal severely disabled committees
(SBV) are informed and are involved in
the application process of applicants
with disabilities.
Gender diversity
Computacenter is passionate about
encouraging more women to join our industry,
and supporting our women employees to reach
their goals and role model the possibilities for
future generations. In support of this we have
developed specialist personal and leadership
development opportunities:
• Our Growing Together programme supports
this for our mid-level women employees.
The programme focuses on networking,
engagement and education. Over 130
women employees have participated in this
programme so far, and further cohorts are
already planned for 2023.
• Our Leading Together programme,
supporting our most senior women (those
that operate at two levels below the Group
Executive) from across North America, the
United Kingdom, France and Germany, saw
a cohort of 11 participants in 2022.
We are building a strong pipeline of women
talent who are empowered and equipped to
play a significant role in the leadership of
our business.
We sponsor a number of awards and events
to help influence the industry in this space,
including FDM Everywoman in Tech, CRN Women
in Channel and The Athena Hackathon. We are
extremely proud that we have continued to
receive recognition of our brilliant women
talent at the CRN Women in Channel Awards
2022 and were again named as a top employer
for women in Germany by Brigitte magazine.
Our focus on balancing gender diversity is
evidenced by the progress that we made
in 2022. 57 per cent of our most senior joiners
were women during the year.
The table below shows our gender diversity at the year end:
Board
Senior managers
Other employees
Total
2022
Women
3
34
5,495
5,532
Men
6
83
14,476
14,565
2021
Women
3
28
4,726
4,757
Men
6
94
13,135
13,235
44 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Wellbeing
Computacenter is dedicated to creating a
workplace that promotes positive physical
and mental wellbeing; this is a critical
component of how we support our employees,
with the importance of this coming to the
forefront during the global pandemic. Our
strategy for wellbeing encompasses
immediate support as well as long-term
positive and preventative approaches, to help
our people at work and at home.
We have an Employee Assistance Programme
in each country, enabling our people to access
specialist wellbeing support with over 3,000
fitness, nutrition, and health and wellbeing
courses through the Humanoo ‘Be Well’
mobile app.
Our Healthy Leadership training for managers
provides expert advice and guidance on how
to identify signs of individual and team stress
and look after the wellbeing of their team.
A new Advanced Healthy Leadership training
module is currently being developed.
Computacenter is also part of the National
Forum for Health and Wellbeing, a UK charity
that specialises in helping local communities
take more responsibility for protecting and
managing their own health.
We were proud to have received a special
recognition award for wellbeing at the
‘Inspiring Workplaces EMEA 2022’ awards.
We were also pleased to have attained
‘Achieving Change’ status in the Mind Wellbeing
Index 2022.
Employee Impact Groups
We want our people to have the opportunity
to influence and create a working culture they
are proud to be part of. Our Employee Impact
Groups (EIGs) give employees the opportunity
to help shape and drive sustainable change.
Our first EIG focuses on ethnic diversity in the
UK. In 2022, it led a wide range of activities
including a ‘Breaking Barriers’ event, co-hosted
with CRN, where 195 professionals from the
sector joined expert speakers and industry
leaders to share advice and best practice in
making our industry more inclusive to people
from ethnic minority backgrounds.
We are creating country-specific EIGs focusing
on in-country priorities such as gender and
wellbeing. Each group has an Executive sponsor
aligned with representation from all areas of
the business.
Supporting communities
We recognise the importance of delivering
social value for our communities and we
support our people to take part in activities
where they can make the most difference.
Reward and recognition
Pay for performance is at the heart of our
reward philosophy, and we align remuneration
with each employee’s contribution while
meeting applicable legislative requirements,
including national minimum wages and equal
pay. Pay reviews are undertaken annually for all
Group employees as detailed in our Pay Policies.
Our global recognition tool ‘Bravo!’ helps us to
foster a high-performance culture through
recognising and rewarding one another’s great
performance. It has been a crucial component
of employee engagement since March 2020, and
we were proud that the scheme was shortlisted
in the Employee Benefits Awards 2022 for ‘Best
motivation or recognition scheme’.
Bravo! provides a platform to enable instant
peer-to-peer recognition. Employees can
nominate colleagues for awards, recognising
exceptional performance. In total, 12,500
Bravo! awards were issued in 2022, including 16
gold awards, which represent the highest-level
of global recognition with the recipients
selected by a panel of senior managers.
The scheme also allows employees to donate
the value of their rewards to one of our
chosen charities.
Supporting our people through economically
turbulent times
In addition to our annual pay awards made in
January each year, we applied a further one
per cent pay increase globally to employees in
April 2022 and our pay planning for 2023 has
ensured that we focus attention to gear
awards to the lower paid in our workforce. Our
approach to wellbeing, diversity and inclusion
and our policies have been updated in line
with the ‘Business in the Community’ guidance
to ensure that we are doing what we can
during these turbulent times to support our
people, including financial awareness and
support training.
We are also committed to support for our wider
communities and re-signed the United Kingdom
Armed Forces Covenant, achieving Bronze in
the United Kingdom’s Defence Employer
Recognition scheme in 2022. In the United
Kingdom we are recognised as an armed
forces friendly employer.
Inspiring future generations
To attract diverse talent, we continue to
run outreach programmes with schools,
universities and charities, promoting
awareness of women in technology, attracting
minority ethnic talent, people with disabilities,
and young people from disadvantaged
backgrounds. In addition, we offer a unique
mentoring programme and career changer
programme for women candidates interested
in technology roles.
Over 140 employee volunteers in the UK
supported our educational outreach
programme, Bright Futures, during 2022,
reaching over 34,000 students and young
adults. The Bright Futures mission is to support
the next generation of young people by
inspiring them to follow a career in technology.
Working with charities
We support initiatives to raise money for
charities, including activities proposed and
run by our employees. We achieve fundraising
through donations, events and Give as You
Earn options.
Some of the highlights from 2022 include:
• Over 40 charities donated to through our
company supported fundraising activities
and donations.
• £37,000 donated to Unicef in connection with
the ‘CC Big Walk’ wellbeing challenge.
• £65,000 donated to the Disaster Emergency
Committee Ukraine appeal.
• Local volunteering activities including food
bank donations in the United Kingdom, beach
clean-ups in North America and the donation
of provisions for Ukraine.
Computacenter plc Annual Report and Accounts 2022 | 45
Sustainability continued
PLANET
Ensuring sustainable
operations
We have a longstanding commitment to
sustainable operations and take a responsible
approach to reducing our direct and indirect
environmental impacts.
We continued to make good
progress towards our Net
Zero goal, with a further
reduction of 15 per cent in
our Scope 1 and 2 carbon
emissions in 2022.
Tony Conophy
Group Finance Director
>78% of Group electricity
usage is from
renewable sources
Computacenter became
Carbon neutral
(Scope 1 and 2) in 2022
>3 million kWh
of electricity generated
by our solar farms
Our targets
Target
Timing
Status
Carbon neutral for Scope 1 and 2
2022
50 per cent reduction in
Scope 3 emissions
from 2021 baseline
2032
Net Zero for Scope 1, 2, and 3
2040
Complete
Achieved through increases in our own renewable energy generation, continued
investment in energy efficient solutions, increasing the use of renewable energy sources
and carbon offsetting credits.
On Track
Scope 3 emissions include all other indirect emissions, such as our business travel and
transportation, as well as those from sources that we do not own or directly control,
including our supply chain which constitutes most of our Scope 3 emissions.
On Track
Computacenter has committed to this standard for carbon reduction plans aligned to
the Paris Agreement, committing to limit the global temperature rise to 1.5°C above
pre-industrial levels. Our SBTi submission is expected to be validated by mid-2023.
46 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Emissions performance over time (metric tonnes)*
Results
Total Scope 1 and 2 emissions
Per £1 million of gross invoiced income
Per employee
2016
25,518
6.94
1.68
2017
22,662
5.97
1.62
2018
19,741
4.54
1.31
2019
19,808
3.92
1.25
2020
13,856
2.55
0.83
2021
5,210
0.75
0.30
2022
4,416
0.49
0.24
*
Certain prior-year numbers have been recalculated in line with our latest chosen intensity measurement methodologies.
Our commitment is demonstrated by the
targets that we have set for ourselves, and
through the initiatives that we have established
as part of our Sustainability strategy under
the guidance of our Climate Committee.
• We will regularly review and refine our
roadmap based on Science Based Targets,
to ensure that the evolution of standards
in this area is reflected in the initiatives
we prioritise.
Our Climate Committee meets at least four
times each year and leads our approach to
reducing our environmental footprint. It is
chaired by the Group Finance Director and
includes Group managers and senior
employees with specific environmental
interests. The Committee debates and
proposes initiatives, with material
investments then approved at Group
Executive level and communicated through
our Sustainability communications
framework.
Our roadmap to achieve Net Zero in 2040 is
underpinned by Science Based Targets and
includes the following initiatives:
• Continued investment in renewable energy,
self-generating power solutions and
reducing consumption through both
implementing better technology products
in our own environment and enhancing the
efficiency of our facilities.
• Managing a continued reduction in Group
travel through a mixture of incentives,
travel levies and technology-supported
hybrid working and collaboration.
• Working with our technology vendors on
their own journey to Net Zero, to ensure that
the products we purchase for resale do not
increase our carbon footprint. Most of our
technology vendors are among the global
leaders in the industry and share our
commitment to Net Zero.
• Working with our wider supply chains to
ensure they are aligned to our 2040 target
and hence reducing emissions in areas
such as transportation.
• Utilisation of our Circular Services
operations to avoid carbon consumption
with the reuse of technology assets and
extraction of raw materials through
redeployment, remarketing and recycling.
• Widening the adoption of our Circular
Services portfolio with our customers,
to enhance their carbon avoidance.
• Offsetting remaining emissions that cannot
be removed using accredited Gold Standard
(GS) carbon removal schemes. The GS is a
voluntary carbon offset programme
focused on progressing the United Nation’s
Sustainable Development Goals and
ensuring that projects benefit their
neighbouring communities.
Energy usage
In 2022, the Group consumed 9.7 million kWh
of Scope 1 energy (United Kingdom operations:
2.8 million kWh), up from 9.3 million kWh
(United Kingdom operations: 3.7 million kWh)
in 2021. It also consumed 35.8 million kWh of
Scope 2 energy (United Kingdom operations:
17.5 million kWh), down from 38.5 million kWh
(United Kingdom operations: 19.2 million kWh)
in 2021.
We have benefited from electricity generation
from our solar panel installations in Hatfield,
United Kingdom, Kerpen, Germany, and, more
recently, the 2022 installation in Livermore,
California.
While travel remains an unavoidable part of
conducting business, all trips are considered
both in terms of their necessity and the
associated carbon emissions impact of the
chosen travel plan.
• We introduced a travel levy in 2021 for all
flights and hotel bookings across the Group,
the proceeds of which are used to offset
the travel element of our Scope 3
emissions. From October 2021 to December
2022, we generated c. £280,000 from the
travel levy.
• When employees book flights they can see
the associated carbon emissions on the
flight booking system.
• We implemented a programme in Germany
to substitute internal flights with first class
train travel, as the national railway
company Deutsche Bahn achieves Net Zero
emissions through offsets.
In total we generated over 3 million kWh of our
own electricity in 2022, avoiding 1,254 tonnes
of annual CO2e.
• We continue to install electric vehicle
charging points at our sites as demand
increases.
In addition to generating our own electricity,
we source renewable energy for our
operations in the United Kingdom, Germany,
Spain and the United States. In total, we
consumed 24.9 million kWh of renewable
energy in 2022, avoiding 10,847 tonnes of
annual CO2e.
We continue to find ways to reduce our energy
usage, including enhancing the energy efficiency
of all new and refurbished facilities and
choosing office equipment solutions such as
PCs and peripherals with reduced power usage.
Travel
We have a target to reduce emissions from
business travel by up to 35 per cent by 2025,
compared to the baseline in 2019. While the
target remains challenging to achieve given the
Group’s growth, we continued to progress
towards it in 2022, achieving a 50 per cent
reduction in carbon emissions from flights and
hotel rooms compared to the 2019 baseline.
Materials usage
Materials include the packaging we use in our
Integration Centers and the packaging our
technology vendors use when transporting
goods to us. This category also includes items
we mail and our use of single-use plastics.
• Some manufacturers supply cardboard-
based internal packaging and have
significantly reduced their plastic content.
• Nearly all plastic bags are now either
retained to be re-used or separated and
collected for dedicated plastics recycling.
• We regularly hold discussions with our
technology vendors about their use of
packaging materials, and are exploring
improved models for our own packaging
solutions.
• We send as little waste as possible to
landfill and closely monitor recycling
performance for materials such as plastics,
paper and cardboard.
Electricity generated by our own solar installations
kWh of renewable energy (million)
Established
2022
Hatfield, United Kingdom
Kerpen, Germany
Livermore, California
2020
2021
2022
1.7
1.1
0.25
2021
1.8
0.03
n/a
Computacenter plc Annual Report and Accounts 2022 | 47
Sustainability continued
PLANET continued
e-invoicing and pre-printed stationery
We send around 100,000 sales invoices each
month. In general, the need for printed
materials and documents has significantly
reduced as they have been replaced with
electronic systems and collaboration tools
• In excess of 90 per cent of our UK invoices
are sent electronically.
• 88 per cent of our German invoices are
sent electronically.
• Pre-printed stationery production has
ceased across most of the Group.
These measures increase efficiency, reduce
cost and reduce our environmental impact.
Energy-efficient lighting and equipment
All new offices have enhanced energy
efficiency as standard.
Refurbishment and upgrade activities
across all locations are subject to efficiency
planning to contribute to a reduced
environmental impact.
Greenhouse gas (GHG) emissions
The Group is required to state the annual
quantity of emissions from its activities, in
tonnes of carbon dioxide equivalent, which
can be found below. Further details of our
environmental policies and programmes
can be found on our corporate website:
computacenter.com.
Global GHG emissions
(metric tonnes of CO2e)
Scope 1
Scope 2
Total
2022
1,979
2,437
4,416
2021
2020
1,908
5,640
3,302
8,216
5,210
13,856
Scope 1 includes: combustion of fuel and
refrigerants loss. Scope 2 includes: electricity,
heat, steam and cooling purchased for
own use.
Scope 1 and 2 emissions fell from 5,210 metric
tonnes of CO2e in 2021 to 4,416 metric tonnes
in 2022, a reduction of 15 per cent.
The Group’s UK operations accounted for
29 per cent of the Group’s Scope 1 carbon
emissions (36 per cent in 2021), and zero per
cent of the Group’s Scope 2 carbon emissions
in 2022 (14 per cent in 2021).
The Group’s chosen intensity measurements
for emissions as reported above are:
• 0.49 metric tonnes per £m of gross invoiced
income (2021: 0.75 metric tonnes),
a reduction of 34.9 per cent.
• 0.24 metric tonnes per Group employee
(2021: 0.30 metric tonnes), a reduction of
20.0 per cent.
Logistics
We use logistics services to deliver products
to our customers. Minimising the
environmental footprint and the cost of these
services requires us to employ the Integration
Center nearest to the customer’s premises.
As previously noted, we have negotiated with
many UK customers to fulfil deliveries to their
EU operations from Kerpen rather than
Hatfield. This has the additional benefit of
avoiding post-Brexit challenges at the border.
We are working with our various logistics
suppliers to ensure that they are maximising
the impact of their own sustainability
strategies through, for example, the use
of low emissions vehicles.
While direct shipping from technology vendors
can be used where appropriate, the efficiency
of our Integration Center model, and our
ability to manage stock availability, packaging
waste, equipment configuration and
staging activities consistently across our
Integration Centers, ensures efficiency and
minimised environmental impact, and
remains the preferred choice of many of our
international customers.
Methodology
This activity has been conducted as part of
our UK EMS ISO 14001:2015 standard (EMS
71255). We have used the main requirements
of the GHG Protocol Corporate Accounting and
Reporting Standard (revised edition). Emission
factors used are from the UK Government’s
Conversion Factors supplied by Department
for Environment, Food & Rural Affairs (DEFRA).
We have different factors for each country,
as electricity generation and CO2e efficiency
vary by country. External consultants assisted
with the implementation of our methodology
which we continue to further refine and
develop internally, to include the full
requirements to collate the additional
emissions, such as refrigerants.
We have reported on all the emission sources
required under the Companies Act 2006
(Strategic Report and Directors’ Reports)
Regulations 2013. Group properties included
in this report are all current locations in the
United Kingdom, Germany, France, Belgium,
Spain, South Africa, United States, Canada,
Switzerland, Malaysia, Hungary, Mexico, India,
Poland, and the Netherlands.
Limitations to data collection
Less than 5.0 per cent of emissions were
estimated or based on an average energy
usage per square foot of space occupied.
Environmental policy
The Group has an environmental policy,
which we enact through an Environmental
Management System (EMS) certified to
International Management standard BS EN ISO
14001:2015. The environmental policy requires
us to identify our significant environmental
impacts and provides the framework for
setting targets and objectives. We are not
aware of any breaches of the policy in 2022.
Packaging waste regulation
Computacenter UK is registered as a
distributor of product via the compliance
company Paperpak, ensuring we have fully
complied with this regulation since 2000.
Energy Savings Opportunity Scheme (ESOS)
Computacenter complied with this legislation
by submitting its energy report, which
covered the period 1 April 2018 to 31 March
2019. The next submission is required in 2023.
RESPONSIBLE BUSINESS
Health and safety
We are committed to providing safe and
healthy workplaces. Our policy is that, so far
as is reasonably practicable, we will create
and maintain an environment that is
committed to eliminating or reducing health
and safety risks to employees, customers,
suppliers, contractors, visitors and members
of the public.
Our approach to health and safety is based on
identifying and controlling hazards and
preventing incidents, particularly those
involving personal ill-health, injury and
damage to equipment or property. We also
investigate near misses, as an essential part
of preventing future incidents.
It is vital that everyone concerned is made
aware of their responsibilities for
implementing our health and safety policy.
All line managers are required to ensure that
the policy is implemented within their areas
of responsibility and employees must take
reasonable care of their own health and
safety, and that of others who may be
affected by what they do. Failing to observe
the policy can result in disciplinary action.
We have continued to support our people in
workplaces by providing appropriate face
masks, cleaning materials and hand
sanitisers throughout these facilities. The
table opposite shows the health and safety
performance of our United Kingdom, Germany,
and France businesses. The Accident Incident
Rate (AIR) is the number of accidents per 1,000
employees and the Accident Frequency Rate
(AFR) is the number of accidents per 100,000
working hours.
48 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Health and safety statistics
United Kingdom
Germany
France
AIR
2022
1.05
2.69
2.45
2021
0.87
1.99
0.69
AFR
2022
0.19
0.16
0.45
2021
0.87
1.99
0.69
We have continued to offer health and safety
training, for example covering display screen
equipment, manual handling, environmental
awareness, and safe driving. The Group has
continued to comply with all relevant health
and safety legislation in all the countries in
which we operate. This is monitored using
appropriate tools, controls and measures,
which form part of our overall compliance
management system.
Supply chain
We work with a diverse set of suppliers, who
play a key part in the success of our business.
When selecting suppliers, we ensure that our
terms of engagement are clear and that they
support both our Group values and our wider
sustainability objectives.
Onboarding of suppliers for most countries
is managed by the Supplier Contract
Management team. The team uses a
standardised onboarding process, which
from 2022 is underpinned by a new supplier
management platform to drive greater
consistency, automation and visibility. Among
other things, this validates that the request to
add the supplier complies with our Business
Ethics Policy, obtains a supplier self-
assessment on several topics, including
sustainability issues, and highlights to
prospective suppliers key Computacenter
policies, such as IT Security, Anti-Bribery and
Corruption and our recently updated Supplier
Code of Conduct. This code of conduct sets
out the 10 principles in the UNGC, which
include human rights, modern slavery,
anti-bribery and corruption, and environmental
matters. Suppliers are asked to sign up to our
Code of Conduct, or confirm that their own
ways of working align with the code.
Human rights and modern slavery
Our commitment to human rights means we
have adopted the principles of the leading
international standards and conventions
across our business dealings, in particular the
UN Global Compact (signatories since 2007),
the Universal Declaration of Human Rights, the
UN Guiding Principles on Business and Human
Rights, the UN Conventions on Rights of the
Child, and fundamental conventions of the
International Labour Organization (ILO), and
understand our responsibility to respect and
support human rights. For Computacenter,
our human rights considerations fall within
two areas: (i) protecting the rights of our
employees and, (ii) ensuring that we are not
complicit in human rights abuses within our
supply chain.
The human rights of our employees are
addressed by our people policies and our
understanding of and compliance with local
labour laws wherever we do business. This
also includes our Health and Safety, Respect
and Equality at Work policies, and our
disciplinary and grievances processes.
In addition, our Group Ethics Policy sets out
our commitment to observing the highest
ethical standards in our business conduct
as these relate to the rights and treatment
of individuals.
In relation to our supply chain, we progressed
throughout 2022 with the implementation of
an industry-recognised and dynamic
third-party due diligence system. Since the
system went live in 2022, new suppliers within
our larger countries have progressed through
the advanced due diligence process that this
has enabled. In our North American business,
all suppliers and partners are assessed
through an equivalent system. The due
diligence systems enable the collection of
comprehensive vendor due diligence prior to
their inclusion within our supply chain. Issues
arising are referred to Group Compliance. One
of the areas covered in the due diligence
conducted focuses on human rights and
modern slavery-related risk.
In addition to our due diligence activities, all
potential suppliers are required to comply
with our Supplier Code of Conduct, which
clearly sets out our requirements within both
the modern slavery and wider compliance
environment and outlines standards that we
require of our suppliers within their business
operations. As part of the Code of Conduct,
suppliers are required to notify
Computacenter of any breach of these
standards and to take appropriate steps to
remedy them.
Our Group Speak Up (whistleblowing) policy
explains how our people can report any
concerns they may have through our
externally provided, independent hotline. This
is included in our Supplier Code of Conduct and
enables the reporting of any suspected
modern slavery, or other human rights issues
within our supply chain, on an anonymous
basis if requested. Any concerns raised are
fully investigated, with oversight from the
Director of Group Legal and Compliance and
Chief People Officer. In 2022, there were no
issues within the Company that related to
modern slavery or human trafficking
amongst our people or in our supply chain.
Anti-bribery and corruption
Computacenter has a well-established
anti-bribery and corruption compliance
framework. This is underpinned by our Ethics
Policy which, together with specific Anti-
Bribery and Corruption and Fraud policies,
provides a clear set of rules and expectations
that are applied across our business. This is
supported by employee training, guidance
documentation, further role-based training,
and communications. The framework is
overseen by the Group Legal and Compliance
Director and our Compliance Steering
Committee. It is regularly audited by our
Internal Audit function. The framework is
supported by the externally managed,
confidential whistleblowing hotline provided
by Safecall, an industry-recognised provider
of such services, available to our people and
supply chain.
We continued to reinforce our zero-tolerance
approach to bribery and corruption
throughout 2022, providing training as an
integral part of our induction process and
ensuring continued awareness of our
whistleblowing hotline across the Group.
This ensures that all employees, contractors,
third parties and suppliers know that they
can report any issues on a confidential basis.
No material breaches of our policies were
identified during the year.
To ensure that our compliance strategy
remains appropriate for counterparties
within our supply and value chain, we have
implemented due diligence procedures in this
area that reflect the risks of doing business
with a particular counterparty or in a
particular location or sector. We have a
process for proposed activities in new
countries that assesses countries against
the Transparency International Corruption
Perceptions Index for prevalence of corrupt
practices, to ensure that our compliance
framework in this area is appropriate for any
new operations. We have, as part of a wider
initiative, introduced a due diligence tool into
our supplier onboarding process within larger
countries. In addition, we have introduced a
process, operated by our United Kingdom and
EU trade compliance teams, that gathers
additional due diligence information in
relation to specific customers with links to
certain countries and individuals.
Computacenter plc Annual Report and Accounts 2022 | 49
Sustainability continued
SOLUTIONS
Offering sustainable
customer solutions
Our customers not only expect Computacenter
to be a sustainable supplier and partner but also
to help them to achieve their own sustainability
goals. Our activities here are in three areas:
Circular Services, Technology Advisory and Asset
Lifecycle Services.
112,028 tonnes
of carbon avoided through
reuse of assets (redeployment
and remarketing)
1.9 million assets
processed by our
Circular Services division
50 | Computacenter plc Annual Report and Accounts 2022
617 tonnes
of reusable raw
materials generated through
industrial recycling
Strategic Report Circular Services
In a traditional linear economy, goods are
made, used and then disposed of. The circular
economy means that we keep resources in
use for as long as possible, extract the
maximum value from them whilst in use,
then recover and regenerate products and
materials at the end of each service life.
Our subsidiary R.D. Trading Limited (RDC) is
responsible for our Circular Services offering.
The bedrock of the service is the audit,
data-wiping and safety testing of every
customer asset. Once in our system, the
circular journey can then begin, bringing to
customers the benefits, both financial and
environmental, of redeploying, remarketing
or recycling their old equipment. Putting
customer assets to good use elsewhere
within their business through redeployment
saves money and carbon against purchasing
new. Likewise, remarketing all functional
assets that are no longer required generates
cash, as well as reducing the carbon footprint
of third parties buying new. In addition,
recycling all the equipment that is too old or
damaged removes potentially harmful
materials from landfill, whilst extracting
metal and plastic products that can be reused
in manufacturing.
RDC has established a robust methodology for
accurately measuring and reporting on our
end-to-end recycling management approach,
with whole recycling facilities dedicated to
testing, measuring and filming of controlled
batches of our customers’ scrap, including
systems, screens, servers, networking
devices and printers. This has enabled us to
provide detailed records of metal, circuit
board and plastic material extracted from
the waste stream.
Combining redeployment, remarketing and
recycling with secure logistics and data
management into an integrated package is at
the core of Circular Services.
RDC’s capabilities are backed up by Circular
Services delivered in Germany from our
Kerpen Integration Center and recent
acquisition, ITL logistics. We extend these
capabilities with partners worldwide to align
with Computacenter’s international coverage.
Technology Advisory
Our role as both a trusted independent
technology advisor and provider of
Technology Sourcing for our customers puts
us in a unique position to help customers drive
their sustainability strategies through a
number of services across the entire lifetime
of an asset.
Selection of the most sustainable
technology products
As one of the world’s largest VARs, we work
with all the leading technology suppliers and
make available Electronic Product
Environmental Assessment Tool (EPEAT) and
EnergyStar energy usage ratings for the
products we supply to our customers, and
identify other sustainability metrics that help
to contribute to each customer’s specific
goals. We also work with customers to help
quantify the carbon footprint of their existing
deployed IT estate, enabling them to
understand and address the environmental
impact as part of future change and
deployment initiatives.
Supporting technology vendors
We work closely with our technology vendors
to understand their sustainability strategies,
help them to achieve their sustainability goals
and help our customers to make informed
decisions. We are proud to have been
recognised by HP as a Sustainability Partner,
and to have achieved the new Cisco Partner
Environmental Sustainability Specialized
in 2022.
Sustainable supply chain options
We are the VAR with what we believe to be the
best international capability in the world
and this allows us to help both our customers
and technology vendors to leverage our
Integration Centers in different regions for
local supply rather than export, where
possible. We still have work to do with both our
customers and technology vendors to further
minimise the need for export solutions, and
we continue to build the local capabilities to
support this objective.
Asset Lifecycle
We help our customers to deploy and manage
their technology assets in line with their
business needs and sustainability goals.
Sustainable deployment
We offer a range of services to allow
customers to deploy technology with the
minimum environmental impact. These
include our trolley and flight case services,
which allow us to deploy at scale in offices but
remove packaging from technology (laptops,
network devices and servers) at our
Integration Centers. These services increase
efficiency, reduce local engineering effort,
and provide environmentally friendly waste
disposal at scale.
2022 saw growth across our
Circular Services portfolio.
Customers cleared stores
of equipment maintained
during the pandemic, which
increased remarketing
revenues. There was also
a surge in demand for
international Circular
Services capability, which
has continued into 2023.
Gerry Hackett
Managing Director
RDC (a Computacenter company)
Ways of working for users
Technology is a huge enabler for our
customers to allow different ways of working
for their users. We provide workstyle analysis
to support the design of optimum solutions,
which include the use of our Tech Centers and
secure locker collection to minimise travel,
logistics and field force deployment. These
approaches can all contribute to a sustainable
hybrid working strategy and reduce the
environmental impact of IT service support.
Asset management
Using our SmartHub platform, we can provide
customers with better data about their assets
including length of life, configuration and
update status. This information enables
customers to make more informed choices
about redeployment and replacement, usually
extending the life of most assets covered.
Device as a Service
Our asset lifecycle services have been
brought together into our DaaS offering,
through which we manage the whole lifecycle
of assets for our customers. This service
leverages sustainability principles that help
our customers to address environmental
impact, risk management and efficient use
of their IT asset estates.
Computacenter plc Annual Report and Accounts 2022 | 51
Sustainability continued
Strategic Report
Annual Report and Accounts 2021
Braintree, United Kingdom
Braintree, United Kingdom
Our Circular Services Integration Center in Braintree is supplemented by facilities
Our Circular Services Integration Center in Braintree is supplemented
in Germany and partners worldwide.
by facilities in Germany and partners worldwide.
SOLUTIONS continued
By using our Circular
Services, including
redeployment,
remarketing and
recycling, our
customers can avoid
carbon emissions,
helping them on
their own journey
to Net Zero.
Gerry Hackett
Managing Director, RDC
(Computacenter subsidiary)
Redeployment
Remarketing
Recycling
REDEPLOYMENT
REMARKETING
RECYCLING
On-site data sanitisation
Technical processing
Secure transport
Secure environment
On-site data sanitisation
Technical processing
Secure transport
Secure environment
52 | Computacenter plc Annual Report and Accounts 2022
59
Strategic Report GOVERNANCE
Ethics and Compliance
Our approach to governance, ethics and
compliance helps us to maintain and monitor
a culture of high standards of behaviour to
achieve our long-term goals in a sustainable,
lawful, and ethical manner, allowing us to
maintain the trust of our customers and
employees alike.
It reflects our Winning Together Values, and
our focus on building and protecting value for
our stakeholders over the long term. We are
a dynamic and agile organisation dedicated
to serving the needs of our customers and
helping them to change the world. We enable
our people to respond flexibly and quickly in
their interactions with our stakeholders and
we view this as a key area where we can build
competitive advantage.
It is therefore critical that our people have
clarity and a good understanding of how
they should make decisions, the factors they
should consider when doing so, and how
they can ensure that their behaviour when
representing Computacenter accords with
our culture and the risk appetite of the
organisation, as set by the Board. Our people
are central to our growth and development as
an organisation. It is therefore incumbent on
us to ensure that we educate and inform them
through policy, guidance, training, and
communications that enable them to fulfil
their duties in an ethical, lawful, and
sustainable way.
Given the nature of our business as a
technology and services provider, our
customers trust us to act lawfully and with
integrity in all that we do. The way that we
behave reflects not only on Computacenter,
but also upon our customers. As part of our
commercial dealings, we often make
promises to them around compliance and
ethics. Our values require us to do all that we
can to keep those promises.
Our commitment to do the right thing extends
to those who produce goods or provide
services directly to us, or to third parties on
our behalf. This includes ensuring the integrity
of our supply chain. In 2022, we introduced a
comprehensive Supplier Code of Conduct
which will be approved by the Board moving
forward on a bi-annual basis, alongside the
Group Ethics Policy. It reflects our significant
growth, in size, complexity and geographic
location, and provides clear guidance for our
suppliers as to our expectations around the
way that they operate.
We adopt a Group approach and have identified
a number of key areas on a risk-assessed
basis. Through this we ensure consistency
and clarity across the organisation, with local
variations where required by law or other
relevant considerations.
Our approach aims to ensure that our people
are not only aware of their responsibilities,
but they understand how to apply these
within their day-to-day role and activities at
Computacenter. Communications and training
are critical in achieving this. In 2022, significant
progress was made in developing training
modules and related communications across
areas including anti-bribery and corruption,
modern slavery, whistleblowing, trade
compliance, data protection and cyber security.
Computacenter has a well-established
compliance framework. This is underpinned
by a complete set of Group-wide policies
covering our key compliance areas, providing
a clear set of rules and expectations and how
these apply across our business.
This is supported by mandatory employee
training, guidance documentation, role-based
training and multi-channel communications.
The compliance framework is overseen by the
Group Legal and Compliance Director and our
Compliance Steering Committee. It is regularly
audited by our Internal Audit function.
The success of our compliance framework is
assessed and assured continuously, with
e-learning completion rates monitored and
reported, access statistics to our compliance
collateral assessed regularly, and feedback
sessions conducted to ensure successful
messaging across our organisation.
The framework is supported by an externally
managed confidential whistleblowing hotline
provided by Safecall, an industry-recognised
provider of such services.
Safecall is available to our people and supply
chain, and provides an accessible, confidential
route to report concerns of wrongdoing.
We refer to the submission of a concern as
‘Speaking Up’ and we actively encourage our
people to Speak Up should they suspect
wrongdoing in the workplace, conducting
an annual multi-channel communications
campaign guiding employees towards the
Speak Up service in place. In addition, we
support our managers by providing them with
tailored guidance, to help them understand
their obligations when approached directly
with a concern.
Data privacy and cyber security
Robust compliance with core data privacy laws and regulations is fundamental to all Group operations and service delivery throughout the
jurisdictions in which we and our customers operate. Data protection leadership and centralised coordination is provided through our Group
Data Protection Officer, reporting into the Group Legal and Compliance Director. The Group Data Protection Officer is supported by a team of
experienced and qualified specialists across our key geographies, with governance provided by the Compliance Steering Committee and Risk
and Audit Committees.
Underpinning data privacy are extensive cyber security risk management and assurance practices and controls, jointly led by our Group Chief
Information Security Officer and Group Information Assurance Director. These controls are independently audited and certified through
continuous assessment, to the latest ISO/IEC 27000 framework of information security standards and controls. Governance is provided by the
C-Suite Security Steering Committee and Operational Security Management Groups, to ensure our services and customer data are well
protected and secure.
Our Group Information Assurance practice has continued to mature, with the full establishment of the in-house Security Operations Centre,
Cyber Security Engineering, Risk and Threat Intelligence teams. Equally, the recruitment of an executive Chief Information Security Officer
driving an evolving Cyber Security Strategy and the success of an award-winning ‘Be Ready’ cyber security training and awareness programme
demonstrate our ongoing commitment to keeping our ourselves and our customers safe.
Computacenter plc Annual Report and Accounts 2022 | 53
Task Force on Climate-related Financial Disclosures
Climate-related risks and opportunities
We support the aims of the Task Force on
Climate-related Financial Disclosures (TCFD)
in communicating the risks and opportunities
arising from climate change. In accordance
with the Financial Conduct Authority’s (FCA)
Policy Statement PS20/17, in this section from
pages 54 to 57 we are making disclosures
consistent with the TCFD’s recommendations
and recommended disclosures, having
considered all sector guidance. An exception
relates to Scope 3 emissions, for which we will
submit targets to the Science Based Targets
initiative (SBTi) during the first half of 2023.
We will build an action plan to meet these
targets once they have been validated by the
SBTi and work in conjunction with our
technology vendors and other suppliers to
obtain the necessary data.
Our Scope 1 and Scope 2 emissions for 2022
were subject to external verification in line
with ISO 14064-3. Our reported 2022
emissions will also be subject to external
verification.
Governance
As outlined on page 75, the Board has overall
responsibility for managing risks and
opportunities, including climate change risk.
The Board has considered the risk to the
business relevant to climate change but does
not yet believe it is sufficiently material in
relation to potential financial cost and
potential for disruption to the business to be
classed as a principal risk in its own right. The
Board continues to monitor climate-related
risk. It does so through its review of the
Group’s principal risks related to any failure
to meet our commitments or comply with
applicable laws and regulations in relation
to ESG matters.
The Board has delegated day-to-day oversight
of climate change risk to the Climate
Committee. This committee meets quarterly
and leads on all climate-related initiatives. It is
chaired by the Group Finance Director. Other
members include the Head of Facilities, the
Managing Director of our Circular Services
business (RDC), the Environmental Coordinator,
Head of Insurance, Climate & Property, the UK
Fleet Manager as well as representatives from
Group Service Lines Human Resources,
including representatives from Germany,
France and Spain. During 2022, the Climate
Committee considered the following topics:
• Physical exposures of buildings and
infrastructure
• Internal travel levy and carbon offsetting
proposals
• Travel pilot in Germany to encourage the
use of rail over flights
• Net Zero strategy
• Circular Services
• Technology Sourcing initiatives
• SBTi and CDP submissions
• Waste targets
• Self-generated power
• Renewable energy purchases
• Fleet CO2 emissions
• International Sustainability Standards
Board proposals
The Group Risk Committee (GRC) considers
emerging risks, such as climate change, when
required. The Audit Committee is updated
quarterly on discussions and outcomes from the
GRC meetings and the Board is formally updated
at least annually on all risk matters through
a review of the Group Risk Log and related
discussion, including climate-related issues
where relevant. The Board has also endorsed
the Group’s Sustainability strategy, of which
risk management and reporting form a part.
The Board
Regular
reporting
Delegated
authority
Reports
quarterly
Climate Change Committee
Audit Committee
Reports
quarterly
Audit Committee
members regularly
attend GRC meetings
Group Risk Committee
Strategy
We supply technology products and services
to our customers, which help them to reduce
their own environmental impact by reducing
business travel and increasing the flexibility
of their workforce. This is supported by our
Technology Sourcing infrastructure and
through investments in our Integration
Centers across Europe and North America to
enable us to fulfil product more locally.
Following our Brexit preparations, we have the
ability to dispatch products from our Kerpen
Integration Center to customers in the
European Union, which had previously been
shipped from our Hatfield Integration Center.
While there have been benefits of this change
in terms of export administration and
shipping cost, it has also helped to reduce
carbon emissions.
Computacenter’s exposure to climate-related
risks and opportunities can be seen through
the lens of our position as one of the world’s
leading VARs. Our ability to procure technology
products through leading technology vendors,
add value for our customers through our
Professional Services expertise, and then ship
or hold that product depends on:
• the resilience of our technology vendors;
• their ability to efficiently manufacture the
product on a timely basis; and
• their ability to send it to our customers or to
us, in a timely and cost-efficient manner.
Our Services business depends on our people
being able to access our service delivery
locations and our customers’ locations, as
well as the uninterrupted functioning of our
operational infrastructure, such as our principal
offices, Integration Centers and Service Centers.
54 | Computacenter plc Annual Report and Accounts 2022
Any physical or transitional climate-related
risk which disturbs the equilibrium of our
value chain could impact the execution of our
strategy, our levels of customer service and
satisfaction, and ultimately our financial
performance. We do not recognise climate
change as a principal risk to the business, and
do not therefore recognise it in our financial
planning process due to its financial
immateriality in the timescales we use.
Nevertheless, we have set out opposite those
climate-related risks which we think could
reasonably result in that happening, although
for many of these their frequency and severity
is difficult to predict. We have therefore based
our analysis on certain assumptions, which
we have also explained.
Strategic Report Physical Risk: Extreme weather events and
long-term changes in climate patterns
Significant changes in weather patterns in the
medium to long term, both acute and chronic,
could result in interruptions in our technology
vendors’ ability to manufacture and distribute
on a timely basis, and could cause damage to
our service delivery locations, including our
Service Centers, Integration Centers and Data
Centers, affecting our ability to run an
uninterrupted service for our customers.
Most of our technology vendors are
substantial international businesses, which
have the size, resilience, technological
capability and investment capacity to
mitigate the future risk of climate-related
damage to their manufacturing and
distribution process. We work with multiple
technology vendors, which mitigates against
one organisation, area or region being
impacted by extreme weather. We carry out a
physical assessment of our service delivery
locations across the globe as part of our
insurance risk assessment process and retain
the services of one of the foremost global
engineering and risk-based insurers. We
ensure we have business contingency
planning, so we can move our service delivery
to alternative locations with minimal impact
to service levels. None of our service delivery
locations are at material risk of flooding from
rivers or from sea level rises or from wind or
wildfire risk and, like many organisations
during the Covid-19 pandemic, we have
reduced our reliance on physical offices.
Transition Risk: Compliance and
reputational risk
As we move towards a low-carbon economy,
there are increasing compliance requirements
emanating from the UK Government,
regulatory authorities and standard-setters,
such as additional FCA Listing Rules,
Department for Business, Energy & Industrial
Strategy (BEIS) guidance and International
Sustainability Standards Board (ISSB)
disclosure requirements, as well as pressure
from business stakeholders and market
initiatives related to sustainability reporting,
such as the TCFD. If we fail to meet these
requirements and expectations, or if we fail to
set and achieve our climate impact reduction
targets, this is likely to harm our reputation
and could cause customers to reduce their
business with us.
We take our climate-related responsibilities
seriously, which helps mitigate against this
risk. We have had a Climate Committee in
place since 2020. Recent initiatives have
included the installation of a large number of
solar panels at our Hatfield, Kerpen and
Livermore Integration Centers. We also source
renewable energy for our operations in the
United Kingdom, Germany, Spain and the
United States. These and other initiatives
(detailed on pages 46 to 52) have contributed
to a reduction of our Scope 1 and 2 emissions
of 78 per cent since 2019 (see page 47). We
have met our target to be carbon neutral for
our Scope 1 and 2 emissions in 2022. We have
achieved this through a combination of
reducing our greenhouse gas emissions
(for example, through a combination of
generating our own power through the use of
solar panels, the purchase of green electricity
and reducing consumption) and offsetting.
We have a target to reduce our Scope 1, 2 and
3 emissions to Net Zero by 2040, backed by
Science Based Targets. Our progress towards
these targets will be monitored and reported
on in future Annual Reports. See the metrics
and targets section on page 56 for more detail.
Our initial assessment indicates that
transition risks associated with the shift to a
low-carbon economy are more likely to have
an impact on our business in the short term,
while physical risks (both acute and chronic)
may become a greater issue in the longer
term, if global temperature increases are not
held within the 2°C limit envisaged by the Paris
Agreement or we see the impacts of global
warming of 1.5°C above pre-industrial levels,
envisaged in the Intergovernmental Panel on
Climate Change ‘Special Report’. More detail
on the risks and opportunities arising from
climate change, and the mitigating actions we
are taking to address them, are shown below.
The time periods below reflect our targets as
being submitted to the SBTi and are indicative
of our view that transition risks are a more
likely impact on our business in the short term
while physical risks may become more
consequential in the long term.
Short term (to 2032)
Medium term (2032 to 2040)
Long term (beyond 2040)
Continued transition risks
• Increasing reputational risk with
shareholders, customers and employees, if we
do not adequately address climate change.
• Continuing compliance risk if we fail to meet
regulatory requirements, including emissions
reporting obligations.
• Increased cost of climate-related levies/
increased pricing of GHG emissions.
• Changing customer behaviour.
• Travel curbs.
Opportunities
• Continuing customer investment in their IT
infrastructure, with continued high demand
for modern, lower-carbon footprint technology
products.
• Our Circular Services will remain important to
our customers.
Less significant increase in physical risks
• Continued isolated extreme weather events
causing manageable business disruptions.
Higher summer temperatures and rapid
changes in temperature and humidity
causing challenges for data center cooling.
•
Opportunities
• Our ability to provide Circular Services by
ourselves will help us to differentiate, as
customers will expect these services to be
integrated into more of the technology
products and services they procure, e.g.,
through ‘Device as a Service’ (DaaS).
• Customers will increasingly require our
advice on the selection and deployment of
technology products, to help them achieve
their carbon reduction strategies.
o
i
r
a
n
e
c
s
C
o
2
<
Higher transition risks associated with moving
to a low-carbon economy
• Reputational risk with shareholders,
customers and employees, if we do not
adequately address climate change.
• Compliance risk if we fail to meet regulatory
requirements, including emissions reporting
obligations.
• Increased cost of climate-related levies/
increased pricing of greenhouse gas (GHG)
emissions.
• Changing customer behaviour.
• Travel curbs.
Opportunities
• Customers will continue to invest in their IT
infrastructure, to enable hybrid working
practices which are carbon-reducing, and
also to reduce the carbon footprint of their IT
infrastructure. We will therefore continue to
see high demand for modern, lower-carbon
footprint technology products, strengthening
the resilience of our business model and
contributing to our continued growth.
• Our Circular Services (redeployment,
remarketing and recycling of technology
products) will become increasingly important
to our customers.
Computacenter plc Annual Report and Accounts 2022 | 55
Task Force on Climate-related Financial Disclosures continued
Short term (to 2032)
Medium term (2032 to 2040)
Long term (beyond 2040)
Slight increase in transition and physical risks
in the short term
• Isolated and manageable business
Increasing physical risks due to a failure to
adequately transition to a low-carbon economy
• Power outages due to restrictions on use of
Increased physical risks due to a failure to
adequately transition to a low-carbon economy
• Power outages due to restrictions on use of
fossil fuels.
fossil fuels.
disruptions caused by extreme weather
events, such as flooding or drought.
• Ad-hoc supply chain interruptions.
• Increased insurance costs due to natural
disasters.
o
i
r
a
n
e
c
s
C
o
2
>
Opportunities/Resilience
• Our ability to supply technology products
locally in multiple regions (UK, EU, North
America and APAC) will help large
international customers to reduce shipment
costs and the associated carbon footprint.
This international coverage will also increase
our resilience and help us provide greater
supply chain resilience to our customers.
• Increasing cost of power.
• Flooding due to increased sea level (no
strategic locations are at material risk).
• Increasing transport costs.
• Telecoms and internet disruptions.
Opportunities/Resilience
• We will continue to maintain operational
resilience through the geographical dispersion
of our Service Centers.
• Our existing strength as one of the world’s
most international and Services-led VARs give
us the opportunity to establish a leadership
position in helping both customers and
technology vendors to achieve their
sustainability goals.
• Increased cost of power.
• Flooding due to increased sea level (no
strategic locations are at material risk).
• Pandemics due to new diseases caused by
climate and population changes.
• Population changes – due to things such as
controls on population growth, increasing
migration, and the need for automation.
• Increased transport costs.
• Telecoms and internet disruptions.
Opportunities/Resilience
• We will continue to maintain operational
resilience through the geographical
dispersion of our Service Centers.
• Our existing strengths as one of the world’s
most international and Services-led VARs
gives us the opportunity to establish a
leadership position in helping both customers
and technology vendors to achieve their
sustainability goals.
Metrics and targets
In line with our current risk assessment and
mitigation plan, we continue to largely
concentrate on transition risks and our
commitment to becoming a Net Zero
business, as outlined above.
We have taken into account the cross-
industry metric categories defined in the
TCFD’s guidance on metrics, targets and
transition plans (October 2021) in monitoring
our transition to a low-carbon economy and
the risks involved with it.
The less than 2°C scenario assumes that we
act responsibly, in line with business and
society globally, to reduce GHG emissions. This
may include the introduction of carbon pricing
by national governments. In this scenario, we
expect that transition risks pose the biggest
threat to our business, with only a limited and
manageable impact on our operations from
physical risks. The greater than 2°C scenario
assumes climate policy is less effective and
emissions cause climate change above that
envisaged in the Paris Agreement. Under this
scenario, we would expect physical risks
to become much more apparent in the
longer term.
The scenarios we have chosen above reflect
the TCFD requirement for a 2°C or lower
scenario and a higher carbon scenario that is
more likely to result in higher physical risks
to the business. In the short- to medium-term
at least, the resilience of our business to
transition risks, which are well-managed, will
not impact our strategy. Physical risks will be
unlikely to materially affect our business
model until the longer term but this will be
kept under review.
Our strategy to address climate-related
issues includes our achievement of being
carbon neutral for our Scope 1 and 2
emissions in 2022, our target to reduce our
Scope 3 emissions by 50 per cent by 2032 and
our target to be Net Zero for our Scope 1, 2 and
3 emissions by 2040, with all targets backed
by Science Based Targets.
Risk management
Our risk management and control framework
enables us to effectively identify, assess and
manage climate-related risks. As summarised
on page 75, the Board reviews climate change
risk as part of its review of our principal risk
relating to complying with our commitments
and applicable laws and regulations in relation
to environmental, social and governance
matters. The process for identifying and
assessing climate-related risk is the same as
for all principal risks, as described on page 75.
Each of our principal risks has an assigned
risk owner, who is responsible for its
management. This includes ensuring the
effectiveness of internal controls and for
overseeing risk mitigation plans. Each risk
owner presents the controls and mitigations
for peer review at least annually in the Group
Risk Committee meetings. The Board also
reviews the principal risks annually. We do not
currently recognise climate change as a
principal risk to the business.
The Group Finance Director chairs the Climate
Committee that was established in 2020.
The Climate Committee consists of Group
managers and senior employees with specific
environmental interests, as noted in the
Governance section on page 54. The
Committee’s aim is to debate and propose
initiatives to continue to reduce our
environmental impact, with some material
investments to be approved at Group
Executive level.
56 | Computacenter plc Annual Report and Accounts 2022
Strategic Report
Metric category
GHG emissions
Transition risk
Physical risk
Climate-related
opportunities
Target
We have a target to reduce absolute Scope 3 GHG emissions by 50 per cent by 2032 and by 90 per cent by 2040, both from
a 2021 base year. Additionally, we have committed to reduce absolute Scope 1 and Scope 2 GHG emissions by 90 per cent
by 2040 from a 2019 base year. We have committed to reach Net Zero by 2040. These remain proposals until accepted by
the SBTi.
(See page 48 for details of our GHG emissions).
In order to achieve our Scope 1 and Scope 2 reduction target, Computacenter will continue to invest in increasing the energy
efficiency of our offices, data centers and other facilities, resulting in a decrease in energy consumption. Where feasible, we
will continue to install on-site renewable electricity systems, such as the photovoltaic systems already in place in the United
Kingdom, Germany and the United States. Where we are unable to generate our own, we will continue to source our
electricity from renewable sources, helping to reduce our Scope 2 market-based emissions.
Purchased goods and services account for 74 per cent of Computacenter’s total Scope 3 emissions. In order to achieve our
targets, reduction efforts need to be focused here. By engaging with and encouraging customers to make the decisions
with the least amount of GHGs associated with them, e.g., energy efficient products, we will be able to reduce our Scope 3
emissions in this area. Additionally, as our technology vendors and other suppliers continue along their sustainability
journeys, reducing the emissions associated with the manufacture of IT hardware, our Scope 3 emissions will continue to
reduce. Furthermore, Computacenter will continue decreasing the percentage of waste sent to landfill, helping to reduce
emissions from the treatment and disposal of waste. We are encouraging employees to, first, limit journeys for business
travel purposes, and secondly if journeys are necessary, encouraging lower emitting forms of transport, e.g. rail rather
than air.
We have considered transition risks to achieving our strategic objectives across the Group as a whole. However, they are not
considered material at this stage.
We have assessed the Group’s locations close to water sources at risk of flooding or at risk of sea level change. None of the
locations close to water sources are strategic to our operations. Additionally, no location is at major risk of wind or wildfire.
We retain the services of one of the foremost engineering and risk-based insurers in the world, which assists us in our
assessments, and we are also working to integrate those locations that are not part of our Group Insurance Programme.
Customers will need us to:
• supply and deploy modern, lower-carbon footprint technology products;
• provide Circular Services for their technology estate and increasingly integrate these into our Services;
• provide local supply solutions, to minimise the shipment-related carbon footprint;
• advise on selecting and deploying lower-carbon IT infrastructure, to help them meet their sustainability goals.
RDC, our Circular Services offering, processed 1.9 million devices during 2022 (which includes remarketing, redeploying and
recycling), processing 3,771 tonnes of equipment and recovering 617 tonnes of raw material, with 112,000 tonnes of CO2e
avoided by reusing equipment.
Capital deployment
We do not have targets in relation to capital deployment but we continue to make expenditure necessary to meet our
commitments in terms of climate change. In recent years we have made significant investments to reduce our carbon
footprint. These include the following initiatives:
• Installing 6,308 solar panels at our Hatfield Integration Center at a cost of approximately £1.2 million; installing 1,764 solar
panels at our Kerpen Integration Center, and installing 2,016 solar panels over our Kerpen car park spaces, at a cost of
approximately €1 million. Combined, these will result in annual power generation of approximately 3 million kWh and the
reduction in Scope 2 emissions of approximately 1,100 tonnes, based on a combination of the United Kingdom and
Germany conversion factors.
• Installation of a further 1,200 solar panels on the roof of our Livermore Integration Center in California, which was
completed in 2022, and has generated c. 246,000 kWh since going live in August 2022.
• Purchasing ‘green’ electricity across our UK and German businesses at an incremental cost of £100,000, resulting in
emissions reductions of 10,939 tonnes.
• Introducing electric vans in some of our logistics business areas and electric cars. In the United Kingdom, we have
increased the proportion of non-internal combustion engine (non-ICE) cars (mild hybrid, PHEV and EV) from 56 per cent to
64 per cent and pure EVs from 13 per cent to 19 per cent, against the challenges of poor availability. In Germany, 30 per
cent of the fleet is non-ICE with a rising trend.
• Acquisition of our RDC Circular Services subsidiary.
Overall, our GHG emissions are now 17.8 per cent of the 2015 number (a reduction of 82.2 per cent).
Since October 2021, we have introduced an internal levy of £10/€12/$14 per flight or hotel booking for the United Kingdom,
France, Germany, Spain, Belgium and the United States, to purchase carbon credits each year to offset the CO2 emissions
generated from these activities. The total levy generated during the 12-month period to 31 December 2022 is c. £280,000.
For the year ended 31 December 2022, no executive discretionary bonus was linked to climate considerations, other than
the Group Finance Director, who has one objective related to climate change management. However, this is being kept under
review by the Remuneration Committee.
Internal carbon prices
Remuneration
Computacenter plc Annual Report and Accounts 2022 | 57
Group Finance Director’s review
INVESTMENTS FOR
LONG-TERM SUCCESS
We remain very encouraged by
the resumption of longer-term
IT transformations,
on a scale and timeline
that appear strengthened
by the experiences of the
last two years.
Tony Conophy
Group Finance Director
58 | Computacenter plc Annual Report and Accounts 2022
Strategic Report During 2022, the Group generated continued
strong revenue growth in both Technology
Sourcing and Services. Growth across all
Segments was excellent, apart from the
United Kingdom where, despite strong growth
in gross invoiced income, we saw a decline
in reported Technology Sourcing revenues
as the product mix changed and both
Professional Services and Managed Services
declined, due to lower workplace projects
and contract losses in 2021 respectively.
Whilst the United Kingdom saw significant
gross invoiced income growth through
increasing software and resold Services
activity, only the margins on this business,
which are naturally low, are reported as
revenue, following the change to our
accounting policy for agent versus principal
recognition. See below and notes 3 to 5 to the
Consolidated Financial Statements for more
information on the impact of our change in
accounting policy.
A small number of very high-volume
customers continue to recognise and value
our capability to source and deliver product
for their needs, in a very competitive
marketplace, through our close relationships
with our vendor technology partners. As this
hyperscale business grows in relation to the
rest of the business, the margin in North
America will continue to decline relative to our
other key geographies over the longer term.
Reconciliation to adjusted1 measures for the year ended 2022
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment reversal on trade receivables and contract assets
Operating profit
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the year
Reconciliation to adjusted1 measures for the year ended 2021
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment loss on trade receivables and contract assets
Operating profit
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the year
Principal
element on
agency
contracts
£m
2,581.7
(2,581.7)
–
Adjustments
Amortisation
of acquired
intangibles
£m
–
–
–
Exceptionals
and others
£m
–
–
–
–
–
–
–
–
–
–
–
10.9
–
10.9
–
–
10.9
(2.3)
8.6
1.8
–
1.8
–
2.0
3.8
(0.2)
3.6
Principal
element on
agency
contracts
£m
1,889.0
(1,889.0)
–
Adjustments
Amortisation
of acquired
intangibles
£m
–
–
–
Exceptionals
and others
£m
–
–
–
–
–
–
–
–
–
–
–
7.6
–
7.6
–
–
7.6
(2.1)
5.5
–
–
–
–
–
–
–
–
Reported
full-year
results
£m
6,470.5
(5,523.4)
947.1
(691.8)
1.1
256.4
2.4
(9.8)
249.0
(64.8)
184.2
Reported
full-year
results
£m
5,034.5
(4,166.7)
867.8
(612.0)
(0.6)
255.2
0.3
(7.5)
248.0
(61.5)
186.5
Adjusted1
full-year
results
£m
9,052.2
(8,105.1)
947.1
(679.1)
1.1
269.1
2.4
(7.8)
263.7
(67.3)
196.4
Adjusted1
full-year
results
£m
6,923.5
(6,055.7)
867.8
(604.4)
(0.6)
262.8
0.3
(7.5)
255.6
(63.6)
192.0
Computacenter plc Annual Report and Accounts 2022 | 59
Group Finance Director’s review continued
The Group has seen significant currency
translation movements, as the pound sterling
has fluctuated against other currencies,
particularly the US dollar and the euro, which
impacts us the most. Further information on
currency impacts is available on page 67.
Investments
Computacenter resells, deploys and manages
vendor technology for customers. This means
we are fundamentally a people-centric
business. Customers remain loyal to
Computacenter because of the quality of our
people and service and this will always be the
case. However there are a number of other
assets that we employ to deliver to our
customers such as our Service and
Integration Center facilities, methodologies,
best practices, a track record of performance,
and in particular, great systems. We invest
many millions of pounds every year in
improving and supporting these systems,
which give us a competitive advantage in a
business which is about scale, repeatability
and agility.
Our systems need to be robust, secure and
able to handle large volumes. They also have
to be simple to use and adaptable to most
customer eventualities. The vast quantities of
product that we transact for customers puts
massive pressure on our operations and
systems, as customers call off stored
technology piecemeal and at short notice,
often to thousands of different users’ home
addresses. We prioritise our plans for systems
development, and other investments in time
and capital, in response to the ever-changing
environment in which we operate.
We have continued to refine our systems
investment roadmap through to the end of
2026, with a multi-million pound programme
to replace legacy systems that enable our
Technology Sourcing and Services businesses.
Investing in best-of-breed tools will lower cost
to serve, improve the quality of our offerings
and enhance our relevance to customers in
the marketplace.
We continue to invest in our nearshore and
offshore capabilities, with over 100
professionals now based in our specialist
application development consultancy within
our Romanian business that started in 2021.
We have grown our workforce in India from 15
employees in 2019 to approximately 1,100 at
the end of 2022. This business now serves a
range of our biggest customers and, with an
ability to continue to scale whilst increasing
the complexity of offering, we expect to have
a business of up to 5,000 employees in the
medium term.
In Germany, our focus on growing the
workplace business has absorbed significant
capacity in our Integration Center facility,
leading to its expansion through the addition
of a second, co-located, facility in Kerpen. The
very strong growth in workplace in Germany
has stretched our onsite handling and
configuration capacities. Germany already
had a higher percentage of workplace product
delivered via our Integration Centers, versus
direct delivery from the vendors, than our
other geographies. The larger volumes fully
utilised our existing facilities. This led to
higher handling costs for these inventories,
as they are moved around increasingly scarce
space in our Integration Centers. We
implemented a mitigation strategy towards
the end of the first half of 2022, with this
additional Integration Center capacity being
added near to our existing facility. The new
facility has alleviated the pressure on the
German business, and improved efficiencies
and customer satisfaction.
On 13 July 2022, the Group announced that
it had acquired one of the fastest-growing
value-added resellers in the United States,
Business IT Source (BITS) effective from July
2022. The Group has paid an initial $32.0 million,
with two additional payments contingent on
the future performance of the acquired
business through to 31 December 2024.
BITS employs around 100 people and has a
headquarters and Integration Center in
Buffalo Grove, United States, approximately
45 minutes from downtown Chicago. BITS
recorded gross invoiced income in 2021 of
approximately $245 million with adjusted1
operating profit of approximately $8.9 million
for the full year. Since we acquired the
business in July 2022, BITS has achieved gross
invoiced income of $221 million and adjusted1
operating profit of $8.4 million in six months
of ownership.
The existing BITS leadership team will stay to
run the business as a separate operating unit
within Computacenter North America, to
maximise the growth opportunity. The
business and the team will be fully integrated
into Computacenter’s North American
operations over time.
Whilst our North American business continues
to see substantial organic growth, we will
continue to review additional inorganic
opportunities to improve our positioning in
this important market. BITS gives us a much
stronger presence in the Mid-West of the
United States and brings some great people,
customers and leadership to our business.
The Buffalo Grove Integration Center will allow
us to serve more of our Mid-West regional
customers locally over time, helping us to
meet our sustainability goals. We are
optimistic that the BITS leadership team will
seize the opportunity to continue their current
growth momentum.
BITS will have the opportunity to provide a
much broader range of capabilities to our
customers and growth opportunities for its
people. Operating as a separate business unit,
over the short term, will allow us to continue
our personalised service while leveraging
Computacenter’s capabilities and balance
sheet to best serve customers and partners.
60 | Computacenter plc Annual Report and Accounts 2022
On 25 May 2022, the Group acquired 100 per
cent of the share capital in Emerge and the
associated Asia Pacific (APAC) operations
from Emerge 360, Inc., for consideration of
$3.5 million. The acquired APAC business has
a presence in Japan, Singapore, Australia and
Hong Kong.
This continues our strategy of building the
best international capability of any value-
added reseller in the world. Emerge was
already a valued partner in the region,
working to extend our reach and capability
for our international customers. Following the
acquisition, over 230 engineers and service
managers have joined Computacenter in
Singapore, Hong Kong, Australia, Japan and
India. This brings our total number of people in
APAC to nearly 300 and in India to over 1,100.
Our strategy in APAC is to build better
operational capability and coverage to
support our international customers
headquartered in Europe and North America.
We will enhance the credibility of our offering
to our existing customer base by employing
our own service leadership in the region,
who will have local interaction with customers
and manage delivery, whether it is by
Computacenter or our partners. In India,
although our strategy is centred on building
our offshore Service Center capability, our 80
new people from Emerge join an existing and
growing engineering team who work on key
customer sites. This acquisition enhances
our Services offerings within the region and,
in both APAC and India, this will continue to be
complemented by the great Technology
Sourcing experience provided by our local
and regional partners.
Migrating our recently acquired material
entities onto our leading ERP platform
technologies and toolsets will help to unlock
their potential for growth and efficiencies.
The integration of Pivot and BITS onto Group
systems is planned for 2023 and 2024
respectively, and will benefit from the recent
migration of FusionStorm and the legacy
North American business, which transitioned
to the Group ERP in September 2021. This is by
no means an easy task and operational issues
will no doubt arise as these businesses adapt
to Group processes. Further, a number of
next-generation upgrades to the customer
relationship management and configure price
quote systems were implemented within the
North American rollout. These are being
progressively introduced through the rest of
the Group, and will continue to evolve the way
we do business with our customers, ensuring
that ordering capability and cost-to-serve
efficiencies are improved.
Combined, these acquisitions, and the ITL
logistics acquisition made during 2021, added
£187.8 million of revenue (2021: £1.3 million)
and £5.4 million of adjusted1 profit before
tax (2021: £0.4 million) to the Group’s
reported results.
Strategic Report Revenue accounting policy change
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 service contracts and revised our
accounting policies to reflect this change.
Historically, we had considered ourselves the
principal in the arrangement and largely
recognised these transactions on a principal
or gross basis, with the gross invoiced
income, represented by the invoiced amount
to customers, reported as revenue and the
cost of the resold software or services
reported as cost of goods sold. Subsequent
to the approval of the interpretation of the
revenue accounting standard by the
International Accounting Standards Board, 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.
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.
We will continue to show our gross invoiced
income as an alternative performance
measure. 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 and net of the impact of credit notes
and excluding VAT or other sales taxes. This
reflects the cash movements to assist
Management and the users of the Reports
and Accounts in understanding revenue
growth on a ‘principal’ basis and to assist their
assessment of working capital movements in
the Consolidated Balance Sheet and
Consolidated Cash Flow Statement. This
alternative performance measure also allows
an alternative view of growth in adjusted1
gross profit, based on the product mix
differences and the accounting treatment
thereon. A reconciliation of revenue to gross
invoiced income is provided within note 5 to
the Consolidated Financial Statements.
A reconciliation to adjusted¹ measures is
provided on page 59 of this Group Finance
Director’s review. Further details are provided
in note 2.5 to the Consolidated Financial
Statements, adjusted1 measures. For the
avoidance of duplication, further information on
the Group’s financial performance can be found
on pages 24 to 37 of this Strategic Report.
Operating profit
Overall, gross profit growth lagged behind the
excellent revenue growth due to Technology
Sourcing customer and product mix. Surging
levels of business with a small number of
North American hyperscalers during the year
have negatively impacted gross margins for
the Group due to the generally tighter margins
on these high-volume accounts. Lower
Services margins occurred due to cost
inflation and lower utilisations and returning
costs within our Services business, following
the unwinding of the impact of the Covid-19
pandemic as described earlier. Overall, Group
gross margins, expressed as gross profits as
a percentage of revenue, fell to 14.6 per cent
(2021: 17.2 per cent).
Administrative expenses increased by 12.7 per
cent to £690.7 million (2021: £612.6 million).
We continue to apply the cost-management
lessons from the Covid-19 crisis, to ensure
that as costs inevitably return due to factors
such as increased travel, they remain lower
than before, resulting in a more efficient
business. In addition, we have reviewed our
office footprint across our major geographies
and will look to rationalise the estate where
locations are no longer necessary, or could be
reduced in size, due to our people and our
customers’ workforces adopting hybrid
working. Adjusted1 administrative expenses
increased by 12.1 per cent to £678.0 million
(2021: £605.0 million), and by 9.4 per cent in
constant currency2.
Profit before tax
The Group’s profit before tax for the year
increased by 0.4 per cent to £249.0 million
(2021: £248.0 million). Adjusted1 profit before
tax increased by 3.2 per cent to £263.7 million
(2021: £255.6 million) and by 2.1 per cent in
constant currency2.
The difference between profit before tax and
adjusted1 profit before tax relates to the
Group’s net costs of £14.7 million (2021: net
costs of £7.6 million) from exceptional and
other adjusting items, which relates wholly to
costs associated with the acquisition of BITS
and the amortisation of acquired intangibles
as a result of recent North American
acquisitions. Further information on these
items can be found on page 62.
Net finance charge
Net finance charge in the year amounted to
£7.4 million (2021: £7.2 million). The main items
included within the net charge for the year
were £4.9 million of interest charged on lease
liabilities recognised under IFRS 16 (2021:
£5.2 million) and exceptional interest costs of
£2.0 million relating to the unwinding of the
discount on the contingent consideration for
the purchase of BITS, which was excluded on
an adjusted1 basis. Outside of the specific
items above, net finance charges of £0.5
million were recorded (2021: £2.0 million).
On an adjusted1 basis, the net finance cost was
£5.4 million during the year (2021: £7.2 million).
Taxation
The tax charge was £64.8 million (2021: £61.5
million) on profit before tax of £249.0 million
(2021: £248.0 million). This represented a tax
rate of 26.0 per cent (2021: 24.8 per cent).
This includes the recognition of a €2.4 million
deferred tax asset representing the probable
benefit of future utilisation of losses within
the French business due to a forecast
improvement in the short- to medium-term
profitability in this geography.
The tax credit related to the amortisation of
acquired intangibles was £2.3 million (2021:
£2.1 million). The £10.9 million of amortisation
of intangible assets was almost entirely a
result of the recent North American
acquisitions (2021: £7.6 million). As the
amortisation is recognised outside of our
adjusted1 profitability, the tax benefit on the
amortisation is also reported outside of our
adjusted1 tax charge.
During 2022, a tax credit of £0.2 million (2021:
nil) was recorded on expenses related to the
acquisition of BITS. As this credit was related
to the acquisition and not operational activity
within BITS, and is a one-off, we have classified
this as an exceptional tax item, outside of our
adjusted1 tax charge, consistent with similar
treatments in prior years.
The adjusted1 tax charge for the year was
£67.3 million (2021: £63.6 million), on an
adjusted1 profit before tax for the year of
£263.7 million (2021: £255.6 million). The
effective tax rate (ETR) was therefore 25.5 per
cent (2021: 24.9 per cent) on an adjusted1 basis.
During the second half of 2022 a number of
one-off tax items were processed that
substantially reduced the tax charge, and
therefore the adjusted1 ETR, for the year as a
whole. Recognising deferred tax assets for
the future utilisation of carry forward losses
in the Netherlands and France, as noted
above, resulted in a one-time credit to the tax
expense of £3.1 million. Several other one-off
items were incurred in the year in North
America and reduced the tax expense by a
further £1.4 million in aggregate. These
include the closure of a number of historical
tax positions, some of which relate to events
preceding the acquisition of the Pivot subsidiary.
Together, these combined items resulted in
a one-time credit benefit to the tax expense
of £4.5 million (2021: £5.5 million). Excluding
these items, the underlying adjusted1 tax
expense would be £71.8 million (2021:
£69.1 million), resulting in an adjusted1 ETR
of 27.2 per cent (2021: 27.0 per cent).
Computacenter plc Annual Report and Accounts 2022 | 61
Group Finance Director’s review continued
Had the one-off items not impacted during
the year, and the Group result reflected an
adjusted1 ETR of 27.2 per cent, the adjusted1
diluted EPS would have been 165.8 pence per
share (2021: 160.9 pence per share). Assuming
an unchanged dividend payment policy from
that described on page 64, the proposed final
dividend, and the total dividend for the year,
would have been 44.3 pence per share and
66.4 pence per share respectively.
The adjusted1 ETR is therefore outside the
full-year range that we indicated in our 2022
Interim Results, which showed an ETR of
27.9 per cent (H1 2021: 28.6 per cent), due
to the unforecasted positive impacts
described above.
We expect that the ETR in 2023 will be subject
to upwards pressure, due to an increasing
reweighting of the geographic split of
adjusted1 profit before tax away from the
United Kingdom to Germany and the United
States, where tax rates are higher, and also as
governments across our primary jurisdictions
come under fiscal and political pressure to
increase corporation tax rates. Substantially
enacted tax increases will take effect in the
United Kingdom from 1 April 2023, with a rise
from 19 per cent to 25 per cent.
The Group Tax Policy was reviewed during the
year and approved by the Audit Committee
and the Board, with no material changes from
the prior year. We make every effort to pay all
the tax attributable to profits earned in each
jurisdiction that we operate. We do not
artificially inflate or reduce profits in one
jurisdiction to provide a beneficial tax result in
another and maintain approved transfer
pricing policies and programmes, to meet
local compliance requirements. Virtually all of
the tax charge in 2022 was incurred in either
the United Kingdom, Germany or United States
tax jurisdictions, as it was in 2021.
Computacenter France, which includes the
Computacenter NS acquisition within a tax
group, has returned to a broadly break-
even position, reducing the amount of tax
paid locally.
There are no material tax risks across the
Group. Computacenter will recognise
provisions and accruals in respect of tax
where there is a degree of estimation and
uncertainty, including where it relates to
transfer pricing, such that a balance cannot
fully be determined until accepted by the
relevant tax authorities. For 2022, the Group
Transfer Pricing policy implemented in 2013
resulted in a licence fee of £38.7 million (2021:
£30.3 million), charged by Computacenter UK
to Computacenter Germany, Computacenter
France and Computacenter Belgium. The
licence fee is equivalent to 1.0 per cent of
revenue and reflects the value of the best
practice and know-how that is owned by
Computacenter UK and used by the Group.
It is consistent with the requirements of the
Organisation for Economic Co-operation and
Development (OECD) base erosion and profit
shifting. The licence fee is recorded outside
the Segmental results found in note 4 to the
Consolidated Financial Statements, which
analyses Segmental results down to adjusted1
operating profit.
The table below reconciles the tax charge to the adjusted1 tax charge for the years ended 31 December 2022 and 31 December 2021.
2022
£m
64.8
2.3
0.2
67.3
26.0%
25.5%
2021
£m
61.5
2.1
–
63.6
24.8%
24.9%
The amortisation of acquired intangible
assets was £10.9 million (2021: £7.6 million),
primarily relating to the amortisation of the
intangibles acquired as part of the recent
North American acquisitions. This includes the
amortisation of a number of short-term
acquired intangibles relating to the valuation
of BITS order backlogs, due to the expiration
of the valued assets.
Tax charge
Adjustments to exclude:
Tax on amortisation of acquired intangibles
Tax on exceptional items
Adjusted1 tax charge
Effective tax rate
Adjusted1 effective tax rate
Profit for the year
The profit for the year decreased by 1.2 per
cent to £184.2 million (2021: £186.5 million).
The adjusted1 profit for the year increased
by 2.3 per cent to £196.4 million (2021:
£192.0 million) and by 1.4 per cent in
constant currency2.
Exceptional and other adjusting items
The net loss from exceptional and other
adjusting items in the year was £12.2 million
(2021: loss of £5.5 million). Excluding the tax
items noted above, which resulted in a gain of
£2.5 million (2021: gain of £2.1 million), the
profit before tax impact was a net loss from
exceptional and other adjusting items of
£14.7 million (2021: gain of £7.6 million).
An exceptional loss during the year of
£1.8 million resulted from costs directly
relating to the acquisitions made during the
year of BITS and Emerge. These costs include
professional advisor fees and seller’s fees
that were paid on completion of the
transaction. These costs are non-operational
in nature, material in size and unlikely to recur
and have therefore been classified as outside
our adjusted1 results. A further £2.0 million
relating to the unwinding of the discount on
the contingent consideration for the purchase
of BITS has been removed from the adjusted1
net finance expense and classified as
exceptional interest costs.
There were no exceptional items in 2021.
We have continued to exclude, as an ‘other
adjusting item’, the amortisation of acquired
intangible assets in calculating our adjusted1
results. Amortisation of intangible assets is
non-cash, does not relate to the operational
performance of the business, and is
significantly affected by the timing and size
of our acquisitions, which distorts the
understanding of our Group and Segmental
operating results.
62 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Gross invoiced income (GII)
2020
2021
2022
2022/21
Adjusted1 profit before tax
2020
2021
2022
2022/21
Gross invoiced income by Segment
UK
Germany
France
North America
International
Total
Adjusted1 operating profit by Segment
UK
Germany
France
North America
International
Central corporate costs
Total
UK
Germany
France
North America
International
Central corporate costs
Total
Half 1
£m
2,462.2
3,287.6
3,971.9
20.8%
Half 2
£m
2,979.1
3,635.9
5,080.3
39.7%
Total
£m
5,441.3
6,923.5
9,052.2
30.7%
Half 1
Half 2
Total
£m
74.6
118.9
111.9
(5.9%)
Half 1
£m
1,169.7
996.1
341.1
1,344.2
120.8
3,971.9
% GII
3.0
3.6
2.8
2022
Half 2
£m
1,154.8
1,399.0
443.7
1,936.9
145.9
5,080.3
£m
125.9
136.7
151.8
11.1%
Total
£m
2,324.5
2,395.1
784.8
3,281.1
266.7
9,052.2
% GII
4.2
3.8
3.0
Half 1
£m
1,031.5
929.7
313.1
922.4
90.9
3,287.6
£m
200.5
255.6
263.7
3.2%
2021
Half 2
£m
1,032.2
1,120.4
340.3
1,042.9
100.1
3,635.9
Half 1
£m
45.0
55.4
0.5
20.3
4.6
(11.6)
114.2
Half 1
£m
51.7
61.1
(2.0)
18.7
4.1
(11.1)
122.5
% GII
3.8
5.6
0.1
1.5
3.8
2.9
% GII
5.0
6.6
(0.6)
2.0
4.5
3.7
2022
Half 2
£m
35.5
85.5
6.6
32.7
6.7
(12.1)
154.9
2021
Half 2
£m
51.2
76.7
5.5
12.3
7.2
(12.6)
140.3
% GII
3.1
6.1
1.5
1.7
4.6
3.0
% GII
5.0
6.8
1.6
1.2
7.2
3.9
Total
£m
80.5
140.9
7.1
53.0
11.3
(23.7)
269.1
Total
£m
102.9
137.8
3.5
31.0
11.3
(23.7)
262.8
% GII
3.7
3.7
2.9
Total
£m
2,063.7
2,050.1
653.4
1,965.3
191.0
6,923.5
% GII
3.5
5.9
0.9
1.6
4.2
3.0
% GII
5.0
6.7
0.5
1.6
5.9
3.8
Computacenter plc Annual Report and Accounts 2022 | 63
Group Finance Director’s review continued
Earnings per share
Diluted EPS decreased by 1.1 per cent to 159.1 pence per share (2021: 160.9 pence per share). Adjusted1 diluted EPS increased by 2.5 per cent to
169.7 pence per share (2021: 165.6 pence per share).
Basic weighted average number of shares (excluding own shares held) (m)
Effect of dilution:
Share options
Diluted weighted average number of shares
Profit for the year attributable to equity holders of the Parent (£m)
Basic earnings per share (pence)
Diluted earnings per share (pence)
Adjusted1 profit for the year attributable to equity holders of the Parent (£m)
Adjusted1 basic earnings per share (pence)
Adjusted1 diluted earnings per share (pence)
2022
112.8
2.1
114.9
182.8
162.1
159.1
195.0
172.9
169.7
2021
113.0
2.2
115.2
185.3
164.0
160.9
190.8
168.6
165.6
Dividend
The Board recognises the importance of
dividends to shareholders and the Group
prides itself on a long track record of
paying dividends and other special one-off
cash returns.
Computacenter’s approach to capital
management is to ensure that the Group has
a robust capital base and maintains a strong
credit rating, whilst aiming to maximise
shareholder value. The Group remains highly
cash generative and adjusted net funds3
continues to increase on the Consolidated
Balance Sheet, which allowed acquisitions
such as FusionStorm in 2018, Pivot in 2020 and
BITS in 2022, alongside a number of other
small acquisitions.
If further funds are not required for
investment within the business, either for
fixed assets, working capital support or
acquisitions, and the distributable reserves
are available in the Parent Company, we will
aim to return the additional cash to
shareholders through one-off returns of
value, as we did in February 2018. As a
business that has returned £885 million
through a combination of dividends and share
buybacks since flotation, with no additional
investment required from shareholders over
that time, we are committed to managing the
cash position for shareholders and would look
to return up to 10 per cent of the market
capitalisation of the Company as soon as cash
reserves have replenished to enable us to do
so and, assuming no further acquisitions,
we would aim to do this by the end of 2024
at the latest.
Dividends are paid from the standalone
balance sheet of the Parent Company and,
as at 31 December 2022, the distributable
reserves were £246.3 million (31 December
2021: £199.3 million).
The Board is pleased to propose a final
dividend for 2022 of 45.8 pence per share
(2021: 49.4 pence per share). Together with
the interim dividend, this brings the total
ordinary dividend for 2022 to 67.9 pence per
share, representing a 2.4 per cent increase
on the 2021 total dividend per share of
66.3 pence.
The Board has consistently applied the
Company’s dividend policy, which states that
the total dividend paid will result in a dividend
cover of 2 to 2.5 times based on adjusted1
diluted EPS. In 2022, the cover was 2.5 times
(2021: 2.5 times).
Subject to the approval of shareholders at
our Annual General Meeting on 17 May 2023,
the proposed dividend will be paid on Friday
14 July 2023. The dividend record date is set
as Friday 16 June 2023 and the shares will be
marked ex-dividend on Thursday 15 June 2023.
Central corporate costs
Certain expenses are not specifically allocated
to individual Segments because they are not
directly attributable to any single Segment.
These include the costs of the Board itself,
related public company costs, Group Executive
members not aligned to a specific geographic
trading entity and the cost of centrally
funded strategic initiatives that benefit the
whole Group.
Accordingly, these expenses are disclosed as
a separate column, central corporate costs,
within the Segmental note. These costs are
borne within the Computacenter (UK) Limited
legal entity and have been removed for
Segmental reporting and performance
analysis but form part of the overall Group
adjusted1 administrative expenses.
Total central corporate costs were flat on last
year at £23.7 million (2021: £23.7 million).
Within this:
• Board expenses, related public company
costs and costs associated with Group
Executive members not aligned to a
specific geographic trading entity,
decreased to £7.2 million (2021: £9.1 million).
This level is comparable to that of 2020 with
2021 containing certain one-off costs in
relation to the cancellation of Group-wide
central meetings;
• share-based payment charges associated
with Group Executive members as
identified above, including the Group
Executive Directors, decreased from
£3.8 million in 2021 to £1.7 million in 2022,
due primarily to the decreased value of
Computacenter plc ordinary shares and the
overall outlook for the vesting of in-flight
PSP awards; and
• strategic corporate initiatives are designed
to increase capability and therefore
competitive position, enhance productivity
or strengthen systems which underpin the
Group. During the year this spend was
£14.8 million (2021: £10.8 million), in line with
forecasts, as the Group increases the pace
at which it replaces legacy systems and
consolidates around modern toolsets.
Cash flow
The Group delivered an operating cash
inflow of £242.1 million for 2022 (2021:
£224.3 million inflow).
During the year, net operating cash outflows
from working capital, including inventories,
trade and other receivables and trade and
other payables, were £60.8 million (2021:
£77.8 million outflow).
64 | Computacenter plc Annual Report and Accounts 2022
Strategic Report The implementation of additional inventory
holding approval controls in the final quarter
of the year, the continued focus from the
Group Technology Sourcing and Finance
teams, and the pending re-implementation
of internal inventory holding charges across
the sales teams from April 2023 has all
contributed to this improvement. The sales
teams are working with customers to realign
inventory support expectations, now that the
supply situation has materially improved
across the industry. We expect that levels of
inventory will continue to reduce towards
historical operational norms during H1 2023.
At the end of 2022, as in 2021, the Group again
saw significant levels of early payments from
customers. Once again, we elected to retain
the cash on the Group’s balance sheet rather
than make early payments to suppliers, to
offset the extraordinary investments in
working capital throughout 2022, as reflected
in the closing inventory levels.
Capital expenditure in the year was £35.5
million (2021: £30.3 million) representing,
primarily, investments in IT equipment and
software tools, to enable us to deliver
improved service to our customers.
The Group’s Employee Benefit Trust (EBT)
made market purchases of the Company’s
ordinary shares of £34.4 million (2021:
£25.5 million) to satisfy maturing PSP awards
and Sharesave schemes and to reprovision
the EBT in advance of future maturities.
During the year the Company received savings
from employees of £6.2 million to purchase
options within the Sharesave schemes (2021:
£6.2 million).
During the year the Group made two
acquisitions. The first was BITS, as described
above, with the initial consideration paid
of £26.6 million and net cash acquired of
£0.6 million. The second was for Emerge for
£3.0 million with net cash acquired of
£0.7 million.
The Group reduced loans and credit facilities
during the year by £16.6 million (2021: £89.0
million). We made regular repayments
towards the loan related to the construction
of the German headquarters in Kerpen and
fully repaid the amount drawn under the Pivot
credit facility and retired the arrangement,
as detailed below.
The Group continued to manage its cash and
working capital positions appropriately, using
standard mechanisms, to ensure that cash
levels remained within expectations
throughout the year. From time to time, some
customers request credit terms longer than
our standard of 30-60 days. In certain
instances, we will arrange for the sale of the
receivables on a true sale basis to a finance
institution on the customers’ behalf. We would
typically receive funds on 45-day terms from
the finance institution, which will then recover
payment from the customer on terms agreed
with them. The cost of such an arrangement
is borne by the customer, either directly or
indirectly, enabling us to receive the full
amount of payment in line with our standard
terms. The benefit to the cash and cash
equivalents position of such arrangements
as at 31 December 2022 was £45.1 million
(31 December 2021: £53.7 million). During
December 2022, the Group engaged in a
limited factoring programme of trade
receivables within the German business, on a
non-recourse basis, to provide assurance
against unforeseen liquidity issues which did
not, in the event, arise due to the continued
aforementioned strength of cash receipts in
the final weeks of the year. This factoring was
for £46.1 million or 2.7 per cent of the trade
receivables before provisions balance as at
31 December 2022. The Group had no other
debt factoring at the end of the year, outside
this normal course of business. There was no
debt factoring activity in December 2021
outside the normal course of business
described above.
Cash and cash equivalents and net funds
Cash and cash equivalents as at 31 December
2022 were £264.4 million, compared to
£273.2 million at 31 December 2021. Net funds
as at 31 December 2022 were £117.2 million
(31 December 2021: £95.3 million).
The Group excluded £127.1 million, as at
31 December 2022 (31 December 2021:
£146.1 million), of lease liabilities from its
non-GAAP adjusted net funds3 measure, due
to the distorting effect of the capitalised
lease liabilities on the Group’s overall liquidity
position under the IFRS 16 accounting standard.
Adjusted net funds3 as at 31 December 2022
were £244.3 million, compared to adjusted net
funds3 of £241.4 million as at 31 December 2021.
The Group had £417.7 million of inventory as at
31 December 2022, an increase of 22.4 per
cent on the balance as at 31 December 2021
of £341.3 million. Whilst the closing balance
was higher than the year before, it was
materially lower than the high point of £532.6
million seen at the end of the third quarter.
Working capital cash flows during 2022
continued to be affected by both the revenue
growth and the elevated inventory levels, in
particular within our North American and
German businesses. Throughout the year, a
number of hyperscale customers continued
to place advance orders of product with
delayed delivery, due to the significant
product shortages seen during the 18 months
to 31 December 2022, to ensure continuity of
supply. Additionally, inventory increased as we
deliberately invested in working capital by
pre-ordering inventory, once a committed
purchase order had been received from the
customer, thereby using the strength of our
balance sheet to support our customers
during product shortages. Further, a number
of rack build orders took longer than expected
to complete, sometimes due to shortages of
smaller components required to complete
the rack build. Finally, the transition of the
FusionStorm business to the Group ERP, whilst
now complete, did result in short-term
operational issues that impacted working
capital, as the picking and shipping of
complex inventory items, invoicing and cash
collection in particular experienced
significant delays late in 2021. Whilst there is
still scope for further efficiencies and process
optimisation, this position has now
significantly improved, as the FusionStorm
entity has gained experience in using the
system and tools and learnt how to leverage
their advantages.
Reductions in inventory during the year were
seen across the business, apart from in
Germany where the workplace business has
increased substantially, and North America.
North American inventories, excluding the BITS
business acquired during the year, increased
by 16.8 per cent to £248.1 million, and
increased by 4.5 per cent in constant
currency2. The increase lagged revenue
growth as year-end positions were closed out
and a significant balance of inventory present
at the cutover to the Group ERP system in
September 2021 was successfully shipped to
customers. German inventories increased by
41.8 per cent to £107.5 million, and by 34.4 per
cent in constant currency2 as inventory built
up in the Integration Center, waiting for
additional components and confirmed
customer delivery dates before shipping to
customers. We expect this German position to
continue to improve during 2023. An additional
Integration Center facility has been added
near to the existing facility in Kerpen, which
was running at record levels of capacity and
utilisation, to provide additional inventory
storage space and processing capacity which
will, in turn, increase the throughput overall.
Computacenter plc Annual Report and Accounts 2022 | 65
Group Finance Director’s review continued
Net funds as at 31 December 2022 and 31 December 2021 were as follows:
The Group also has a specific term loan for
the build and purchase of our German office
headquarters and fit out of the Integration
Center in Kerpen, which stood at £10.4 million
at 31 December 2022 (31 December 2021:
£14.7 million).
For further information on these facilities,
see note 23 to the Consolidated Financial
Statements.
There were no interest-bearing trade
payables as at 31 December 2022
(31 December 2021: nil).
The Group’s adjusted net funds3 position
contains no current asset investments
(31 December 2021: nil).
Trade creditor arrangements
Computacenter has a strong covenant and
enjoys a favourable credit rating from
technology vendors and other suppliers. Some
suppliers provide standard credit directly on
their own credit risk, whereas other suppliers
decide to sell the debt to banks, which offer
to purchase the receivables and manage
collection. The standard credit terms offered
by suppliers are typically between 30 and 60
days, whether provided directly or when sold
to a third-party finance provider. In the latter
case, the cost of the free-trade credit period
is paid by the relevant supplier, as part of the
overall package of terms provided by
suppliers to Computacenter and our
competitors. The finance providers offer
extended credit terms at relatively low
interest rates. However, these rates are
always higher than the rate at which we
deposit and therefore we do not currently
use these facilities.
31 December
2022
£m
275.1
(10.7)
264.4
(20.1)
244.3
(127.1)
117.2
31 December
2021
£m
285.2
(12.0)
273.2
(31.8)
241.4
(146.1)
95.3
Capital management
Details of the Group’s capital management
policies are included in note 28 to the
Consolidated Financial Statements.
Financial instruments
The Group’s financial instruments comprise
borrowings, cash and liquid resources,
and various items that arise directly from
its operations. The Group’s policy is not
to undertake speculative trading in
financial instruments.
The Group enters into hedging transactions,
principally forward exchange contracts or
currency swaps, to manage currency risks
arising from the Group’s operations and its
sources of finance. As the Group continues
to expand its global reach and benefit from
lower-cost operations in geographies such as
South Africa, Poland, Mexico and India, it has
entered into forward exchange contracts
to help manage cost increases due to
currency movements.
The main risks arising from the Group’s
financial instruments are interest rate,
liquidity and foreign currency risks. The
overall financial instruments strategy is to
manage these risks in order to minimise their
impact on the Group’s financial results. The
policies for managing each of these risks are
set out below. Further disclosures in line with
the requirements of IFRS 7 are included in the
Consolidated Financial Statements.
Interest rate risk
The Group finances its operations through a
mixture of retained profits, bank borrowings,
leases and loans for certain customer
contracts. The Group’s general bank
borrowings, other facilities and deposits are
at floating rates. No interest rate derivative
contracts have been entered into. The
undrawn committed facility of £200 million
is at floating rates. However, the borrowing
facility for the operational headquarters in
Germany is at a fixed rate.
Cash and short-term deposits
Bank overdraft
Cash and cash equivalents
Bank loans
Adjusted net funds3 (excluding lease liabilities)
Lease liabilities
Net funds
For a full reconciliation of net funds and
adjusted net funds3, see note 31 to the
Consolidated Financial Statements.
The Group had five specific credit facilities
in place during the year and no other
material borrowings.
At the start of the year, Pivot had a
substantially unutilised $100 million senior
secured asset-based revolving credit facility,
from a lending group represented by
JPMorgan Chase Bank, N.A. This was repaid in
full during 2022 and all security was released
on termination of the arrangement.
In addition, Pivot had £9.7 million
(31 December 2021: £9.4 million) financed with
a major technology partner for hardware,
software and resold technology partner
maintenance contracts that the Company had
purchased as part of a contract to lease these
items to a key North American customer.
The recently acquired BITS subsidiary
maintains a ringfenced ‘accounts receivable
and inventory flooring arrangement’ facility
with Wells Fargo of up to $100 million, secured
on the assets of that subsidiary. The facility is
provided on a rolling basis and the latest
amendment was signed on 5 July 2022. There
was $2.5 million of interest-bearing debt
relating to supplier invoices as at 31
December 2022, with an interest rate of 6.08
per cent.
On 9 December 2022, the Group entered into a
multicurrency revolving loan committed
facility of £200 million. This replaced the
previous committed facility of £60 million
which was terminated and all security was
released. This new facility has a term of five
years plus two one-year extension options
exercisable on the first and second
anniversary of the facility. The Group is
subject to certain key financial covenants
under this syndicated facility with Barclays,
Lloyds, HSBC, BNP Paribas, JPMorgan Chase
and PNC Bank. These covenants, as defined in
the agreement, are monitored regularly to
ensure compliance. As at 31 December 2022,
the Group was in compliance with
all covenants.
66 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Liquidity risk
The Group’s policy is to ensure that it has
sufficient funding and facilities to meet any
foreseeable peak in borrowing requirements.
The Group’s positive net cash was maintained
throughout 2022 and at the year end was
£264.4 million, with net funds of £117.2 million
after including the Group’s two specific
borrowing facilities and lease liabilities
recognised under IFRS 16. Excluding lease
liabilities, adjusted net funds3 was £244.3
million at the year end.
During the year, as the working capital of the
Group increased, partly in order to support
customers with longer lead times on
hardware orders, which resulted in
significantly higher inventory, the Group
activated its uncommitted revolving credit
facility and drew down £30 million to assure
additional liquidity in the face of the working
capital challenges, which the Group worked
through towards the end of the third quarter
of the year. This was fully repaid, and the
facility was subsequently retired, before year
end.
Due to strong cash generation over many
years, the Group can currently finance its
operational requirements from its cash
balance, and it operates an informal cash
pooling arrangement for the majority of Group
entities. The Group has a committed facility
of £200 million, which replaced previous
facilities, that has an expiry date of
8 December 2027.
The Group has a Board-monitored policy to
manage its counterparty risk. This ensures
that cash is placed on deposit across a range
of reputable banking institutions.
Foreign currency risk
The Group operates primarily in the United
Kingdom, Germany, France and the United
States of America, with smaller operations in
Australia, Belgium, Canada, China, Hong Kong,
Hungary, India, Ireland, Japan, Malaysia,
Mexico, the Netherlands, Poland, Romania,
South Africa, Singapore, Spain and
Switzerland. The Group uses an informal cash
pooling facility to ensure that its operations
outside the UK are adequately funded, where
principal receipts and payments are
denominated in euros and US dollars. For
countries within the Eurozone, the level of
non-euro denominated sales is small and, if
material, the Group’s policy is to eliminate
currency exposure through forward currency
contracts. For our North American operations,
most transactions are denominated in
US dollars.
For the UK, the majority of sales and
purchases are denominated in pounds
sterling and any material trading
exposures are eliminated through forward
currency contracts.
The Group has been successful in winning
international Services contracts, where
Services are provided in multiple countries.
We aim to minimise currency exposure by
invoicing the customer in the same currency
in which the costs are incurred. For certain
contracts, the Group’s committed contract
costs are not denominated in the same
currency as its sales. In such circumstances,
for example where contract costs are
denominated in South African rand, we
eliminate currency exposure for a foreseeable
period on these future cash flows, through
forward currency contracts.
In 2022, the Group recognised a loss of
£2.5 million (2021: loss of £0.9 million) through
other comprehensive income in relation to
the changes in fair value of related forward
currency contracts, where the cash flow
hedges relating to firm commitments were
assessed to be highly effective.
The Group reports its results in pounds
sterling. The weakness of sterling against
most currencies during 2022, in particular the
US dollar, positively impacted our revenues
and profitability as a result of the conversion
of our foreign earnings. The euro exchange
rates during the year were not materially
dissimilar to those seen in 2021.
The impact of restating 2021 results at 2022
exchange rates would be an increase of
£135.4 million in 2021 revenue and an increase
of £2.8 million in 2021 adjusted1 profit
before tax.
Credit risk
The Group principally manages credit risk
through customer credit limits. The credit
limit is set for each customer based on its
creditworthiness, using credit rating agencies
as a guide, and the anticipated levels of
business activity. These limits are determined
when the customer account is first set up and
are regularly monitored thereafter. There are
no significant concentrations of credit risk
within the Group. The Group’s major customer,
disclosed in note 4 to the Consolidated
Financial Statements, is a hyperscale North
American technology company who typically
settles outstanding amounts on shorter than
average payment terms. The maximum credit
risk exposure relating to financial assets is
represented by their carrying value as at the
balance sheet date.
Going Concern
Computacenter’s business activities,
business model, strategic priorities and
performance are set out within this Strategic
Report from the inside front cover to page 81.
The financial position of the Group, its cash
flows, liquidity position and borrowing
facilities are set out within this Group Finance
Director’s review on pages 64 to 67.
In addition, notes 27 and 28 to the
Consolidated Financial Statements include
Computacenter’s objectives, policies and
processes for managing its capital, its
financial risk management objectives, details
of its financial instruments and its exposures
to credit and liquidity risk.
The Directors have, after due consideration,
and as set out in note 2 to the Consolidated
Financial Statements on page 155 of this
Annual Report and Accounts, a reasonable
expectation that the Group has adequate
resources to continue in operational
existence for a period of 12 months from the
date of approval of the Consolidated Financial
Statements, as set out on pages 150 to 202 of
this Annual Report and Accounts. Thus, they
continue to adopt the Going Concern basis of
accounting in preparing the Consolidated
Financial Statements.
Viability Statement
In accordance with provision 31 of the UK
Corporate Governance Code, the Directors
have assessed the Group’s prospects over a
longer period than the 12 months required by
the Going Concern Statement.
Viability timeframe
The Directors have assessed the Group’s
viability over a period of three years from
31 December 2022. This period was selected
as an appropriate timeframe for the
following reasons, based on the Group’s
business model:
• the Group’s rolling strategic review, as
considered by the Board, covers a three-
year period;
• the period is aligned to the length of the
Group’s Managed Services contracts, which
are typically three to five years long;
• the short lifecycle and constantly evolving
nature of the technology industry lends
itself to a period not materially longer than
three years; and
• Technology Sourcing has seen greater
recent growth than the Group’s Services
business, increasing the revenue mix
towards the part of the business that has
less medium-term visibility and is therefore
more difficult to forecast.
Computacenter plc Annual Report and Accounts 2022 | 67
For the current period, the primary downside
sensitivity relates to a modelled, but not
predicted, severe downturn in Group
revenues, beginning in 2023, simulating a
continued impact for some of our customers
from the Covid-19 crisis, a reduction in
customer demand due to the current
economic crisis, and ongoing impact on the
Group’s revenues from supply shortages.
This sensitivity analysis models a continued
market downturn scenario, with slower than
predicted recovery estimates, for some of our
customers whose businesses have been
affected by Covid-19 and a similar downturn
occurring for the remainder of our customer
base as a result of the emerging negative
global macroeconomic environment due to
the current economic crisis. A further impact
on the Group’s Technology Sourcing revenues
through the second half of 2023 from possible
ongoing vendor-related supply shortage
issues has also been included in the
sensitivity analysis.
Conclusion
Based on the period and assessment above, the
Directors have a reasonable expectation that
the Group will be able to continue in operation
and meet its liabilities, as they fall due, over
the three-year period to 31 December 2025.
Fair, balanced and understandable
The Board confirms that the Annual Report
and Accounts, taken as a whole, is fair,
balanced and understandable and provides
the information necessary for shareholders
to assess the Group’s position and
performance, business model and strategy.
Management undertakes a formal process
through which it can provide comfort to the
Board in making this statement.
Group Finance Director’s review continued
Further, the Directors monitor conditions in
the environment external to the Group and
have concluded that the following factors
continue to support the timeframe selected:
• the continuing macroeconomic, diplomatic
and trade environment, following the
departure of the UK from the European
Union, introduces greater uncertainty into a
forecasting period longer than three years;
• the prolonged macroeconomic impact of
Covid-19, and in particular the effect on
certain of our customers from the
worsening global economic outlook, and
the current increasing pace of change of
technology adoption as a result;
• continuing short-term product shortages,
resulting primarily from the Covid-19
impact on supply chains; and
• the likely short- to medium-term impact
of the Russian invasion of Ukraine on the
global macroeconomic environment, and
the current economic crisis, including an
exacerbation of supply chain issues currently
being experienced and higher inflation.
Whilst the Directors have no reason to believe
the Group will not be viable over a longer
period than three years, we believe that a
three-year period presents shareholders with
a reasonable degree of confidence, while
providing a longer-term perspective.
With regard to the principal risks set out on
pages 74 to 81, the Directors remain assured
that the business model will be valid beyond
the period of this Viability Statement. There
will continue to be demand for both our
Professional Services and Managed Services
businesses, and Management is responsible
for ensuring that the Group remains able to
meet that demand at an appropriate cost to
our customers. The Group’s value-added,
product reselling Technology Sourcing
business only appears vulnerable to
disintermediation at the low end of the
product range, as the Group continues to
provide a valuable service to customers and
technology vendors alike, as described on
pages 14 to 15. The Group has seen significant
business growth due to the end-to-end
Technology Sourcing and Professional
Services capability that it can deliver from
its Integration Centers, which is a significant
differentiating factor in this market.
Prospects of the Group assessment process
and key assumptions
The assessment of the Group’s prospects
derives from the annual strategic planning
and review process. This begins with an
annual away day for the Board, where
Management presents the strategic review for
discussion against the Group’s current and
future operating environments.
High-level expectations for the following year
are set with the Board’s full involvement and
are delivered to Management, which prepares
the detailed bottom-up financial target for
the following year. This financial target is
reviewed and agreed by Management before
presentation to the Board for approval at the
December Board meeting.
On a rolling annual basis, the Board considers
a three-year business plan (the Plan)
consisting of the detailed bottom-up financial
target for the following year (2023) and
forecast information for two further years
(2024 and 2025), which is driven by top-down
assumptions overlaid on the detailed target
year (2023). Key assumptions used in
formulating the forecast information include
organic revenue growth, margin impacts and
cost control, continued strategic investments
through the Consolidated Income Statement,
and forecast Group effective tax rates, with
no changes to dividend policy or capital
structure beyond what is known at the time of
the forecast. The financial target for 2023
was considered and approved by the Board
on 8 December 2022, with amendments and
enhancements to the target as part of the full
Plan considered and approved by the Board on
16 March 2023.
Impact of risks and assessment of viability
The Plan is subject to rigorous downside
sensitivity analysis, which involves flexing a
number of the main assumptions underlying
the forecasts within the Plan. The forecast
cash flows from the Plan are aggregated with
the current position, to provide a total
three-year cash position against which the
impact of potential risks and uncertainties
can be assessed. In the absence of significant
external debt, the analysis considers access
to available committed and uncommitted
finance facilities, the ability to raise new
finance in most foreseeable market conditions
and the ability to restrict dividend payments.
The potential impact of the principal risks and
uncertainties, as set out on pages 74 to 81, is
then applied to the Plan. This assessment
includes only those risks and uncertainties
that, individually or in plausible combination,
would threaten the Group’s business model,
future performance, solvency or liquidity over
the assessment period and which are
considered to be severe but reasonable
scenarios. It also takes into account an
assessment of how the risks are managed and
the effectiveness of any mitigating actions.
The combined effect of the potential
occurrence of several of the most impactful
risks and uncertainties is then compared to
the cash position generated throughout the
sensitised Plan, to assess whether the
business will be able to continue in operation.
68 | Computacenter plc Annual Report and Accounts 2022
Strategic Report s172 statement and non-financial information statement
s172 statement
When conducting any activity in his or her role
as a Computacenter plc Director, our Board
members must act in a way that they consider
is most likely to promote the success of the
Company for the benefit of its members as a
whole, having regard to a number of factors
set out in section 172 of the Companies Act
2006. These include the interests of our
employees, importance of fostering business
relationships with our suppliers and
customers, impact of our operations on the
community and environment, likely
consequences of any decision in the long
term, desirability of the Company maintaining
a reputation for high standards of business
conduct and the need to act fairly between
the members of the Company. Each Director
considers that they have acted in a manner
consistent with his or her section 172 duty
throughout the year.
The Board understands that without our key
stakeholders, the Company would not be able
to successfully implement its strategy, and
Our Purpose would be unachievable.
Understanding their interests, views and
concerns, and considering these when
reviewing and discussing matters put before
it for review or approval as part of its annual
programme, is critical to enabling the Board
to make informed decisions, and for each
Director to discharge their duty under section
172. In the sections set out in the table
opposite, we explain how the Company’s
programme of engagement with our key
stakeholders enabled our Board members to
do so.
In some cases, this engagement directly
involves the Board or its members, and this is
almost exclusively how engagement with our
shareholders takes place. Given the size and
geographic diversity of our business, the
majority of engagement with our customers,
technology vendors, people and communities
takes place at an operational level across the
organisation. Where this was the case, the
Board ensured that it had been updated on
the nature and outcomes of this engagement
during the year.
We have also set out the factors listed under
section 172 which the Board considered when
reviewing Board-level matters or making
decisions during the year. These can be found
on pages 94 to 95. The results of the Board’s
decision-making, and the outcomes produced
by each Director discharging their section 172
duty can be found throughout this Annual
Report and Accounts. Therefore, the following
sections have been incorporated by reference
into this section 172 statement and, where
necessary, the Strategic Report.
Sections incorporated into section 172 statement
Relevant information
• Technology Sourcing, Managed Services and Professional Services
• Our approach to the market
• Our business model, our investments and our strategic priorities
• Our performance in 2022
• Sustainability
• TCFD disclosures
• Viability Statement and Going Concern
• Non-financial information statement and stakeholder engagement
• Principal risks and uncertainties
• Board activity in 2022
• Reports of the Board’s Committees
Pages
14 to 17
18 to 19
20 to 23
24 to 37
38 to 53
54 to 57
67 to 68
69 to 73
74 to 81
94 to 95
98 to 133
Non-financial information statement
Computacenter aims to comply with the Non-Financial Reporting Directive requirements contained in section 414 of the Companies Act 2006.
This requires us to set out in our Annual Report and Accounts certain information on the non-financial matters listed below, including related
policies, due diligence and outcomes for those matters listed at sections 3-7.
Reporting requirement
1. Business model and non-financial key performance
indicators
2. Principal risks and impact of business activity
3. Employees
4. Social matters
5. Human rights
6. Anti-bribery and corruption
7. Environmental matters
Relevant information
• How we build sustainable value
• Strategic priorities
• Viability Statement
• Principal risks and uncertainties
• Sustainability – people
• Stakeholder engagement – people
• Sustainability – people and planet
• Stakeholder engagement – communities
• Sustainability – people and planet
• Sustainability – planet
• Sustainability – governance, ethics and compliance
• Sustainability – planet
• TCFD reporting
Page
18 to 21
22 to 23
67 to 68
74 to 81
42 to 45
71
42 to 52
73
42 to 52
46 to 52
53
46 to 52
54 to 57
Computacenter plc Annual Report and Accounts 2022 | 69
Stakeholder engagement
Our key stakeholders
enable Computacenter
to create value for them
Our
customers
Our people and technology vendors provide us with expertise and leading digital technology
that underpins the competitiveness of our customer offering. Our customers place their
trust in us to Source, Transform and Manage their digital technology to help them change
the world. Our shareholders provide capital support that allows us to build a sustainable
business for the long term, whilst the communities in which we operate support the social,
economic and personal interests of our other key stakeholders. Collectively, they are an
indispensable part of how we do business. Having their support, and ensuring that we
address their views, interests and concerns where we can do so, is of paramount importance
to us.
Why we engage and what matters to them
Our Winning Together Values are unambiguous:
we put our customers first, we keep our
promises to them, and we always prioritise
the long term in our dealings with them.
Our Purpose is helping our customers change
the world. One of our principal risks is that we
fail to invest appropriately to maintain our
competitiveness. We can only support our
customers and mitigate against this risk
through a deep understanding of their current
and likely future needs and views, including
general market trends, ensuring that our
offerings and investment decisions are
aligned with these.
Our collaboration with customers requires
continuous two-way engagement, so we can
adapt with them as their digital environments
and related technology needs evolve. They
expect us to be responsive to their
requirements, and flexible, commercial, and
creative in how we deal with these, adding
value and delivering services to them in a
way which reflects agreed terms, and is safe
and sustainable.
Our principal forms of engagement with
them during the year and how this was fed
back to the Board
Day-to-day engagement with our customers
takes place through a wide variety of
channels, generally covering our levels of
customer service and performance, and
future commercial opportunities. This
engagement often includes face-to-face
meetings, customer training and workshops,
as well as dialogue through dedicated client
directors and account managers, our service
support functions and, where necessary, our
Country Unit and Group Management teams.
Regular meetings also take place between our
Chief Executive Officer or Group Executive
Committee members and key customers, to
discuss their view of Computacenter. Regular
customer surveys and other structured
mechanisms exist for obtaining feedback on
our performance. As part of this, the Board
reviews an external, independent survey of
our customers, covering various categories
and metrics of performance.
During the year, the Board received
presentations covering feedback on these
areas from our German and United Kingdom
management teams, and through the Chief
Executive Officer’s performance updates,
which included details of significant contract
bids and wins, and material customer issues
where they arose.
The outcomes of this engagement and how
this impacted Board decision making
Key feedback received from customers and
discussed by the Board included their demand
and investment capacity for IT infrastructure
and systems, and how their current and
future buying behaviours, both in terms of
volume and timing, were likely to be impacted
by any concerns around: the macroeconomic
outlook across some of our core European
countries; IT supply chain issues which were
prevalent in the first half of the year, but
generally unwound thereafter; and rates of
inflation, especially in the United Kingdom.
This has allowed the Board to set, on an
informed basis, realistic but stretching
financial targets for 2023, and to understand
how and when the expected build-up of
inventory held by the Group was likely to
unwind, impacting the Group’s net funds
position and use of working capital. This
enabled the Board to guide the market on this
issue in its trading updates during the year.
The Board also reviewed the results of an
external, independent customer survey, which
showed that Computacenter was perceived to
be particularly strong in end-user services,
and that it had high levels of customer
satisfaction in each of its core countries. This
review enhanced the Board’s understanding
of our target market and competitive
positioning, including how existing or
potential customers viewed the performance
of our competitors across defined segments
and geographies.
Customer feedback and analysis was also key
in allowing the Board to review and approve
Management’s recommendations for the
Group’s three-year strategic plan for
2023-2025, including judgements in which
areas Computacenter should develop its
customer-value proposition in order to gain
competitive advantage and ensure
appropriate returns on invested capital, and
whether, how and when it should expand its
global reach and geographic footprint to
support existing and future customer
requirements. It also informed the Board’s
assessment of the level of investment
required for Computacenter to be able to grow
its customer base, enhance contribution from
key customers and grow market share within
our target markets.
These judgements, in turn, informed
additional Board decision making during 2022,
including the approval of acquisitions that
align with the Group’s strategic objectives,
such as the acquisition of BITS in the United
States. Understanding areas of customer
focus, including information security and
sustainability, assisted the Board in
identifying areas of investment, such as in our
ongoing cyber security programme, IT
services management tooling and our IT
roadmap project, when approving the 2023
budget. Presentations to the Board
concerning two material Managed Services
bids which required, and were given, Board
approval in 2022, has allowed Directors to
understand specific customer priorities,
including the balance between pricing,
service quality and the allocation of risk
under proposed deal terms.
The Board also received a presentation by
the Group’s Chief Commercial Officer which
included analysis on changes in customer
buying behaviours driven by Brexit, Covid-19,
global shortages and constraints, and
inflation, and around the importance of
automation to long-term growth and scale
within our Integration Centers. As a result, the
Board approved a related £3 million investment.
70 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Our people
Why we engage and what matters to them
Our people are at the centre of what we do
and are essential for our future growth. They
implement and promote our culture, as set
by the Board, on a day-to-day basis.
Externally, they represent Computacenter
when interacting with our other key
stakeholders, building relationships,
generating long-term trust, and developing
knowledge of their requirements and
preferred ways of operating.
We want to attract, retain and develop
people who understand and promote our
strategy, performance, culture, values and
Our Purpose. Failure to recruit and retain the
right calibre of people to our talent pool is
one of our principal risks (as set out on page
81). Clear, consistent and frequent
engagement with our people, and the groups
that represent them, helps us to mitigate
this risk, understand their key challenges
and concerns, and what they perceive these
to be for the Group.
Our people expect us to provide fair and safe
working conditions for them, and to help
create an environment where they can get
the best out of themselves. Engagement
allows us to understand how we can
continually strive to do this better.
Our principal forms of engagement with
them during the year and how this was fed
back to the Board
Our nominated Non-Executive Director for
Workforce Engagement, Ros Rivaz, completed
a programme of engagement which the Board
approved at the beginning of the year. She met
with a number of Works Councils and
employee representative groups, including
from one of our key emerging locations,
Computacenter India. Having been in the role
since 2017, she brings a balance of
independence and knowledge of the Group, as
well as expertise and experience in employee-
related matters such as remuneration. She
presented to the Board on multiple occasions
during the year.
Engagement with our employees also takes
place through Management meetings with
formal employee representative groups, such
as our Works Councils in Europe and our
‘MyForum’ body in the United Kingdom, which
involve two-way interaction and feedback,
and employee Q&A sessions, driving change
through discussion. The Chief Executive
Officer’s ‘This Week’ email is sent on a weekly
basis to all employees, covering topics of
interest such as business performance and
trends, as well as Board and senior
Management views on those areas. Employees
are given the opportunity to provide their
views and feedback to the office of the CEO
(via a dedicated email address) on the topics
addressed and views given.
Feedback from employees also asked for
more effective and frequent communication
of the Group’s sustainability objectives, and
the progress made against these. Following
direction from the Board, full details of our
environmental commitments and journey are
clearly communicated to our people through
our Group-wide ‘ONE CC’ intranet.
Engagement across our core countries has
made clear the impact of inflation on our
employees in 2022, including the cost of living
crisis in the United Kingdom. This was fed back
to the Board and Remuneration Committee
as part of direct updates from the Chief
Executive Officer and the Chief People Officer.
Following its discussions, and as proposed by
Management, the Board approved an
unscheduled one per cent salary increase for
all employees with effect from 1 April 2022
(except for the Executive Directors and Group
Executive Committee members). Scheduled
Group salary reviews were carried out at the
end of the year, resulting in an average uplift
of salary for employees across the Group
during the year of approximately 6.1 per cent.
The Board considered this an appropriate
balance between helping to mitigate the
impact on employees, whilst ensuring a
sustainable cost base for the business
moving forward.
Further feedback from employees provided to
the Board included requests for: increased
clarity and transparency of career pathways;
more effective communication in advance of
significant change programmes; and
education of our people at more junior levels
on the Group’s strategy. The Board directed
Management to respond to each of these areas.
Engagement also happens on an ongoing
basis at all levels across Computacenter, as a
result of the management structure in place,
and the supporting activities of Group Human
Resources. This ensures that the issues and
feedback raised are considered and escalated.
The transparent, effective communication that
results is further supported by the operation
of an independent, external Speak Up hotline,
from which relevant reports submitted by
employees are reviewed by the Audit
Committee on behalf of the Board.
The Group clearly communicates its
expectations of our people in how they
represent Computacenter and conduct
themselves in doing so, through a
comprehensive set of policies and training,
focused on areas which develop, support and
protect them. Group-wide employee surveys
are also carried out on a biennial basis, with
smaller Group function or geography-specific
surveys being completed on an ongoing basis.
The results in 2022 were presented to the
Board twice by the Chief People Officer.
The outcomes of this engagement and how
this impacted Board decision making
Employees had a range of views concerning
the importance of office attendance, including
on the ability of our people to collaborate and
communicate effectively when not in a
face-to-face environment, and its impact on
the Group’s culture and operating
performance. This feedback was incorporated
into the Board’s discussions on the Group’s
culture, with specific reference to ensuring
that it continues to be embedded effectively,
especially for new joiners and in office
locations geographically distant from our
main operating countries. The Board
recognised the increasing importance of
clarity of Our Purpose, and comprehensive
communication of it, for Computacenter to
sustain its culture in a hybrid working
environment. Having directed Management to
review it, the Board approved a refreshed and
updated Our Purpose. This can be found on
page 7.
Computacenter plc Annual Report and Accounts 2022 | 71
Stakeholder engagement continued
Our shareholders
Company’s dividend policy, which the Board
decided to leave unchanged; the refinancing
approved by the Board of its revolving credit
facility completed during the second half of
the year; and the Company’s retention of its
Treasury Shares.
There was also particular interest in the
Group’s succession planning for the Executive
Directors, which is discussed frequently at
Board and Committee level. This priority is
shared by the Board which, primarily through
the work of the Nomination Committee, has
been focused during the year of succession
planning for the Group Finance Director. Its
preparations assisted in the identification
and approval of the role specification and
subsequent appointment process, which
resulted in the appointment of Christian Jehle
as Chief Financial Officer with effect from
June 2023.
Performance-related areas of interest from
shareholders included the United Kingdom
business performance, how Services margins
would be impacted by the unwinding of
Covid-19-related benefits, and over what
timeframe the increased levels of inventory
held by the Group, due to supply chain
shortages in the IT industry, would normalise.
The Board has ensured that these issues were
addressed in the Group’s performance
updates to the market during the course
of the year.
Through periodic updates from the
Remuneration Committee Chair, the Board
was also made aware of the views of
shareholders responding to the Company’s
consultation exercise over its proposed
approach to the revised Directors’
Remuneration Policy. The positive feedback
received from shareholders concerning the
appropriateness of the existing Policy
assisted the Board in approving, on the
recommendation of the Remuneration
Committee, that the revised policy should not
contain any material changes and that
Computacenter’s executive remuneration
framework should be left largely unchanged.
Why we engage and what matters to them
Our shareholders want an appropriate return
from their investment in Computacenter.
To help them achieve this, and make effective
investment decisions, they want to
understand our strategy, our current or
projected operational or financial
performance, and our approach to
environmental, social and governance (ESG)
matters. Shareholders have different risk
appetites, and different preferences for
capital or income-based returns and the time
horizon for delivering those returns.
Two-way engagement helps Management and
the Board to understand shareholders’ range
of views on specific issues and allows current
and potential shareholders to make informed
decisions concerning investment in
Computacenter.
Our principal forms of engagement with
them during the year and how this was fed
back to the Board
The Chair and the Company Secretary
undertake a governance roadshow with
significant shareholders following the release
of the Annual Report. The Executive Directors
hold shareholder meetings and roadshows
during the year, following the release of the
Group’s full-year and half-year results, for
which they also give presentations to sell-side
analysts and institutional shareholders.
Following these meetings, the Group’s brokers
conduct follow-up interviews with
shareholders and analysts and produce
reports which are reviewed by the Board at its
following meeting. These reports include
existing and potential shareholders’
articulation of the investment case in
Computacenter plc shares, including
attractions or barriers to investing, as well as
their view on the Group’s recent performance,
and perceived opportunities and challenges.
Computacenter also offers shareholders the
opportunity to meet the Directors and ask
questions at the Company’s AGM. In 2022, the
Company consulted with major shareholders
to get their views on the Group’s Directors’
Remuneration Policy, with a view to
incorporating these in the revised Directors’
Remuneration Policy being put to
shareholders at the AGM in May 2023. Further
details on the consultation process, and its
outcomes, are available in the Directors’
Remuneration Report on page 110.
The Company also communicates with its
shareholders through its regulatory
announcements, and our Annual Report
updating them on strategy, performance
and governance. The Company Secretary
receives ad hoc queries and comments
from shareholders during the year, and these
are discussed with the Chair and, where
appropriate, included within updates to
the Board.
The outcomes of this engagement and how
this impacted Board decision making
Feedback from our institutional shareholders
focused on a number of areas. These included
significant interest in the opportunity,
strategy and prospects for growth in the
United States business, and the pace of
integration of recent United States
acquisitions. Board discussion, which
incorporated this feedback, concluded that
whilst the United States business continued to
grow organically, Computacenter would take
additional acquisition opportunities to
improve its positioning where they
represented a compelling strategic and
cultural fit with the Group.
This resulted in the identification and
acquisition of BITS during the year, which will
give Computacenter a much stronger presence
in the Mid-West of the United States, bringing
with it a high calibre of people and leadership.
As in previous years, there was focus on the
Company’s share price against its peers
across relevant geographies and sectors.
As a result, the Board directed that
representatives of our broker present to it on
this, to enhance its understanding of factors
that drive the share price. This enabled the
Board to assess and consider these factors in
its decision making during the year, whilst
balancing these against its risk appetite.
Shareholders also showed interest in the
Group’s priorities for its use of cash, including
a range of views around the attractiveness of
share buybacks, and further acquisitions in
the United States. These were reflected in
Board discussions and decision making
concerning: the quantum of dividend
declarations (which the Board considered,
and balanced against other stakeholder
interests concerning our balance sheet
strength, investment capacity and long-term
viability of the Group), resulting in a 2021 final
dividend of 49.4 per share and a 2022 interim
dividend of 22.1 per share; approval of the
72 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Our
technology
vendors
Our
communities
Why we engage and what matters to them
Our technology vendors are critical for us, and we invest time and
effort in ensuring that our relationships with them remain robust and
healthy, for mutual benefit. We aspire to be their preferred route to
market for our chosen customer target market, and they benefit from
our customer intimacy, which comes from our focus on long-term,
multi-level strategic relationships.
Through engagement with our customer teams and by working in
partnership, we add value and drive customer satisfaction with our
technology vendors’ products. To facilitate that and enable us to grow
together, we need to maintain strong and sustainable working
relationships, on both a day-to-day and strategic level, covering
operational, engagement and commercial support.
Our principal forms of engagement with them during the year and
how this was fed back to the Board
Our technology vendors’ customer-aligned sales and technical
personnel and our sales, technical and services teams engage
regularly to ensure strong working partnerships, on a customer-
by-customer basis. The Group Technology Sourcing team formally
engages with our technology vendors on a day-to-day basis, as well as
at management and executive level, to maintain strong partnerships
and to continue to deliver operationally and strategically. Technology
vendors share product and strategy information at multiple formal
and informal events during the year, to enable us to fully support our
customers’ initiatives and business planning.
This requires both technical and commercial engagement across
Computacenter and includes inviting representatives of our
technology vendors to speak at our Group-wide annual sales event,
at which the Board is present, where they communicate their latest
technical innovations, their view of how our organisations can most
effectively work together and their areas of focus for the year. The
Board received updates from the Chief Executive Officer, Chief
Commercial Officer, and other members of the senior Management
team on the views of our technology vendors and reviewed the Group’s
Technology Sourcing strategy and tooling capabilities.
The outcomes of this engagement and how this impacted Board
decision making
A focus of engagement with technology vendors has been to understand
their latest views on the supply chain issues impacting the IT industry,
which were particularly prevalent during the first three quarters of the
year. Engagement helped to give early visibility of particularly acute
supply chain issues within specific technology vendors or by lines of
business, including networking, data center and workplace, and also
allowed Management to form a view and update the Board on the likely
duration of the issues, and importantly when the constraints were
likely to ease. It also allowed the Board and Management to assess the
resulting challenges and space issues within the Group’s Integration
Centers as a result of increased inventory.
This engagement helped to inform the Board’s discussions around the
Group’s cash position, and its approval of related statements made by
the Group in its performance updates during the year. Understanding
the global supply chain issues in detail was part of the Board’s
assessment, given increased levels of inventory and parts, in
approving a £3 million automation solution for our Integration Centers.
For further detail on how the Board considered the interests of our
technology vendors during the year, please see pages 94 to 95.
Why we engage and what matters to them
We seek to build long-term trust with our stakeholders. These include
the communities in which we, and our other stakeholders, live and
work. Our local communities support our ability to do business and
supporting them in return is our responsibility. By doing so, we aim to
inspire our people, to illustrate more widely our commitment to
understanding people matter (one of our core values), and to maintain
and enhance our corporate reputation. Our local communities are
interested in ensuring that our operations are sustainable and safe,
so that the positive economic and social impact that Computacenter
has on them is protected over the long term and increases over time.
They expect us to engage with them on social and environmental
issues that matter to them, including areas such as diversity and
inclusion, and the sustainable use of resources within our operations.
They also expect us to act ethically, to treat our stakeholders fairly and,
where possible, to support them financially or with our time.
Our principal forms of engagement with them during the year and
how this was fed back to the Board
Our engagement is primarily focused on school, community and
university outreach programmes, with a focus on encouraging young
people to take up science, technology, engineering and mathematics
(STEM) careers, thereby addressing skills shortages, increasing
diversity across STEM, improving social mobility and raising
aspirations. Over 140 employee volunteers supported our educational
outreach programme, Bright Futures, during 2022, reaching over
34,000 students and young adults. The Bright Futures’ mission is to
support the next generation of young people by inspiring them to
follow a career in technology. For further information on our
engagement with our local communities, please see pages 38 to 52.
The Board received frequent updates from the Group Development
Director on our activities to engage with and support our local
communities, and our commitments and reporting relating to the
environment and climate change.
The outcomes of this engagement and how this impacted Board
decision making
Our engagement in schools and universities makes clear the
importance that many within those environments place on preventing
climate change, including through the reduction of carbon emissions,
as well as encouraging and increasing diversity across all areas of
society. As explained in more detail on pages 38 to 52, the two areas
are central pillars of the Group’s approach to ESG which is periodically
reviewed and approved by the Board – our ‘People, Planet and
Solutions’ approach. Feedback from engagement, along with the wider
views, interests and expectations of our local and national
communities, are considered by the Board when setting the Group’s
environmental targets and commitments, such as being Net Zero by
2040, and in its direction that the Group be carbon neutral in 2022.
The environmental and social objectives set for the Executive Directors,
as part of their 2022 annual bonus targets, by the Remuneration
Committee on behalf of the Board included a corporate objective to
increase gender diversity across the organisation, as well as the
continued development of climate change initiatives by the Company.
Whilst not specifically related to feedback from our communities, the
Board also considered their interests and expectations when reviewing
the Group’s Modern Slavery Act statement and Gender Pay Gap reporting
during the year.
Computacenter plc Annual Report and Accounts 2022 | 73
Principal risks and uncertainties
Our risk governance model
The Board
Nomination
Committee
Remuneration
Committee
Executive
Committee
Audit
Committee
First line of defence
Second line of defence
Third line of defence
Risk ownership and application
of internal controls
Compliance, oversight
and assurance functions
Independent assurance
Country-specific Management
Managed Services
Group Commercial Management
& Assurance
Group Finance
Group Information Security
Group Human Resources
Group Legal & Compliance
Group Information Assurance
Country-specific Take-on
Group Quality Management
& Assurance
Group Internal Audit
Group Risk
Committee
Group Compliance
Steering Committee
Anti-bribery & Corruption
Competition Law
Export Control
Whistleblowing
Data Protection
Environmental
Health & Safety
74 | Computacenter plc Annual Report and Accounts 2022
Strategic Report Risk identification and impact
Risk assessment and reporting are designed
to provide the Board with a Group-wide
perspective of key risks.
The Group Risk Committee, which reports to
the Audit Committee, meets four times per
year and reviews our principal risks, which are
the main barriers to meeting our strategic
goals, on an ongoing basis. This top-down
approach includes assessing whether
emerging risks are sufficiently significant to
warrant inclusion in the Group Principal Risk
Log. If so, the likelihood of occurrence and
potential impact are considered, and the risk
is subject to regular review. Regular reporting
to the Group Risk Committee by the respective
risk owners includes an assessment of the
likelihood and cost impact of each risk, a
consideration of non-financial impacts, risk
appetite, key risk indicators, potential risk
triggers and an assessment of mitigating
controls. The Group Principal Risk Log is
reviewed by both the Audit Committee and the
Board. The key risks are considered further in
relation to the long-term Viability Statement
(see pages 67 to 68).
Other lower-level risks outside the principal
risks are identified and analysed in two ways.
These are:
1. Through the bottom-up Group Operating
Business Risk Assessment process (GOBRA),
which is completed by over 100 managers
across the business. The results of this
process are reviewed by the Group Risk
Committee. This includes validating these
risks against the principal risks, to ensure that
all potential threats are considered. Lower-
level risks are often triggers for crystallising
principal risks, so their careful management
remains an important consideration.
2. Via the Group Compliance Steering
Committee (see risk governance model)
which assesses reports from the Compliance
Management System for the areas under
its remit.
Infrastructure: cyber security remains at the
forefront of discussions for the Board and at
both the Risk and Audit Committees. Cyber
security risks are increasing due to the
greater activity of a range of cyber threat
actors, including nation states, worldwide.
This greater activity has resulted in more
sophisticated and more frequent cyber
attacks against IT infrastructure.
Computacenter, along with other companies
of a similar size and profile that operate
within our sector, has been the target of cyber
attacks in recent years. Our defensive
systems and processes have, to date, ensured
that these attacks have been identified and
mitigated without any material impact on our
financial or operational performance.
However, the need to update some of our core
systems in the coming years increases the
overall risk profile.
Financial: we continue to concentrate on the
fundamentals for our business, including the
effective management of working capital.
The current volatile macroeconomic situation,
especially in relation to inflation, interest rate
increases and potential recession is also a
cause for concern, increasing our financial
risk overall.
People: our people remain integral to the
continued success of our business. The risks
reflect the importance we place on
experience, inclusivity, openness and
collaboration but there has been no change
to the risk profile.
Risk appetite
Our risk appetite is strongly influenced by
our experience in our industry sector. At an
operational level, we have a higher risk
appetite for business development where we
have experience of the risks and a lower risk
appetite where we have less experience.
This is supported day-to-day by our operating
policies and governance processes, which
include decision-making support and authority
over new contracts and contract changes.
Risk culture
Risk management and governance processes
are well established and understood within
the business and operate at all levels.
Strategic-level risks are monitored by the Risk
and Audit Committees, as well as by the Board.
Lower-level operational risks are identified,
analysed and mitigated at a functional level
on an ongoing basis, using well-embedded
processes.
Risk overview
Our long-term success is built on a clear
strategic direction, contractual and
operational excellence and effective business
services functions, such as Finance, Human
Resources, and Legal and Compliance, which
support customer-facing employees to fulfil
their obligations effectively. All of this is
underpinned by an advanced IT
infrastructure, hosting both internal and
customer platforms. Our strategic,
contractual and infrastructure risks are
largely determined by the industry in which
we operate and our long-term approach to
adding value. Our financial and people risks
are defined by the wider economic
environment, the way we run our business
day-to-day and our long-term employee
needs. While outside factors are beyond our
control, our risk management approach is
committed to managing the impact of these
influences, while controlling the internal
elements vital to our success.
Risk trends
The overall risk landscape has changed due to
specific threats and our response to them as
discussed below.
We use the three lines of defence model with
regards to the assurance over key risks. This
includes a mapping exercise which considers
the level of assurance afforded by each of the
compliance and oversight functions, when
considering the overall level of assurance
provided over each risk. To aid the appreciation
of the risks facing the Group, we have
categorised them into five main areas.
Strategic: the strategic-level risk profile is one
of long-term risk due to technological change,
including Computacenter’s ability or
otherwise to innovate effectively, and the
global nature of our operations exposing us to
specific political and economic influences.
While our response continues to mature in line
with market and customer changes, the
prioritisations we will need to make in the next
few years increase the risk trajectory overall.
Contractual/Operational: our main focus
remains on the effective governance of
contracts, both in the pre-deal phase and in
delivery. We continue to extend the use of our
Service Quality Management framework to
improve the underlying quality of sales, bid
governance and operations. We also continue
to recognise the need for effective acquisition
integration, and compliance and reputational
risks in relation to data privacy and ESG
matters as principal risks. We recognised
supply chain shortages as a principal risk for
the first time this year. Overall, we believe the
main contractual and operational risks have
remained at the same level, underlined by
our robust governance structures we have
in place.
Computacenter plc Annual Report and Accounts 2022 | 75
Principal risks and uncertainties continued
Risk Management framework
The Board
• Sets strategic objectives
• Has overall responsibility
• Defines risk appetite
for the Group’s risk
management process
and internal control
systems
Top-down
• Monitors risk exposure in
pursuit of our strategic
objectives
Identification and
assessment of risk
by senior Management
Audit Committee
Group Risk Committee
Internal Audit
• Reviews the
effectiveness of
our risk
identification and
risk management
process
• Reviews the
effectiveness of
internal control
systems
• Supports the Board
in monitoring risk
exposure
Operational level
• Group-wide risk
identification and
assessment
• Sets the risk
management
process
• Provides oversight
and challenge on
the effectiveness of
risk mitigation for
our principal risks
• Considers emerging
risks and also
high-impact/
low-likelihood risks
• Internal Audit plans
are focused on
providing
assurance on our
principal risks to
assist the Audit
Committee in its
review of the
effectiveness of the
risk management
process and of our
internal control
systems
• Internal controls
embedded across
the Group
• Ongoing monitoring of
mitigations performed
across the Group through
management, key
performance indicators
and review by the
appropriate Risk Manager
Bottom-up
Identification, assessment
and mitigation of risk for
business and functional
areas, delivered through
our Group Operating Model
and GOBRA
76 | Computacenter plc Annual Report and Accounts 2022
Strategic Report The risks presented below are the principal risks that existed during 2022, as reported in the Annual Report and Accounts 2021 and were modified
during the year through the risk identification and impact process.
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
Our four strategic priorities
RISK CATEGORIES:
Strategic risks
Market shift in technology usage
Increasing global nature of operations
Contractual and operational risks
Lack of effective pre-contract processes
Lack of effective post-contract delivery
Supply chain shortages
Acquisition integration
Compliance/reputational risk
Infrastructure risks
Cyber threat
Integrity failure of critical systems
Financial risks
Ineffective working capital management
Heightened macroeconomic factors
People risks
Poor employee recruitment and retention
Inadequate succession planning
Group risk log 2022 heat map
3
1
4
2
5
d
o
o
h
i
l
e
k
i
L
Impact
1. Strategic risks
2. Contractual and operational risks
3. Infrastructure risks
4. Financial risks
5. People risks
Increased risk
Unchanged risk
Increased risk
Increased risk
Unchanged risk
Computacenter plc Annual Report and Accounts 2022 | 77
Principal risks and uncertainties continued
1. Strategic risks
Alert status
Increased in line with the need to prioritise our responses
Risks
• Market shift in technology usage, making what we do less
relevant or superfluous and we fail to invest appropriately to
defend our competitiveness
• The increasingly global nature of our operations exposes us to
additional and specific political and economic influences, such as
geopolitical risk relating to our operational base and changes in
the competitive landscape for certain business activities which
attract large global competitors
Principal impacts
• Reduced margin
• Excess operational employees
• Contracts not renewed
• Missed business opportunities
Mitigation
• Well-defined Group strategy, backed by an annual strategy
• Group Investments and Strategy Board, which considers
process that considers our offerings against market changes
strategic initiatives
• Additional measures including CEO-led country, sector and win/
loss reviews
Risk owners
• Group Development Director
• Managing Director Managed Services
2. Contractual and operational risks
Alert status
Unchanged
Risks
• Lack of effective pre-contract processes, resulting in poor
design, costing and pricing, leading to loss-making contracts or a
failure to win bids
• Lack of effective post-contract delivery
• Failure to comply with applicable laws and regulations or meet
our commitments in relation to the protection of employees and
customers’ personal data, and in relation to environmental,
social and governance matters, leading to potential fines and/or
reputational damage with customers and other stakeholders
• Supply chain shortages leading to excessive working capital
investment and potential customer dissatisfaction
Principal impacts
• Customer dissatisfaction
• Financial penalties
• Contract cancellations
• Reputational damage
• Lack of effective acquisition integration and failure to deliver on
acquisition objectives
• Reduced margins
• Loss-making contracts
• Reduced service and technical innovation
78 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 2. Contractual and operational risks continued
Mitigation
• Mandatory governance processes relating to bids and new
business take-ons, including risk-based decision-making
assessments and new tooling
• Focus on service design excellence underpinned by associated
processes such as the Deal Lifecycle framework and Deal
Calculation Suite
• Board oversight of significant bids
• Early Warning System and assurance provided by the Group
Quality Management & Assurance function over key bids and
delivery programmes
• Regular commercial ‘deep dives’ into troubled contracts and
challenging transformation projects
• Close working relationship with key vendors
• Working closely with customers to stabilise scheduled deliveries
• Data privacy audit programme
• Security controls as described in the Computacenter Technical
and Organisational Measures
• Focus on data deletion to minimise storage of personal data
Risk owners
• Managing Director Managed Services
• Group Commercial Management & Assurance Director
• Group Legal & Compliance Director
3. Infrastructure risks
Alert status
Increased in line with change agenda
Risks
• Cyber threat to Computacenter’s networks and systems, arising
from either internal or external security breaches, leading to
system failure, denial of access or data loss. In addition, cyber
threats introduced by Computacenter to its customers’ networks
and systems, for whatever reason
Principal impacts
• Inability to deliver business services
• Reputational damage
• Customer dissatisfaction
• Appropriate due diligence and acquisition integration plans in
place, with ongoing monitoring of key risks to ensure success
• Board-endorsed Sustainability strategy
• Climate Committee oversees initiatives to reduce environmental
impact (see pages 47 to 48)
• TCFD disclosure (see pages 54 to 57)
• Strong Company culture and values (see pages 6 and 93)
• Oversight by the Compliance Steering Committee
• Strong corporate governance, risk management and ethics,
including policies and/or training for anti-bribery and corruption,
export compliance, competition law, health and safety
environment and Human Resources, in addition to a
whistleblowing hotline
• Group Development Director
• Chief Commercial Officer
• Major failure(s) leading to unacceptably long outages or regular
short outages of our customer-facing systems, leading to
customer dissatisfaction, financial penalties or contract
cancellations, damaging our reputation and ability to win
business. Failure to plan and execute effectively the replacement
of our core internal systems, leading to loss of growth
opportunities and business control
• Financial penalties
• Contract cancellations
Computacenter plc Annual Report and Accounts 2022 | 79
Principal risks and uncertainties continued
3. Infrastructure risks continued
Mitigation
• Well-communicated Group-wide information security and virus
protection policies
• Specific inductions and training for employees working on
customer sites and systems
• Specific policies and procedures for employees working behind a
customer’s firewall
• Ongoing and regular programme of external penetration testing
• Policies ensuring Computacenter does not run customer
applications or have access to customer data
• Regular review of cyber security controls and threat analysis by
Computacenter’s Group Information Assurance team
• Standing agenda item for each meeting of the Group Risk Committee
• All core systems are built and operated on high availability
infrastructure, clustered across the two data centers in Hatfield,
with disaster recovery capabilities provided in Germany
• All centrally hosted systems benefit from high availability data
center infrastructure, with resilience both within and across our
data centers in Hatfield. The two data centers run on separate
infrastructure and environment systems, and are powered by
separate energy sources
• All centrally hosted systems benefit from dual network
connectivity into core data centers. Internet bandwidth has been
materially increased to support greater use of cloud-based
services and the new software-defined wide area network.
Service delivery systems are designed such that a loss of the
core (in the data centers) does not impact our ability to continue
to accept voice calls from customers, to allow continuity of a
base service on our delivery sites, even in the event of major
issues in the core
• Ongoing work on our perimeter defences to help minimise the
risk that any attack on our non-core systems poses an additional
threat to our central infrastructure
Risk owner
• Chief Information Officer
4. Financial risks
Alert status
Increased in line with the higher level of inventory held and macroeconomic pressures
Risk
• Failure to manage working capital effectively
Principal impacts
• Financial impact through bad debts, obsolete inventory and/or
other working capital movements
Mitigation
• Implementation of debt management best practice, after
centralising Europe-wide collection functions at the Budapest
finance Shared Service Center (excluding recent North American
acquisitions)
• Group Credit Assessment function
• Group standard contract terms
• Detailed monthly monitoring by senior Management
Risk owner
• Group Finance Director
• Heightened macroeconomic factors specifically related to
inflation, interest rate increases and potential recession,
including energy shortages, leading to reduced demand for
our products and services and/or margin erosion
• To the extent that we cannot recover cost inflation, there is a risk
that we will not meet earnings expectations, which could impact
our financial reputation with shareholders and reduce the
share price.
• Inflation and prolonged recession could reduce demand for IT
projects and implementation and affect internal utilisation rates
of Professional Services employees
• Inventory management controls and monitoring
• Increasing use of direct delivery
• Minimise fixed-cost growth
• Careful management of contract margins
• More active approach to moving resources offshore
80 | Computacenter plc Annual Report and Accounts 2022
Strategic Report 5. People risks
Alert status
No change
Risks
• Failure to recruit and retain the right calibre of employees to our
talent pool, which includes acting as an inclusive employer, with
a focus on senior positions in sales, services and projects
• Inadequate succession planning or insufficient depth within key
Senior Executive positions
Principal impacts
• Lack of adequate leadership
• Customer dissatisfaction
• Financial loss
Mitigation
• Succession plan in place for the Board and two levels down in the
management structure
• Development programme in place for identified successors
• Regular remuneration benchmarking
• Incentive plans to aid retention
• Investment in management development programmes
Risk owners
• Group Chief People Officer
• Chief Executive Officer
• Contract cancellations
• Reputational damage
• Group Talent Acquisition function in core countries and focus on
talent analytics with a clear strategy
• Group leadership framework and development structure to
strengthen engagement with leaders and our potential leaders
• Regular employee surveys to understand and respond to
employee issues
• Specific diversity projects in place relating to accessibility and
wellbeing, life balance, LGBT+ and allies, future talent, focus on
women and culture
• Consistent performance management processes
This Strategic Report was approved by the Board on 6 April 2023 and was signed on its behalf by:
MJ Norris
Chief Executive Officer
FA Conophy
Group Finance Director
Computacenter plc Annual Report and Accounts 2022 | 81
Contents
Chair’s Governance overview
83
84 Governance at a glance
86 Board of Directors
88
Executive team
90 Corporate Governance report
98 Nomination Committee report
Risk and internal control
100
102 Audit Committee report
110
134 Directors’ report
139 Directors’ Responsibilities
Directors’ Remuneration report
Governance Report
GOVERNANCE
82 | Computacenter plc Annual Report and Accounts 2022
Chair’s Governance overview
Our approach to governance
ensures alignment between
the Group’s purpose, values,
strategy and culture and
that the organisation acts
in accordance with its risk
appetite as set by the Board.
Peter Ryan
Non-Executive Chair
Dear Shareholder,
On behalf of the Board, I am pleased to
introduce Computacenter’s Corporate
Governance Report for the year ended
31 December 2022.
Our Governance Framework
Computacenter’s Governance Framework
exists to support the achievement of Our
Purpose – to help our customers change the
world – and to create and protect shareholder
value. It represents a balance between
ensuring that the Board and its Committees
provide effective leadership for the Group and
have sufficient oversight and decision-
making involvement in areas such as strategy,
performance, governance and risk, whilst
enabling our colleagues to act with sufficient
independence and agility to respond to and
work effectively with our stakeholders.
Board decision-making
The Board delegates a number of its
responsibilities to its Committees, so that it
can focus on those areas deemed to be of
operational, financial or reputational
importance to the Group. Each of those
Committees has played an important role
during the year in supporting the Board with
its key decisions.
Through the work of the Nomination
Committee, the Board continued to evaluate,
on an ongoing basis, the skills it requires to
lead the Group in a manner which is effective
and entrepreneurial. This enabled the Board
to move quickly in appointing René Carayol to
the Board as a Non-Executive Director in
November 2022.
René has had a long, successful and varied
career, and is already bringing a fresh
perspective and approach to Board
discussions. The Nomination Committee also
played a central role in defining and then
leading the search process which resulted in
the appointment of Christian Jehle as the
Group’s Chief Financial Officer from June 2023.
It was a busy year for the Remuneration
Committee, which was involved in reviewing
and approving Christian’s remuneration
terms. It also spent significant time reviewing
the Group’s Directors’ Remuneration Policy,
following which a revised version is now being
proposed to shareholders for approval at the
upcoming Annual General Meeting.
At that meeting, the Company will also
propose the appointment of Grant Thornton
UK LLP as its new external auditor for the year
ending 31 December 2023. This follows the
completion of an external audit tender
process, which was led by the Audit Committee.
Further detail of the process, and its outcomes,
can be found within the Audit Committee
report on page 102.
UK Corporate Governance Code Compliance
This governance report demonstrates how
we applied the principles and complied with
the provisions of the Code during the year.
An explanation for our temporary non-
compliance with provision 20 of the Code
(solely in respect of the appointment of René
Carayol as a Non-Executive Director), which
states that open advertising and/or an
external search consultancy should generally
be used for the appointment of Non-Executive
Directors, can be found below and on page 90.
Following comprehensive succession planning
work undertaken by the Nomination
Committee during 2021, and the early part of
2022, the Board had identified specific skills
required from any upcoming Non-Executive
Director appointment, including experience
across areas including diversity and inclusion,
inclusive leadership and cultural
transformation across large organisations.
It was also aware of René’s expertise in these
areas, his likely availability, and also the
significant demand for the skills in the
market. The Board therefore authorised the
Company to approach René directly, following
which he completed our standard Non-
Executive Director appointment process and
was appointed to the Board and each of its
Committees. The Board has determined
René to be independent for the purposes of
the Code.
Our stakeholders
It remains critical that the Board is able to
understand the views and interests of our key
stakeholders – our customers, employees,
technology vendors, shareholders and the
communities in which we operate – and that
these are factored into and considered in the
decisions that it makes. Further detail on how
the Company and the Board engaged with our
key stakeholders, why that engagement is
important, and how the Board considered
them and other section 172 factors in its
decision making is set out on pages 70 to 73
and pages 94 to 95. Throughout 2022, we
remained engaged as an organisation in
listening to the views of our stakeholders and
ensuring that the Board was able to hear and
consider these.
Board evaluation
An externally facilitated evaluation of the
Board and its Committees took place during
the year and was run by an independent,
third-party provider, Board Excellence. Further
details of the process and its outcomes can
be found on page 92. Following consideration
of its outcomes by the Nomination Committee,
I am satisfied that the Board and its
Committees continue to function effectively,
and that their current constitution and range
of skills remain appropriate.
Peter Ryan
Non-Executive Chair
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 83
Governance at a glance
Key Board decisions in 2022
• Revised Directors’ Remuneration policy for
• Appointment of CFO-designate and new
• Approval of entry into revolving credit
shareholder approval
Non-Executive Director
facility
• Recommendation of new Group external
• Completion and review of externally
• Approval of acquisition of Business
auditor
facilitated Board evaluation
IT Source in the United States
Board tenure
Length of tenure for Chair and
Non-Executive Directors
Board composition
Board independence (excluding the Chair
who was independent on appointment)
1
1
1
1
0-1 years
1-3 years
3-4 years
4-5 years
5+ years
1
2
1 Non-
Independent
Directors
50%
2 Independent
Directors
50%
3
Board meeting attendance
Percentage attendance
97%
Committee membership
Only the Chair and Independent
Non-Executive Directors are
members of the Board’s
Committees.
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C
Peter Ryan
Mike Norris
Philip Hulme
Tony Conophy
Peter Ogden
Pauline Campbell
Ros Rivaz
Ljiljana Mitic
René Carayol
Attendance
record
8/8
Board member
and title
Peter Ryan
Non-Executive Chair and
Chair of the Nomination Committee
Mike Norris
Chief Executive Officer
Philip Hulme
Founder Non-Executive Director
Tony Conophy
Group Finance Director
Peter Ogden
Founder Non-Executive Director
Pauline Campbell
Independent Non-Executive Director
and Chair of the Audit Committee
Ros Rivaz
Senior Independent Non-Executive
Director, Chair of the Remuneration
Committee and Workforce
Engagement Director
Ljiljana Mitic
Independent Non-Executive Director
Rene Haas
Independent Non-Executive Director
René Carayol
Independent Non-Executive Director
8/8
8/8
8/8
7/8
8/8
8/8
8/8
6/7*
2/2*
*
René Carayol joined the Board with effect from 1 November 2022. Rene Haas stepped down from the Board with effect
from 1 December 2022.
84 | Computacenter plc Annual Report and Accounts 2022
Women representation
on Board
1
1 Women
33%
2 Men
66%
2
Board industry skills
and expertise
Wide range of skills, experience
and diversity of thought.
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T
I
Peter
Ryan
Mike
Norris
Philip
Hulme
Tony
Conophy
Peter
Ogden
Pauline
Campbell
Ros
Rivaz
Ljiljana
Mitic
René
Carayol
Governance Report
Our Corporate
Governance Framework
Shareholders
Own the company and provide capital support. Appoint the directors and auditors,
and consider resolutions put forward by the Company at shareholder meetings.
Directs the Company’s affairs, whilst considering the interests of shareholders and other stakeholders.
Oversees engagement with these parties. Further information on the role of the Board can be found on page 91.
The Board
The Board’s committees address matters delegated to them by the Board under their terms of reference,
which can be found at investors.computacenter.com. The key responsibilities of each committee are set out below.
Board committees
Nomination Committee
Audit Committee
Remuneration Committee
Keeps the composition of the Board
and its Committees under review,
and ensures orderly succession
planning for both the Board
and Senior Management.
Chair: Peter Ryan
Oversees financial reporting
and the effectiveness of external
and internal audit processes.
Chair: Pauline Campbell
Approves the Directors’ Remuneration
Policy, as well as the remuneration
outcomes for the Executive Directors
and Group Executive Committee.
Chair: Ros Rivaz
Committee report
on pages 98 to 99
Committee report
on pages 102 to 109
Committee report
on pages 110 to 133
Chief Executive Officer*
Responsible for running the Group on a day-to-day basis, and accountable to the Board for
the performance of the Group and the delivery of value to key stakeholders.
Supports the Chief Executive Officer in his duties, and accountable to him for the performance of the business.
Group Executive team
2022 Board activity and how the Board spent its time
Business performance
oversight
(2021: 23%)
24%
Strategy and delivery
of strategy
(2021: 30%)
33%
Financial performance
and risk
(2021: 24%)
22%
Governance and stakeholder
management
(2021: 23%)
21%
*
The Board delegates authority for managing the Group on a day-to-day basis to the Chief Executive Officer.
Computacenter plc Annual Report and Accounts 2022 | 85
Board of Directors
The Board plays a central
role in leading the Group
and promoting its long-
term sustainable success.
It has an appropriate
balance of independence,
knowledge and experience
which allows it to
discharge its duties
effectively.
Peter Ryan
Non-Executive Chair
Peter Ryan
Non-Executive
Chair and Chair of
the Nomination
Committee
Mike Norris
Chief Executive
Officer
N R
Committee membership:
Peter has, since 1980, had a successful
international career in technology
encompassing all dimensions of the industry,
including software, SaaS, services, systems
integration, outsourcing and infrastructure.
Peter has held roles such as Chief Sales
Officer with Hewlett Packard Enterprise, Chief
Client Officer at Logica plc and Executive Vice
President, Global Sales and Services with Sun
Microsystems Inc. Peter is also Chairman
of privately held Ocean Technology Group.
Mike graduated with a degree in Computer
Science and Mathematics from East Anglia
University in 1983. He joined Computacenter
in 1984 as a salesman in the City office.
Following appointments in senior roles,
he became Chief Executive in December 1994,
with responsibility for all day-to-day
activities and reporting channels across
Computacenter. Mike also led the Company
through flotation on the London Stock
Exchange in 1998. Mike was awarded an
honorary Doctorate of Science from the
University of Hertfordshire in 2010.
Philip Hulme
Founder Non-
Executive Director
Tony Conophy
Group Finance
Director
Committee membership key
A
N
R
Audit Committee
Nomination Committee
Remuneration Committee
Philip founded Computacenter with
Peter Ogden in 1981 and worked for the
Company on a full-time basis until stepping
down as Executive Chairman in 2001.
He was previously a Vice President and
Director of the Boston Consulting Group.
Tony has been a member of the Chartered
Institute of Management Accountants since
1982. He qualified with Semperit (Ireland)
Ltd and then worked for five years at Cape
Industries plc. He joined Computacenter in
1987 as Financial Controller, rising in 1991
to General Manager of Finance. In 1996, he was
appointed Finance and Commercial Director
of Computacenter (UK) Limited with
responsibility for all financial, purchasing and
vendor relations activities. In March 1998 he
was appointed Group Finance Director.
86 | Computacenter plc Annual Report and Accounts 2022
Governance Report Peter Ogden
Founder
Non-Executive
Director
Pauline Campbell
Independent
Non-Executive
Director and
Chair of the
Audit Committee
Ros Rivaz
Senior Independent
Director, Workforce
Engagement Director
and Chair of the
Remuneration
Committee
Peter founded Computacenter with Philip
Hulme in 1981 and was Chairman of the
Company until 1998, when he became a
Non-Executive Director. Prior to founding
Computacenter, he was a Managing Director
of Morgan Stanley and Co.
R
NA
Committee membership:
Pauline is a former PricewaterhouseCoopers
(PwC) Audit Partner who brings over 30 years
of experience in the profession. She has
worked internationally across a broad range
of sectors including IT services and support
services. Pauline also served on the
Governance Board of the UK firm including
the Public Interest Body and the equivalent
body at PwC’s Global Network, so brings
a wealth of governance experience. Pauline
was a Non-Executive Director of Micro
Focus International plc until its sale on
31 January 2023.
Ljiljana Mitic
Independent
Non-Executive
Director
René Carayol
Independent
Non-Executive
Director
R
NA
Committee membership:
Ros is the Senior Independent Director at
Victrex plc and Lead Independent Director at
Luxembourg-based Aperam SA. In the public
sector, Ros is Chair of the Nuclear
Decommissioning Authority and a Non-
Executive Director of the Ministry of Defence
– Defence Equipment and Support Board. She
is a Board Committee Chair or member at
each of her current portfolio companies,
which includes recent appointments to the
Board ESG Committee at two of these. She was
a Non-Executive Director at ConvaTec plc, RPC
Group plc, CEVA Logistics AG, Rexam plc and
Deputy Chair of the University of Southampton
for 10 years. Ros was previously Chief
Operating Officer for Smith & Nephew plc and
held senior management positions in global
companies including Exxon, Diageo, ICI and
Tate & Lyle Group.
A
R
N
Committee membership:
Ljiljana has more than 25 years’ experience in
the IT industry. She was Global Head of financial
services and a member of the executive
committee at Atos SE, following its takeover
of Siemens IT Solutions and Services GmbH,
where she headed the worldwide banking and
insurance sales business. Ljiljana has also
held senior roles at Hewlett-Packard and
WestLB AG. Since 2016, she has focused on
technology start-ups as a Senior Partner of
Impact51 AG. Ljiljana is a Non-Executive
Director of Grenke AG, a global financing partner
for small and medium-sized companies.
A
R
N
Committee membership:
After leaving university, René joined Marks
& Spencer where he worked for 10 years,
including as a Senior IT Manager, before
moving to join PepsiCo as IT Systems Director.
He subsequently moved to IPC Magazines
as CIO, staying with the business until it was
sold to AOL Time Warner. René is now an
experienced Executive Leadership Coach
and broadcaster, with much of his recent
work focusing particularly on areas
such as diversity and inclusion, inclusive
leadership and cultural transformation
across large organisations.
Computacenter plc Annual Report and Accounts 2022 | 87
Executive team
The Group Executive Team
supports the Chief Executive
Officer in the day-to-day
management of the business,
and provides high level
leadership for our operations
across Computacenter.
Mike Norris
Chief Executive
Officer
Tony Conophy
Group Finance
Director
Mike Norris has been
Computacenter’s Chief Executive
since 1994.
For further details on Mike’s skills
and experience please see page 86.
Responsible for all Group financial
activities, Tony Conophy has been
Computacenter’s Group Finance
Director since 1998.
For further details on Tony’s
skills and experience please see
page 86.
Reiner Louis
Managing
Director,
Germany
Julie O’Hara
Managing
Director,
Managed
Services
John Beard
Managing
Director,
Western
Europe
Reiner became Country Unit
Director for Germany in 2013,
accountable for all customer
relationships and engagements
in the region.
Joining the company in 1994 as
Head of Customer Services,
Reiner went on to hold various
managerial positions, leading a
variety of teams from sales to
consultancy. He was also
responsible for designing and
implementing the company’s
service management systems.
Julie is responsible for the delivery
of Services to Computacenter’s
customers worldwide.
Re-joining Computacenter in 2014,
Julie was responsible for all
services delivered to UK clients,
extending her scope globally in
2017. Julie spent two years at
Colt as VP for Services and
Solutions, where she ran Service
Management, Contract
Management, Consultants and
Architects across Europe. Prior to
this, she worked at Computacenter
and IBM in a number of technical
service and sales-related positions
and has been in the IT industry for
almost 30 years.
John leads Computacenter’s
business in UK, France and
Europe (except Germany) and
is accountable for all customer
relationships and
engagements in the regions.
John joined Computacenter’s
inaugural graduate scheme in
1995. He quickly became one
of the youngest recipients of
the company’s award for
exceptional sales achievement,
John has headed up a variety
of Computacenter’s vertical
sectors managing a number
of the UK’s largest customers.
88 | Computacenter plc Annual Report and Accounts 2022
Governance Report Lieven
Bergmans
Chief
Commercial
Officer
Fraser Phillips
Group Legal &
Compliance
Director
Mo Siddiqi
Group
Development
Director
Mark Slaven
Chief
Information
Officer
Lieven is responsible for the
Group’s Technology Sourcing.
He joined Computacenter in 2000
as Head of the Consulting Division
of the Belgian subsidiary. In 2008,
he was appointed Managing
Director of Computacenter
Benelux. He was responsible for
aligning the local business with
the Company’s portfolio of
services and Group solutions and
increasing market share. From
2015 to 2018, he brought stability
and growth to the French entity,
before taking on broader
responsibilities.
As Computacenter’s Group
Legal & Compliance Director,
Fraser advises on large
Services engagements,
particularly those involving
multiple partners. He took on
his current role in 2013 after
a six-year tenure as Head of
Legal in the UK. Fraser qualified
as a barrister in 1997 and has
extensive experience in
structuring, negotiating and
drafting commercial agreements.
Mo is responsible for
Computacenter’s Strategy,
Marketing, and the development of
smaller and new country markets.
Since joining Computacenter in
1997, he has held a number of
senior sales and operational
roles, notably leading the
Company’s international
development for over 15 years.
Mo has helped to shape the
company’s global positioning
through a mixture of organic
growth, customer wins, business
start-ups and acquisitions.
Mark joined Computacenter in
2001 as UK Information Services
Director. Following the
acquisition of the German
business in 2003 his role
expanded to cover all Group
companies as Group CIO.
He is responsible for all of
Computacenter’s systems and
infrastructure and has played
a key role in the design and
development of most of the
systems in use across the Group.
Jim Yeats
Group
Commercial
Management
& Assurance
Director
Sarah Long
Chief People
Officer
Neil Hall
President,
North America
Jim joined Computacenter in May
2018 and is responsible for
Security, Governance and Quality
in all Group Countries. Previously,
he was at Accenture for 10 years,
where his role was Global Quality
and Risk Managing Director for
Accenture’s Health and Public
Services business. He has also
held other leadership roles
including, Chief Executive Officer
of Edinfor at LOGICACMG; Vice
President for IT and Customer
Services at TXU; and an Associate
Partner at Andersen Consulting.
Jim has a BA (Honours) in Natural
Science from Cambridge
University.
Sarah has over 25 years’
experience in the Tech industry.
She originally joined
Computacenter in 1996 and spent
12 years in various Sales and
Service Leadership roles.
Between 2008 and 2018 she
consulted to a number of Tech
organisations across Europe,
advising on Strategic Growth and
Organisational Change. Sarah
re-joined Computacenter in
March 2019 to lead the Group
People Strategy and in-country
HR functions. Sarah graduated
from Manchester University with
a degree in Technology and Design.
Neil leads Computacenter’s North
American business.
Neil joined Computacenter in
2001 with the acquisition of
GE-CITS UK, and has held
leadership positions in the UK and
Germany for more than 15 years.
From 2013 to 2016, Neil led the
Group’s strategic development in
contractual services, including
architecture, commercial
offerings and client engagements.
Between 2016 and 2022 he
successfully led our UK & Ireland
business as Managing Director.
Computacenter plc Annual Report and Accounts 2022 | 89
Corporate Governance report
Compliance with the Code
The Board is committed to ensuring that a strong corporate
governance structure is in place, that is appropriate for
Computacenter’s size and profile as a listed company, and
which is aligned with its purpose, values and culture.
Peter Ryan
Chair
Our approach to Compliance
As a company with a premium listing
on the London Stock Exchange,
Computacenter plc (the Company) is
required to report on how it has applied the
principles of the UK Corporate Governance
Code (the Code), published by the UK
Financial Reporting Council (FRC) in 2018.
A description of how it has done so is set
out on pages 83 to 139, which includes the
reports of the Board’s Committees and the
Directors’ report. A copy of the Code can be
found at www.frc.org.uk.
The pages that follow aim to provide our
stakeholders with an understanding of
how our Corporate Governance Framework
operated during the year, and the
outcomes that it produced during that
time. This framework is in place to ensure
that our organisation is appropriately led,
directed and controlled. It gives our people
clarity on their responsibilities and
accountabilities, and our decision-making
authorities, restrictions and processes,
helping to ensure that decisions are
properly made and then implemented
throughout the Group. In doing so, it helps
us to set and deliver our strategy, manage
our risks, create long-term shareholder
value and protect our reputation with our
stakeholders.
Application of Code Principles
• Board Leadership and Company Purpose
– pages 91 to 96
• Division of Responsibilities – page 96
• Composition, Succession and Evaluation
– pages 97 to 99
• Audit, Risk and Internal Control – pages
100 to 109
• Remuneration – pages 110 to 133
Statement of Compliance
The Company has complied with the provisions of the Code throughout the year ended
31 December 2022, with the temporary exception of provision 20 which states that open
advertising and/or an external search consultancy should generally be used for the
appointment of the Chair and Non-Executive Directors. As is explained on page 99, within the
Nomination Committee report, the Company used the search firm Russell Reynolds to assist
with the process that led to the appointment of Pauline Campbell in the second half of 2021.
The Nomination Committee completed, as part of that exercise, a detailed review of prospective
candidates available for Non-Executive Director appointments, and had clarity on the skills
required by the Board as part of any further Non-Executive Director succession, following
Pauline’s appointment.
As a result, on the recommendation of the Nomination Committee, the Company approached René
Carayol directly towards the middle of 2022, with a view to his appointment as a Non-Executive
Director, given his background in the industry, including as an IT systems director, Chief Information
Officer and his recent work, experience and expertise across diversity and inclusion, inclusive
leadership and cultural transformation across large organisations. Once René had indicated his
willingness to be put forward as a Non-Executive Director candidate, he was then subject to the
Company’s standard Director appointment process, including being interviewed by Board members
prior to appointment. The Board is delighted to have recruited somebody of René’s calibre. He brings
to the Board a diverse skillset, which will complement and support those of other Board members.
Statements and confirmations
The Directors are required to include the following statements or confirmations within the
Annual Report and Accounts:
• the Strategic Report from the inside front cover to page 81, provides an explanation of the
sustainability of the Group’s business model and the strategy for delivering the Group’s
objectives, and how opportunities and risks to the future of the business have been
considered and addressed;
• page 67 for the Group’s Viability Statement;
• page 100 for the statement on risk and internal control including confirmation that the Directors
have carried out a robust assessment of the principal and emerging risks facing the Group,
and pages 74 to 81 for a description of its principal risks, what procedures are in place to
identify emerging risks, and an explanation of how these are being managed or mitigated;
• page 67 for the status of the Group as a going concern;
• page 93 for an explanation of how the Board monitored the Group’s culture;
• pages 42 to 45, and pages 110 to 133 for the Group’s approach to investing in and rewarding its
workforce;
• page 68 for the Board’s statement on the Annual Report being fair, balanced and
understandable and providing the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy;
• page 91 and pages 94 to 96 for an explanation of how governance contributes towards the
delivery of the Group’s strategy; and
• page 69 for Computacenter’s section 172 statement, and pages 94 to 95 for a description of
the Board’s principal decisions during the year and how the interests of Computacenter’s key
stakeholders and the matters set out in section 172 of the Act were considered in Board
discussions and decision making.
90 | Computacenter plc Annual Report and Accounts 2022
Governance Report Ensuring Board effectiveness
CLARITY OF ITS ROLE AND
RESPONSIBILITIES
APPROPRIATE
DELEGATION
COLLECTIVE EXPERIENCE
AND DIVERSITY
Role of the Board
Delegated authority
Board composition
Our Corporate Governance Framework
enhances the Board’s effectiveness
allowing the delegation of authority for
certain matters or responsibilities to other
decision-making bodies. This allows the
Board to give key matters sufficient
attention and consideration within the
time constraints of its annual programme,
allowing it to delegate those powers and
responsibilities which it deems necessary,
subject to UK law and corporate
governance requirements. It also allows
the Board’s principal committees to help
support the successful execution of
Computacenter’s strategy. The
responsibilities of the Nomination
Committee include ensuring that the
Board, its Committees, together with the
Chief Executive Officer and the senior
Management team, have the right skills
and strength in depth to set an effective
strategy and successfully deliver it. The
Remuneration Committee’s work ensures
that key individuals are appropriately
incentivised to achieve the Board’s
strategic objectives, whilst ensuring that
decisions taken are aligned with the
Board’s risk appetite. The Audit Committee
independently assures the processes and
information which underpin and measure
the delivery of strategy.
The Board’s effectiveness is also
facilitated by its significant collective
experience, its diversity of gender,
ethnicity, length of tenure, sector
background and external experience, and
economic interest in the Group through
shareholding, amongst other factors. This
leads to a significant diversity of thought
and approach amongst members when
dealing with matters presented to the
Board by Management, within its annual
agenda. The diversity of our Board, and its
entrepreneurial leadership, is illustrated
within the ‘governance at a glance’ section
on page 84, and the ‘Members of our Board’
section on pages 86 and 87.
Through the work of the Nomination
Committee, the Board ensures that it has
an appropriate combination of skills,
experience and knowledge, given the
Company’s size, profile and sector in
which it operates. Over half of the current
independent Directors have been appointed
in the period since 2019, reflecting the
Board’s ongoing consideration of
members’ length of service and view that
its membership should be regularly
refreshed. There will also be a change in
Executive Director in June 2023, when
Christian Jehle joins the Board as Chief
Financial Officer.
• Largely defined by UK company law,
public company corporate governance
and listing requirements,
Computacenter plc’s Articles of
Association and our Matters Reserved
for the Board (see below)
• The Board’s primary role is to provide
leadership to the Group, promoting its
long-term sustainable success with
a focus on generating value for our
shareholders, and the interests of our
stakeholders
• The Board ensures that sufficient
resources are in place to deliver the
Group’s strategic aims and objectives
• The Board approves the Group’s strategy
and oversees Management’s execution
of it, including the setting of financial
and operational targets, and measuring
performance against these.
More detail on how the effectiveness of the
Board was assessed during the year can
be found on page 92. Details of how it has
promoted the long-term sustainable
success of the Company can be found
within the summary of the Board’s decision
making in 2022 on pages 94 to 95, in the
section explaining the Board’s oversight of
the Company’s engagement with the
Group’s key stakeholders on page 70, and
more widely throughout the Annual Report.
FOCUSING ON THE RIGHT THINGS
Matters reserved for the Board
• Ensures that the Board is focused on and retains sole decision-making authority over the areas and decisions that are financially,
reputationally or operationally material to the Group
• Reflects a balance between corporate governance best practice, the Company’s risk appetite and assessment of decision materiality
• Supports the Group’s ability to fulfil its purpose and operate in accordance with its values as set out on page 6
• Matters reserved for the Board presented to the Board and revised version approved in December 2022
• Includes decisions concerning acquisitions, major capital expenditure, the Group’s strategy, budgets, consolidated financial statements
and dividend policy
• Matters reserved schedule can be found at investors.computacenter.com
Computacenter plc Annual Report and Accounts 2022 | 91
Corporate Governance report continued
Measuring Board effectiveness
EXTERNAL EVALUATION OF THE BOARD
In 2022, the Board decided to appoint an external, independent third party to carry out a review
of the Board’s effectiveness, as well as that of its Committees and Directors.
Following a rigorous tender process, and input from the Nomination Committee, the Board
appointed Board Excellence, which has no other connection with the Company or its Directors,
and is committed to complying with the Corporate Governance Institute’s Code of Practice for
Board Reviewers. Given that the last external, independent review took place towards the end of
2019, this was in line with the provisions of the Code, which specify that companies should carry
out an external evaluation at least once every three years.
Areas covered by the process included the Board’s composition; the Board’s understanding of
roles and responsibilities; balance of the Board’s time between strategy, performance and
governance; quality of papers and materials submitted to the Board for consideration; compliance
with the Code; diversity; and how well members work together to achieve individual objectives.
The review was designed to encourage Directors to optimise their contribution to
Computacenter’s success and add value beyond the statutory requirements, by building on
existing strengths, agreeing on the challenges ahead and preparing for the future.
The review included the completion of a detailed questionnaire, following which individual
interviews were conducted with Board members, and Board and Committee meetings were
observed by Board Excellence. The findings were then set out in a detailed report, reviewed first
by the Chair and Company Secretary, before being presented by the lead evaluation partner
from Board Excellence, Paul George, at the following Board meeting. The Board then discussed
the findings in detail and agreed actions for implementation over the following 12 months.
The review concluded that the Board and its Committees continue to perform effectively.
It found that the Board had a good mix of industry and functional skills, reasonable levels of
diversity, and that it benefited from highly engaged members who work well together, have
a willingness to challenge and a strong commitment to the success of Computacenter. It noted
that the Board and its Committees were each well chaired, and that each Director continues to
contribute effectively.
All Directors demonstrated commitment to their roles, and the boardroom culture was deemed
effective and conducive to enabling participation and challenge by Non-Executive Directors.
Following its review, the Board agreed that the following actions would be taken forward:
• The Group has made good progress against its environmental, social and governance (ESG)
objectives. The Board reviews its ESG strategy to ensure that it is consistent with, and
supports, the Company’s revised purpose, and that it encompasses the views and
considerations of those members who have recently joined the Board. The Board agreed that
a stand-alone item wholly dedicated to doing so would be incorporated within the Board’s
annual agenda for 2023.
• While the information provided to the Board in advance of its meetings was generally
professionally presented, papers could lack clarity in their purpose or in respect of the issues
that the author wanted to highlight or receive advice on. It was agreed that the Company
Secretary would continue to work with members of Management to improve the quality and
consistency of information provided.
Approval of external evaluation
July 2022
Board approves external independent
third-party evaluation of its performance
and that of its Committees.
Selection of external provider
October 2022
Tender process completed. Results
presented to Board. Board Excellence
selected as evaluation facilitator.
Evaluation undertaken
November and December 2022
Questionnaires circulated to and
completed by Board members. Follow-up
interviews conducted with Board
members. Observation of Board and
Committee meetings by Board Excellence.
Findings reviewed
January and February 2023
Board reviews evaluation assessment
report.
Board Excellence presentation
February 2023
Board Excellence presents its findings to
the Board. Board member Q&A with lead
facilitator. Board discussion on findings.
Action plan
March 2023
Board agrees actions for completion
following report findings. Directs
Company Secretary to facilitate their
implementation.
92 | Computacenter plc Annual Report and Accounts 2022
Governance Report Our Purpose, Strategy, Culture and Values
Whether we are talking about Our Purpose, strategy, culture or values, our customers are at the heart of everything we do at Computacenter.
We explain below the role that our Governance Framework and the Board play in setting, monitoring, assessing and approving these as part of its
annual agenda, supported by the work of its Committees. The outcome of these activities enabled the Board to confirm that the Group’s purpose,
strategy, culture and values are aligned.
Our Purpose…
HELPING OUR
CUSTOMERS
CHANGE THE
WORLD
Our Strategy…
DELIVERING
AGAINST OUR
STRATEGIC
PRIORITIES
Board oversight activities and related outcomes
The Board reviewed Our Purpose as part of its deep-dive review of the Group’s culture.
It did so considering workforce engagement feedback that (i) those in more junior roles
sometimes struggled to understand how their role aligned with Our Purpose and our
strategy, and (ii) Our Purpose should be inspiring, memorable and easy to talk about with our
stakeholders. It also recognised the importance of having clarity in Our Purpose, and the role
that effective communication of it plays in embedding and maintaining the Group’s desired
culture in a hybrid working environment post-Covid, where our workforce, in many cases,
splits its working hours between office, home and customer locations. The Board directed
Management to consider Computacenter’s Purpose, following which it was later re-presented
and approved. The Company’s updated Purpose is set out on page 7, which is linked to our
ambition, who we are, what we do and our Strategic Priorities.
Our Strategic Priorities are customer focused. They include the retention and maximisation
of our customer relationships, and the building of unrivalled value for our customers by
combining our service and product capabilities. They also reflect that our Managed Services
customers continue to demand innovation that reduces their cost base and enhances their
end users’ experience. Our Strategic Priorities allow us to measure the progress we are
making to meet this demand, including through the use of offshoring and automation. Our
Governance Framework helps ensure the effective setting and execution of our strategy,
reserving this as a matter that only the Board can approve, including the investment
required to deliver related objectives. The Board’s agenda includes reviewing a strategy-
related topic at every scheduled Board meeting, as well as a dedicated strategy day, at
which it comprehensively assesses Computacenter’s competitive positioning within its
markets, its strategic options and three-year plan. The Board’s Committees also provide
guidance and advice on the areas that underpin the pursuit of our Strategic Priorities.
Our Culture and Values…
BRINGING TO LIFE
OUR WINNING
TOGETHER VALUES
IN PURSUIT OF
CUSTOMER SERVICE
EXCELLENCE
Following review by the Board, and to ensure alignment and consistency with our updated
Purpose, Story (page 7) and Strategic Priorities, we moved from six values to four by
consolidating and simplifying their structure, as set out on page 6. These changes will make
them easier for our people to remember and articulate to our stakeholders in the course of
their day-to-day activities, and will underpin consistent behaviours as our people execute
their roles in line with our strategy. Our values require us to put our customers first, to always
keep our promises to them, and to be straightforward in our dealings with them. In addition
to its deep-dive into culture and its monitoring of associated metrics such as attrition and
sustainable engagement scores, reports from the Audit Committee on potential Group Ethics
Policy breaches and associated compliance policies illustrated behaviours inconsistent with
our culture and values, as well as aiding the Board’s assessment of how effectively related
policies and processes have been embedded across the organisation, including by
geography and business function. The speed at which the organisation responds to internal
and external audit findings provided insight to the Board on its attitude to risk and
governance. The Board reviewed the results of our Group-wide employee survey, including
feedback on areas such as culture, innovation, understanding of strategy and enablement.
The Remuneration Committee, on behalf of the Board, reviewed workforce policies and
practices, receiving a presentation from the Group’s Chief People Officer explaining the steps
that the Group had taken to support its people through economically turbulent times in a
number of our core countries, with a focus on pay, wellbeing, diversity and inclusion, and
supporting policies and engagement processes.
Computacenter plc Annual Report and Accounts 2022 | 93
Corporate Governance report continued
BOARD ACTIVITY IN 2022
The Board held eight scheduled meetings during 2022 to cover its annual agenda of activities, through which it provides the Group with leadership
and promotes its long-term sustainable success. Whilst the list of Board activities set out below is not exhaustive, it provides an understanding
of its main areas of focus, the decisions it has made, and the section 172 factors that it considered in its discussions and decision making.
These included the views and interests of our stakeholders, whilst reflecting the Group’s appetite for risk, as set by the Board. This section is
incorporated by reference into the Board’s section 172 statement for 2022, as set out on page 69.
Outcomes or decisions
Stakeholders and section 172
factors considered
Activity or discussion undertaken
Strategy
Held a dedicated strategy day. Reviewed the Group’s
Technology Sourcing, Managed Services and Professional
Services propositions; competitive positioning and
differentiation; assessed Management’s recommendations
relating to growth potential and opportunities, and future
strategic investment requirements. Further information on the
Group’s strategy is available from pages 14 to 23.
Conducted seven strategy related deep-dives across the year
on topics of material importance to achieving progress against
the Group’s strategic priorities.
Ongoing assessment of the Group’s balanced business
portfolio (as set out on pages 14 to 17), its continued relevance
and areas of competitive advantage.
Reviewed acquisition opportunities, including specific
discussion and debate as to whether those opportunities were
aligned with the Group’s strategy, including customer target
market, geographic location and synergies available
post-acquisition.
Received regular updates on the status of our environmental,
social and governance (ESG) strategy, and progress made
against our ‘Winning Together for our People and Planet’
objectives. Further information on the Group’s areas of ESG
focus can found on pages 38 to 53.
Reviewed the Group’s financing, cash deposit and cash
reserve strategy.
Our people and culture
Conducted a deep dive into Computacenter’s culture, including
discussing its development over recent years, its alignment
with our Winning Together Values, strategy, and purpose, and
how it could be most effectively embedded and maintained in a
post-Covid working environment.
Reviewed succession planning for members of the Board and
Group Executive Committee, the process for talent
management throughout Computacenter, and remuneration in
the context of current macroeconomic conditions across our
operating countries.
Approved the Group’s strategy and related three-year plan for
2023-2025.
Within the full year 2022 and full year 2023 financial budgets,
approved continued investment in: the Group’s IT systems and
capabilities; the Group’s cyber security capabilities; and in our
warehouse facilities in Kerpen, Germany, amongst others.
Approved the acquisition of Business IT Source in the second
quarter of 2022. Rejected other opportunities at an early stage.
Balanced differing stakeholder priorities around the Group’s use
of cash such as preference for organic growth, existing Group
investment requirements and quantum of shareholder returns
through dividends or share buyback programmes.
Reaffirmed the Group’s target of being Net Zero for Scope 1, 2 and
3 carbon emissions by 2040. Considered against related financial
costs for stakeholders, including cost of ESG-related investment.
Through the Remuneration Committee reviewed how ESG could
be further incorporated into the Company’s Executive
remuneration framework.
Approved entry into a revolving credit facility in the fourth
quarter following expiry of the Group’s existing RCF agreement,
and also approved the Group’s tax and treasury policies. Decided
to retain the Group’s existing Treasury Shares for future use.
Directed Management to review Our Purpose and present it to
the Board later in the year, to ensure its continued relevance in
maintaining the Group’s desired culture. Approved the revised
version of Our Purpose and of the Group’s Winning Together
Values as set out on pages 6 to 7.
Approved the appointments of Christian Jehle as Chief Financial
Officer (with effect from June 2023), and of René Carayol as a
Non-Executive Director of the Board. Reapproved existing talent
management processes. Recommended to shareholders a
revised Directors’ Remuneration Policy (which was largely
unchanged from the existing version) and approved an
unscheduled one per cent salary increase to mitigate against
the impact of inflation across our core countries, and the cost
of living crisis in the UK.
Reviewed Non-Executive Director remuneration, considering
the limits set in the Company’s Articles of Association, and
relevant benchmarking data.
Approved an increase of 4.8 per cent for all Non-Executive
Director, Board and Committee roles in 2023 (with no individual
being involved in decisions relating to their own remuneration).
Received regular updates from the Group’s designated
Non-Executive Director for Workforce Engagement, highlighting
matters of concern and importance to employees.
Helped to inform the Board of employee views of its decision
making in areas such as strategy, diversity, culture, ESG and
working arrangements post-Covid. Commentary on the
outcomes of our engagement with our people can be found
on page 71. Approved the Workforce Engagement Schedule
for 2023.
94 | Computacenter plc Annual Report and Accounts 2022
B
C
D
B
C
D
B
C
D
A
LT
A
LT
A
LT
A
B
C
D
E
LT
ENV
HS
SP
C
D
E
B
LT
A
LT
B
LT
B
LT
B
LT
C
B
HS
C
HS
C
HS
HS
Governance Report Activity or discussion undertaken
Financial and operational performance
Received regular reports from the Chief Executive Officer.
Considered business performance against Board and market
expectations, material issues impacting our key stakeholders,
and progress against the Group’s Strategic Priorities and key
performance indicators. For further detail on the Group’s
performance during 2022, please see pages 24 to 37.
Specifically reviewed the impact of inflation on the business,
including on employee costs, services margins, and of supply
chain-related customer purchasing behaviours on the levels
of inventory held by the Group.
Reviewed senior management presentations from each
of the in-country and Group function leadership teams,
including Q&A dinner events with the Group’s German and
UK leadership teams.
Considered the budget and performance-related targets for
2023 and approved the 2022 interim and 2021 final dividends.
For our 2022 final dividend and details of our dividend policy,
please see page 64. Reviewed feedback from analysts and
shareholders following the release of the half-year and
full-year results.
Governance, compliance and risk management
Reviewed and discussed regulatory and compliance matters
with the Legal & Compliance Director, the Company Secretary
and the Chief People Officer, both at Board and Audit
Committee meetings.
Through the Nomination Committee, instructed the completion
of a full, independent, externally facilitated Board evaluation,
conducted by Board Excellence.
Periodically reviewed corporate governance matters including
Directors’ conflict of interest, the Board Matters Reserved and
Delegated Authorities document and the terms of reference for
the Board’s Committees.
Outcomes or decisions
Stakeholders and section 172
factors considered
Approved the Group’s half-year and full-year results
announcements, as well as the first and third quarter trading
updates. Approved the Group’s Viability Statement and Going
Concern Statement as set out on page 67. Approved the Group’s
Annual Report and Accounts.
A
LT
B
C
D
HS
SP
Provided the Board with insight into financial performance,
customer trends and behaviour, and the outcomes of in-country
stakeholder engagement.
The Board recommended a final dividend for 2021 of 49.4 pence
per share, which was subsequently approved by shareholders at
the Company’s 2022 Annual General Meeting and declared an
interim dividend for 2022 of 22.1 pence per share. Approved the
financial budget for 2023. Balanced competing stakeholder
interests relating to balance sheet strength, shareholder returns
and investment requirements.
Approved updated Group Disclosure Policy and Group Rules on
Share Dealing, as well as the Group’s Modern Slavery Statement
and Gender Pay Gap Reporting. Reviewed ‘Speak Up’ reports as
part of updates from the Audit Committee Chair.
Reviewed the report findings and outcomes and agreed future
areas of focus. The evaluation process and its findings and
outcomes can be found on page 92. Concluded that throughout
the year, the Board, its Committees and individual Directors
continued to operate effectively.
Approved revised Matters Reserved for the Board document,
and Audit Committee Terms of Reference, which can be found
at investors.computacenter.com. Recommended to shareholders
the appointment of Grant Thornton as the Group’s new external
auditor.
A
LT
C
LT
B
HS
C
LT
B
LT
B
C
D
AF
C
HS
C
HS
Considered the Group’s principal and emerging risks, and
considered the effectiveness of the risk and internal
control system.
Approved additional principal risks relating to macroeconomic
factors including inflation, interest rate increases and potential
recession, and also supply chain shortages as set out on pages
78 and 80.
A
B
C
LT
ENV
HS
E
D
SP
Key to stakeholders and section 172 factors considered
Our key stakeholders
Other section 172 factors
A
B
C
Customers
People
Shareholders
D Technology vendors
E
Community
LT
ENV
HS
AF
SP
Long-term consequences of decision making
Considering the environment
Maintaining a reputation for high standards of business conduct
Acting fairly between members of the Company
Suppliers (excluding our technology vendors)
Computacenter plc Annual Report and Accounts 2022 | 95
Corporate Governance report continued
Risks, opportunities and resources
The strategic report, from the inside front
cover to page 81, explains how the Group
generates and preserves value over the long
term, describes how opportunities and risks
to the future success of the business have
been considered and addressed, and sets out
our sustainable business model. Through its
annual agenda, the Board’s principal
consideration of opportunities for business
growth, and associated investment, take
place at its dedicated strategy day, and
through its review of matters related to the
achievement of our strategic priorities at
every scheduled Board meeting. Through its
review of these opportunities, and its
approval of the business plans and budgets
submitted by the Executive Directors,
including the assumptions underlying them,
the Board ensures that adequate resources
are available to meet related objectives.
In 2022, principal investments approved
included in the Group’s cyber security
capabilities and the Group’s IT systems.
Further detail of investments approved and
made during the year can be found on page
21. The Board reviews the performance of the
Executive Directors and the Group Executive
Committee against targets related to agreed
objectives, including a monthly review of
the financial performance of each of the
Group’s Segments.
DIVISION OF RESPONSIBILITIES
Stakeholder engagement
Details of the Group’s engagement with its key
stakeholders, including our customers,
employees, technology vendors, communities
and shareholders, and how its outcomes were
considered by the Board in its discussions and
decision making, are set out on pages 70 to 73
and pages 94 to 95. Further detail on how we
invest in and reward our workforce can be
found in the Strategic Report on pages 42 to
45 and in the Directors’ Remuneration report
on pages 110 to 133.
Workforce policies and practices
The Remuneration Committee has a dedicated
agenda item which reviews, on behalf of the
Board, the Group’s workforce policies and
practices to ensure that these are aligned to
and consistent with the Group’s values and
support its long-term success. In 2022, the
Committee received a presentation from the
Chief People Officer, and reviewed metrics,
initiatives and policies relating to pay,
wellbeing, and diversity and inclusion, as well
as reviewing the actions taken by the Group
during the year to help our people through
economically turbulent times. During this
time, they have been significantly impacted
by inflation across some of our core
countries. The Committee was satisfied that
the Group’s philosophy of pay for
performance, as well as the Group’s
workforce policies and practices, are
consistent with, and support, the Group’s
Winning Together Values – confirming they
reflect our belief that people matter, and
consider the long term, playing an important
role in helping to build a stable and efficient
business. The Board and Remuneration
Committee also considered items related to
the Group’s Modern Slavery Act reporting,
Gender Pay Gap reporting and the CEO’s pay
ratio. Our workforce can raise any matters of
concern through an independent, third-party,
anonymous reporting helpline, run by Safecall.
Through updates from the Audit Committee,
the Board reviews this and the reports arising
from its operation. There are also Management
structures in place throughout Computacenter
to ensure that individuals can report any
concerns to their line manager should they
wish to do so. All Directors are subject to the
Group’s Ethics Policy. The terms of their
appointment letters, as well as their duties
to the Company, commit them to act with
integrity. The Company has implemented
specific policies and processes to help them
adhere to requirements around share dealing,
external interests and conflicts of interest,
amongst others.
Role of the Chair includes:
• Leadership of the Board, ensuring its effectiveness on all aspects
of its role and setting its agenda
• Chairing Board and general meetings, and those of the
Nomination Committee
Role of the Chief Executive Officer includes:
• Developing the Group’s strategy for approval by the Board,
and ensuring the execution of that strategy by Management
• Providing leadership to the senior Management team in the
day-to-day running of the Group’s business
• Promoting a culture of openness and debate and ensuring the
• Ensuring that appropriate internal controls are in place
effective engagement of all Board members
throughout the Group
• Demonstrating objective judgement
• Ensuring that the performance of the Board, its Committees and
individual Directors is evaluated annually
• Ensuring that the Directors receive accurate, timely and
clear information
• Facilitating constructive Board relations and the effective
contribution of all Non-Executive Directors
• Setting the ‘tone from the top’ by establishing the Group’s guiding
values, for approval by the Board
• Providing a means for timely and accurate disclosure of
information to the Board, including effective escalation of issues
where required
• Ensuring effective communication with shareholders
Role of the Senior Independent Director includes:
• Providing a sounding board for the Chair and serving as a trusted
Role of the Non-Executive Director includes:
• Providing an external perspective, constructively challenging the
intermediary for other Directors, when necessary
Executive Directors and senior management
• Meeting with the Non-Executive Directors at least once a year to
• Monitoring and scrutinising the Group’s performance against
apprise the Chair’s performance
agreed goals and objectives, and holding Management to account
• Providing support for the Chair in the delivery of their objectives
• Ensuring that the Chair pays sufficient attention to
succession planning
• Being appointed as members of the Board’s Committees
• Offering strategic guidance and specialist advice
• Playing a prime role in appointing and removing the
• Ensuring that the views of the other Directors are conveyed
Executive Directors
to the Chair
• Being available to shareholders, if they have concerns, if the
normal channels of Chair, Chief Executive Officer or other
Executive Director has failed to resolve issues
96 | Computacenter plc Annual Report and Accounts 2022
Governance Report Board composition and independence
The membership of the Board as at
31 December 2022 is set out on pages 86 and
87. On that date, the Board included seven
Non-Executive Directors and two Executive
Directors. The diversity and experience of the
Board enables it to discharge its functions
effectively. There were two changes to the
Board during the year. On 1 December 2022,
Rene Haas stepped down as a member of the
Board and its Committees. René Carayol
joined the Board as a Non-Executive Director
on 1 November 2022. He is a member of each
of the Board’s Committees.
The Board has considered the independence
of each Director, taking into account the
guidance provided by the Code. The Board
considered that the Chair, Peter Ryan, met the
Code’s independence criteria on appointment,
and considers that Pauline Campbell, Ros
Rivaz, Ljiljana Mitic and René Carayol are
independent in their character and
judgement. Philip Hulme and Peter Ogden,
the Founder Non-Executive Directors, are not
considered to be independent, having started
the Company in 1981 and remained on the
Board in either an Executive or Non-Executive
capacity since that time. Our Corporate
Governance Framework, as set out on page 85,
and the balance of our Board’s Executive,
Non-Executive and independent Non-
Executive Directors ensures that there is no
dominant individual or group of individuals
on the Board influencing its decision making.
Only independent Non-Executive Directors
and the Chair are members of the Board’s
Committees. The Board is comfortable that
each Director makes a valuable contribution
in their role.
Board appointments and development
The Nomination Committee leads the process
for Board appointments. Further detail on the
Committee’s role, membership and work
during the year is set out on pages 98 to 99.
Non-Executive Directors are appointed to the
Board for an initial three-year term, the
renewal of which is timed to be at the close of
an Annual General Meeting. The Executive
Directors are appointed for a rolling 12-month
term. The terms and conditions of appointment
of all Directors are available for inspection at
the Company’s registered office and at each
AGM. The Company’s Articles of Association
require a Director to be subject to election at
the first AGM following his or her appointment
and every third year thereafter. However, in
accordance with the Code, the Board has
decided that all Directors should be subject
to election or re-election at the Company’s
2023 AGM, and each AGM thereafter. If the
shareholders do not elect or re-elect a Director,
or a Director is retired from office under the
Articles, the appointment terminates
immediately and without compensation.
The Chair liaises regularly with each Director
to discuss and agree their training and
development needs, and periodically to
discuss their ongoing contribution to Board
meetings and their interactions with other
Directors both in and outside of meetings,
providing and receiving feedback where
relevant. The Board is confident that all of its
members have the knowledge, ability and
experience to perform the functions required
of a Director of a listed company. As set out
on page 96, the roles of the Chair and Chief
Executive Officer are separate, and their
responsibilities are clearly set out in writing,
reviewed annually and agreed by the Board.
They are available from the Company’s
website at investors.computacenter.com.
Insurance and indemnities
The Company arranges insurance cover in
respect of legal action against the Directors
and, to the extent allowed by legislation, has
issued an indemnity to each Director against
claims brought by third parties.
Conflict of interest procedure
The Company’s Articles of Association allow
the Board to review and authorise situations
where a Director has an interest that
conflicts, or may conflict, with those of
Computacenter, and to impose conditions on
that authorisation. The Board has formal
procedures to appropriately manage any
actual or potential conflicts of interest
identified. These include considering each
conflict from a competitive and commercial
perspective, which incorporates identifying
supplier or customer relationships between
Computacenter and any third party, and also
identifying if there are any areas where a third
party connected with a Director competes
with Computacenter. The Board also
considers the conflict in accordance with the
requirements of the Companies Act 2006.
External appointments and time commitment
The Non-Executive Directors’ letters of
appointment set out the expected time
commitment required to execute their duties.
Although the nature of the roles makes it
difficult to be specific about the maximum
time commitment, a commitment of up to
two days per month is expected, including
attendance at and preparations for regular
Board meetings. In certain circumstances,
for instance when the Company is engaged in
acquisitions, restructuring or other corporate
transactions, there may be additional Board
meetings, and Non-Executive Directors are
expected to attend these where possible. Each
Director’s external commitments are monitored
on an ongoing basis to ensure that they have
sufficient time to devote to their role at
Computacenter. Following the external Board
evaluation completed for 2022, the Board is
satisfied that each Director is able to allocate
sufficient time to the Company to discharge his
or her responsibilities effectively, and that no
external appointments of our Board Directors
have any impact on their independence or
responsibilities to the Company.
Provided the time commitment does not
conflict with the Directors’ duties to the
Company, the Board may authorise the
Executive Directors to take non-executive
positions in other companies and
organisations, as this helps to broaden their
experience. The Board would not agree to a
full-time Executive Director taking on more
than one non-executive directorship of a FTSE
100 company or the Chairship of such a
company. No such positions have been taken
by the Executive Directors.
Information and support
The Chair, with assistance from the Company
Secretary and through discussion with the
Executive Directors, approves the agenda for
each Board meeting, as well as the time
allocated for each agenda item. This ensures
that the areas of focus for the Board, and the
balance of time related to reviewing strategy,
performance and governance, enable it to
operate effectively and efficiently. To enable
the Directors to discharge their duties, they
receive accurate, timely and clear information
at least a week in advance of each scheduled
Board and Committee meeting, including
detailed briefings on all matters. Directors
can obtain independent professional advice,
at the Company’s expense, where they believe
it is necessary to discharge their responsibilities.
There are in place appropriate policies and
processes to support the work of the Board.
The Company Secretary ensures that the
Board’s Committees are provided with
sufficient resources to undertake their duties.
Where Directors have concerns which cannot
be resolved, whether about the running of the
Company or a proposed action, their concerns
will be recorded in the Board’s minutes. On
resignation, a Non-Executive Director would
be required to provide a written statement to
the Chair, for circulation to the Board, if they
had any such concerns. The Company
Secretary advises the Board on all corporate
governance matters and advises the Chair to
ensure that all Board procedures are correctly
followed. All Directors have access to the
advice and services of the Company Secretary.
Board induction
Upon joining the Board, all Directors receive
a comprehensive induction programme
organised by the Company Secretary, tailored
to their specific background and requirements.
New Directors receive an induction pack which
contains information on the Group’s business,
its structure and operations, Board procedures,
corporate governance matters and details of
Directors’ duties and responsibilities. All new
Directors are introduced to the Group’s
Executive Management team. New Directors
are also given the opportunity to meet with
major shareholders.
Computacenter plc Annual Report and Accounts 2022 | 97
Nomination Committee report
The Board and the
Committee recognise the
benefits that diverse skills,
experience and thought
can bring to an organisation,
and how it can assist the
Board’s range of views,
decision making and
effectiveness.
Peter Ryan
Chair of the Nomination Committee
Current members
1. Peter Ryan (Chair)
2. Pauline Campbell
3. René Carayol (from 1 November 2022)
4. Ljiljana Mitic
5. Ros Rivaz
Former member
6. Rene Haas (until 1 December 2022)
Role
Non-Executive Chair
of the Board
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Attendance
record
3/3
3/3
–
3/3
3/3
1/3
Membership and attendance
The members of the Nomination Committee
are the independent Non-Executive Directors
and the Chair of the Board.
Rene Haas stepped down from the Committee
and the Board on 1 December 2022. René
Carayol joined the Committee on 1 November
2022, immediately upon his appointment as
a Non-Executive Director. With much of his
recent work and expertise focusing
particularly on areas such as diversity and
inclusion, inclusive leadership and cultural
transformation across large organisations,
René will provide valuable insight to the
Committee moving forward.
The Company Secretary is the secretary to the
Committee, and upon invitation, the meetings
are also attended by the Chief Executive
Officer and the Chief People Officer. The Chair
of the Committee reports to the Board on
its activities.
Responsibilities of the Nomination
Committee
The key responsibilities of the Nomination
Committee are to:
• lead the process for Board appointments;
• ensure that the Board and its Committees
have a combination of skills, experience,
diversity, knowledge and independence
appropriate for leading the Group, given its
size and the markets in which it operates;
• review the structure and size of the Board
and its Committees to ensure that they are
able to function effectively; and
• review succession planning for the Board
and senior executives of the Group
(including ensuring the development of
a diverse pipeline for succession).
The Committee’s full terms of reference are
available at investors.computacenter.com.
No changes have been made to its terms of
reference since the Committee’s last report
to shareholders.
COMPOSITION AND SUCCESSION
Main activities of the Committee in 2022
The Nomination Committee met three times
during 2022, and its work included:
Re-appointment of Directors
All Directors put forward for election or
re-election at the Company’s AGM are
nominated by the Board on the
recommendation of the Committee. In
considering whether to recommend the
nomination of a Director, the Committee took
into account the outcome of the externally
facilitated evaluation of the Board, its
Committees and Directors, in 2022. Following
the Committee’s assessment in early 2023,
all Directors in office as at 31 December 2022
will be put forward for election or re-election
at the AGM in May 2023.
Succession planning and Board changes
The Committee continued to focus on its
responsibility under the 2018 UK Corporate
Governance Code (the Code) to ensure that
plans are in place for Board and senior
Management succession, and to oversee
the development of a diverse pipeline for
succession. The Committee discussed
succession planning for the Executive Director
positions which is a significant priority for
both our shareholders, who have raised the
issue consistently in recent years during the
Company’s engagement with them, and also
the Board, given the incumbents’ deep
knowledge of the Group and its business,
and their length of tenure in role. Given that
inadequate succession planning, including
for the Executive Directors and the Group
Executive Committee, is one of our principal
risks, this was also reviewed by the Board,
in consultation with the Committee, following
a presentation by the Chief Executive Officer
and Chief People Officer in the second half of
the year. It considered the criticality of each
role to the long-term sustainable success of
the Group, and the relative availability of
internal and external candidates for the roles
over various time horizons.
To help it understand succession planning
requirements, and to ensure that the Board
and its Committees are able to function
98 | Computacenter plc Annual Report and Accounts 2022
Governance Report effectively on an ongoing basis, the Committee
reviewed and discussed the composition of the
Board and its Committees, and the skills,
diversity and knowledge that each individual
Director brings. It considered how the
leadership needs of the Group may change over
time, influenced by factors including its
strategy, plans for growth and likely future
corporate governance requirements.
The Committee recognises the particular
importance of effective Non-Executive
Director succession planning, especially given
that the Board includes our two founder
Non-Executive Directors, who continue to
contribute significantly and appropriately to
Board discussions, particularly around
strategy and performance. The Board does
not consider Sir Philip Hulme and Sir Peter
Ogden to be independent for the purposes of
the Code. It is therefore important that the
Committee is prepared for unexpected or
emergency independent Non-Executive
Director succession so that the Company is
able to remain in compliance with provision 11
of the Code, which requires at least half of the
Directors, excluding the Chair, to be
considered independent by the Board.
There is a formal, rigorous and transparent
procedure for the appointment of new
Directors to the Board. It is led by the
Committee and is triggered by the
identification of a skills gap on the Board and
its Committees. This is usually, but not always,
the result of a Board resignation, changes in
the Company’s activities or strategic focus, or
updated corporate governance requirements
concerning Board or Committee composition.
The appointment process for a Board role
generally starts with the appointment of an
independent search firm by the Committee,
and the creation of a role specification which
it then approves. Following further Committee
discussion, it then inputs into a shortlist of
candidates, and is involved in the interview
process for all appointments. Generally,
candidates are subsequently interviewed by
the remaining members of the Board. After
taking feedback from these, the Committee
recommends the appointment of a candidate
to the Board for discussion and approval.
The process varies slightly for Executive
Director roles, given that the Committee will,
as was the case in 2022, consider internal
candidates. Only external candidates will be
considered for Non-Executive roles.
Given the nature of the role, the process for
the appointment of the CFO-designate was
led by a sub-committee of the Nomination
Committee, which included the Chair, the
Senior Independent Director and the Chair of
the Audit Committee. The resulting shortlist
of four diverse candidates met with the
sub-committee, as well as the Chief Executive
Officer. The sub-committee also discussed in
some depth the feedback on the candidates
following a review process conducted by
Russell Reynolds, which was the search firm
used by the Company to assist with the
process. Russell Reynolds has no other
connections with the Company or its Directors,
other than the provision of this type of service.
The sub-committee then reported back to the
Nomination Committee, which recommended
the appointment of Christian Jehle as
CFO-designate late in the year (prior to joining
the Company as CFO on 1 June 2023).
Christian’s career to date has been
characterised by leading transformations of
finance functions to ensure that they are best
in class and fit for purpose for continually
expanding and changing businesses. The
Committee, working closely with the CEO and
the Board, considered the skills and
experience he has developed in this area to be
important in fulfilling a Board priority that the
Group’s finance function remains in a position
to best support and enable the continued
growth of the business, including through the
use of technology that simplifies the business,
and continues to drive efficiencies including
within finance and administration.
Our Non-Executive Director appointment
process may also vary where an individual has
been specifically identified by the Board and
Committee as part of its ongoing succession
planning, having matched their skills and
experience to those required by the Board. In
this event, that individual may, following Board
approval on the recommendation of the
Committee, be approached directly without
the use of a search firm or open advertising
for the role.
This was the case for the appointment of René
Carayol, who was approached directly by the
Company, given his previous experience as an
IT systems director (with PepsiCo) and Chief
Information Officer (with IPC Magazines), and
his recent work and expertise in areas
highlighted earlier in this report. Having
indicated his willingness to put himself
forward for consideration, René then went
through our standard Non-Executive Director
appointment process, including being
interviewed by other members of the Board.
Following feedback and discussion, the
Committee agreed to recommend his
appointment to the Board. The Board approved
the recommendation, following which René
joined the Company.
Diversity
The Board recognises the benefits that diverse
skills, experience and thought can bring to an
organisation. The Committee always considers
these benefits when reviewing Board
succession planning, and during the
appointment process. This includes requiring
diverse lists of potential candidates to be
presented to it for review or selection. The
Board is also of the view that appointments
to it must be made primarily on skills and
experience, with regard to the benefits of
diversity. As such, the Committee does not
view it as appropriate to have in place a formal
diversity policy which applies specifically to
the Board and Executive Committee.
The Committee factors into its discussions
related corporate governance requirements
and suggested best practice in this area,
including the Sir John Parker review on ethnic
diversity and the Hampton-Alexander review
on gender diversity. During the year, the
Committee also received an update on the new
UK FCA Listing Rule relating to diversity. It will
continue to be mindful of these requirements
and best practice guidance as it undertakes
its review of Board succession for the medium
term during 2023.
The Board and the Committee endorse
Computacenter’s wider approach to diversity,
including its six pillars of diversity, as set out in
more detail on page 44, and its Equality and
Respect at Work policy, which applies
throughout the organisation, including to the
Board, its Committees and Group Executive
Committee. This is in place to ensure that
everybody who represents Computacenter
promotes equality, diversity and inclusion in
the way that they behave, their communications
and their day-to-day actions. As set out on
pages 124 and 125, at the end of 2022, we were
on track to meet our corporate objective of a
25 per cent female mix for our leadership job
levels across the Group, and a 30 per cent mix
for our whole employee base. We are clear that
a failure to recruit and retain the right calibre
of talent is a risk to the successful execution
of our strategy, and our key mitigation actions
include the implementation of specific
diversity projects and initiatives relating to
gender and ethnicity, amongst other areas.
Further detail on these can be found on pages
43 to 45.
Female representation at Board level
remained at 33.3 per cent in 2022; at Group
Executive Committee level it increased from
20 per cent to 22 per cent, and in our leadership
teams it increased from 23 per cent to 29 per
cent. Our leadership teams are comprised of
members of the Executive Committee and
those senior leaders who are direct reports to
Executive Committee members (excluding
administration and support roles). As regards
ethnicity, as at 31 December 2022 one Director
identified as an ethnicity other than white.
Further detail on the Group’s approach to
diversity and inclusion, as well as the gender
balance of our workforce, can be found on
page 44.
Committee performance
The performance of the Committee was
reviewed as part of the independent, external
evaluation of the Board completed in the fourth
quarter of the year. I am satisfied, having
reviewed the findings of that evaluation, and
discussed it with the other members of the
Board, that the Committee continued to
function effectively during the year.
Peter Ryan
Chair of the Nomination Committee
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 99
Risk and internal control
Risk management
The Board is responsible for establishing a
framework of prudent and effective controls,
which enable the Company’s risks to be
assessed and managed. The Board has
carried out a robust assessment of the
principal and emerging risks facing the Group,
including those that threaten its business
model, future performance, solvency or
liquidity. Please refer to pages 74 to 81 for
further information on the Group’s principal
risks and uncertainties, what procedures are
in place to identify emerging risks, and how
these are being managed and mitigated.
Executive and senior Management have
primary responsibility for identifying and
managing the risks the Group faces.
A comprehensive risk management
programme has been developed and is
monitored by the Group Risk Committee,
which is chaired by the Group Legal &
Compliance Director and whose members
include the Group Head of Internal Audit and
Risk and senior operational managers from
across the Group. Throughout the year each
meeting has been attended by at least one
independent Non-Executive Director as
a guest of the Chair of the Committee.
The Board sets the Group’s risk appetite and,
through the Audit Committee, reviews the
operation and effectiveness of the Group’s
risk management activities. The Board
periodically reviews the Group’s strategic
risks and its key mitigation plans and, through
the Audit Committee, receives regular reports
from the Group Risk Committee. As a sales-led
and customer-focused organisation, effective
risk management processes are vital to the
Group’s continued success. Therefore, the
Board continues to apply a robust risk
management and governance model to
provide assurance over the principal risks
that might affect the achievement of the
Group’s strategic priorities. These strategic
priorities are focused on improving the
Services business and maintaining the
longevity of the Group’s customer
relationships, which in turn rely heavily on the
contribution made by the Group’s customer-
facing employees and those involved in
Services innovation and design.
The Group’s risk management approach
recognises this, ensuring that risks are
identified and mitigated at the appropriate
level, leaving individuals empowered to
make their vital contributions. The Group’s
model uses the well-defined three lines of
defence methodology:
• The first line of defence consists of
operational management, which owns
the risks and apply the internal controls
necessary for managing risks day-to-day.
• The second line of defence comprises
functions such as internal compliance
and assurance, which offer guidance,
direction, oversight and challenge at the
appropriate level.
• The third line of defence, provided by Group
Internal Audit, gives an independent view of
the effectiveness of the risk management
and internal control processes. It reports to
the Audit Committee to ensure independence
from Management.
The Board reviews the operational
effectiveness of the risk management model
by directing the reinforcement of the
processes that underpin it and by making
sure it is embedded across all levels of the
organisation. For example:
• The Schedule of Matters Reserved for the
Board ensures that the Directors properly
address all significant factors affecting
Group strategy, structure, financing
and contracts.
• The Board and Executive Committee
consider the principal risks, which are
the barriers to achieving the Board’s
Strategic Priorities.
• The Group Risk Committee challenges
the effectiveness of the principal
risk mitigations.
• The Group Risk Committee considers each
principal risk in-depth at least once a year,
by receiving reports from the risk owner.
• The Group Risk Committee’s deliberations,
along with the current status of each
principal risk, are reported to the Audit
Committee and the Board.
• The principal risk list is reviewed once
a year and leverages a bottom-up
annual operational risk review, where
operational management identifies their
everyday risks.
• The Group Compliance Steering Committee
assesses observance of laws and
regulations, and reports to the Group
Risk Committee.
• The bid governance process reviews bids or
major changes to existing contracts, and
aligns with the Group’s risk appetite and
risk management process.
The model and process comply fully with
the UK Corporate Governance Code and the
Financial Reporting Council’s Guidance on risk
management, internal control and related
financial and business reporting. Recent
enhancements to the risk framework
and processes, have now been embedded
and include:
• Risk owners report to the quarterly
meetings of the Group Risk Committee,
ensuring that they consider risk
appetite, non-financial risks and potential
risk triggers.
• While all principal risks are reviewed at
least annually by the Group Risk Committee,
higher-level risks are considered more
frequently. Contract risks, cyber risk and
data privacy are reviewed bi-annually while
acquisition integration risk is considered at
each meeting.
100 | Computacenter plc Annual Report and Accounts 2022
• The Compliance Steering Committee, which
reports to the Group Risk Committee, has
completed the rollout of a Compliance
Management System to assess risk and
compliance more thoroughly.
The Group has detailed business interruption
contingency plans for all key sites. These are
regularly tested, in accordance with an
agreed schedule.
Internal control
The Board has overall responsibility for
maintaining and reviewing the Group’s
systems of internal control, and ensuring that
the controls are robust and enable risks to be
appropriately assessed and managed. The
Group’s systems and controls are designed to
manage risks, safeguard the Group’s assets
and ensure information used in the business
and for publication is reliable. This system of
control is designed to reduce the risk of failure
to achieve business objectives to a level
consistent with the Board’s risk appetite,
rather than eliminate that risk, and can
provide reasonable, but not absolute,
assurance against material misstatement
or loss.
Throughout the year, the Board receives
reports which enable it to consider the Group’s
significant risks, how they are identified,
evaluated and managed, and the effectiveness
of the system of internal control in managing
those significant risks. The Board also carries
out an annual review of the effectiveness
of the internal control and risk management
systems, covering all material controls,
including financial, operational and
compliance controls.
This formal process consists of a
presentation to the Audit Committee by
Management which provides the detailed
evidence necessary to support its
recommendation to the Board on the
effectiveness of the systems of risk
management and internal control. The
evidence from which the Board draws it
conclusions includes reports and other
relevant information received, the results
of an annual risk and internal controls
questionnaire completed by senior
management and how any significant control
weaknesses are followed-up and mitigated.
In the Board’s opinion, the Group has complied
with the Code’s internal control requirements
throughout the year. All systems of internal
control are designed to identify continuously,
evaluate and manage significant risks faced
by the Group.
Governance Report Compliance policies
The Group has a number of compliance
policies, including those relating to the
General Data Protection Regulation, Business
Ethics and Anti-Bribery and Corruption.
Any breach of these policies by an employee
is a disciplinary matter and is dealt with
accordingly. The internal control regime is
supported by a whistleblowing function,
which is operated by an independent
third party.
Audit Committee and the auditor
For further information on the Company’s
compliance with the Code’s provisions relating
to the Audit Committee, Group auditor and
Internal Audit, please refer to the Audit
Committee report on pages 102 to 109.
The Corporate Governance Report, from
pages 83-133, was approved, by order of the
Board, and signed on its behalf by:
Simon Pereira
Company Secretary
6 April 2023
The key elements of the Group’s controls are
detailed below.
Responsibilities and authority structure
As discussed above, the Board has overall
responsibility for making strategic decisions.
There is a written schedule of matters
reserved for the Board.
The Group Executive Committee meets
formally on a quarterly basis and, more
informally, on a fortnightly basis, to discuss
day-to-day operational matters. With the
Group Operating Model in place across all of
the Group’s main operating entities, ultimate
authority and responsibility for operational
governance sits at Group level. The Group
operates defined authorisation and approval
processes throughout its operations. Access
controls continue to improve, where
processes have been automated to secure
data. The Group has developed management
information systems to identify risks and
enable the effectiveness of the systems of
internal control to be assessed. Linking
employee incentives to customer satisfaction
and profitability reinforces accountability
and encourages further scrutiny of costs
and revenues.
Proposals for capital expenditure are
reviewed and authorised, based on the
Group’s procedures and documented
authority levels. The cases for all investment
projects are reviewed and approved at
divisional level. Major investment projects are
subject to Board approval, and Board input
and approval is required for all merger and
acquisition proposals.
Planning and reporting processes
Each year, senior Management prepares or
updates the three-year strategic plan, which
the Board then reviews. The comprehensive
annual budgeting process is subject to Board
approval. Performance is monitored through
a rigorous and detailed financial and
management reporting system, through
which monthly results are reviewed against
budgets, agreed targets and, where
appropriate, data for past periods. The results
and explanations for variances are regularly
reported to the Board and appropriate action
is taken where variances arise. Management
and specialists within the Finance
Department are responsible for ensuring that
the Group maintains appropriate financial
records and processes. This ensures that
financial information is relevant and reliable,
meets applicable laws and regulations, and
is distributed internally and externally in a
timely manner. Management reviews the
Consolidated Financial Statements, to ensure
that the Group’s financial position and results
are appropriately reflected. The Audit
Committee reviews all financial information
that the Group publishes.
Centralised treasury function
The Board has established and regularly
reviews key treasury policies, which cover
matters such as counterparty exposure,
borrowing arrangements and foreign
exchange exposure management. The Group
Treasury function manages liquidity and
borrowing facilities for customer-specific
requirements, ongoing capital expenditure
and working capital. The Group Treasury
function reports to the Group Finance
Director, with regular reporting to the
Audit Committee.
The Group Treasury Committee enhances
Management oversight. It is chaired by the
Group Finance Director and also comprises
the Group Financial Controller, the Group Head
of External Reporting and the Group Head of
Tax and Treasury. It is responsible for the
ongoing review of treasury policy and
strategy, and for recommending any policy
changes for Board approval. The Committee
approves, on an ad hoc basis, any treasury
activities which are not covered by existing
policies or which are Matters Reserved for the
Board, and also monitors hedging activities
for effectiveness.
Computacenter plc Annual Report and Accounts 2022 | 101
Audit Committee report
On behalf of the Board, the
Committee is responsible
for overseeing the
effectiveness of the
Group’s systems of internal
control and the risk
management framework.
Pauline Campbell
Chair of the Audit Committee
Current members
1. Pauline Campbell
2. René Carayol (member from 1 November 2022)
3. Ljiljana Mitic
4. Ros Rivaz
Former member
5. Rene Haas (member until 1 December 2022)
Role
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Attendance
record
6/6
2/2
6/6
6/6
Non-Executive Director
2/4
Dear Shareholder,
I am pleased to deliver our Audit Committee
report for the year ended 31 December 2022. In
the report below we explain how the Committee
has discharged its responsibilities during the
year, including the selection of a new auditor,
considering the significant matters relating to
external financial reporting and ensuring that
the relationship with internal and external
auditors remains appropriate.
Composition of the Committee
On 1 December 2022, Rene Haas retired from
the Board. René Carayol, who joined the Board
on 1 November 2022, received a briefing from
Pauline Campbell upon joining the Committee.
As at 31 December 2022, the Audit Committee
comprised the four independent Non-
Executive Directors. All members are
considered to be appropriately qualified and
experienced to fulfil their role and allow the
Committee to perform its duties effectively.
For the purposes of Code Provision 24, one
member of the Committee, Pauline Campbell,
is considered to have recent and relevant
financial experience. The Committee notes
the requirements of the Code and confirms
that, having considered the requirements
against feedback provided through the Board
and Committee effectiveness review, the
Committee, as a whole, has competence
relevant to the sector in which the Company
operates. Further details of specific relevant
experience can be found in the Directors’
biographies on pages 86 to 87.
Meetings of the Committee
The Committee met six times during 2022.
Meetings are attended routinely by the Chair
of the Board, Group Finance Director, Group
Head of External Reporting, Group Head of
Internal Audit & Risk Management and the
external auditor. The Company Secretary acts
as secretary to the Committee. The meetings
cover a standing list of agenda items, which is
based on the Committee’s Terms of Reference,
and consider additional matters when the
Committee deems it necessary.
In addition to the Committee meetings, the
Chair also meets privately on occasion with
members of Management during the year, to
discuss the risks and challenges faced by the
business as well as accounting and reporting
matters and, importantly, how these are
being addressed. On two occasions during the
year, the Committee met separately with the
external auditor and the Group Head of
Internal Audit & Risk Management, without
Management present, in addition to regular
dialogue with the external auditor. From time
to time, on an ad-hoc basis, members of the
Committee, including the Chair, also attend
meetings of the Group Risk Committee.
The Chair remains satisfied that the flow of
information to the Committee is appropriate
and provided in good time, to allow members
to review matters due for consideration at
each Committee meeting. The Committee is
also satisfied that meetings were scheduled
to allow adequate time to enable full and
informed debate.
Principal responsibilities of the Committee
The Committee’s main responsibilities during
the year, as set out in the Code, were to:
• monitor the integrity of the Company’s
Financial Statements and any formal
announcements relating to the Company’s
financial performance, and to review
significant financial reporting estimates
and judgements contained therein;
• provide advice on whether the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable, and
provides the information necessary for
shareholders to assess the Company’s
position and performance, business model
and strategy;
• review the Company’s internal financial
controls and internal control and risk
management systems;
• monitor and review the effectiveness of the
Company’s Internal Audit function, including
approving the internal audit plan;
102 | Computacenter plc Annual Report and Accounts 2022
Governance Report • make recommendations to the Board about
the appointment, re-appointment and
removal of the external auditor, and, where
necessary, conduct the tender process;
• approve the external auditor’s
remuneration and terms of engagement;
• review and monitor the external auditor’s
independence and objectivity;
• review the effectiveness of the external
audit process, taking into consideration
relevant UK professional and regulatory
requirements;
• develop and implement a policy on
engaging the external auditor to supply
non-audit services, ensure there is prior
approval of non-audit services, consider
the impact this may have on independence,
take into account the relevant regulations
and ethical guidance in this regard, and
report to the Board on any improvement
or action required; and
• report to the Board on how it has
discharged its responsibilities.
Immediately following each Committee
meeting, the Chair reports to the Board on the
Committee’s activities and how it is discharging
its responsibilities as set out in its Terms of
Reference, which can be found on the Company’s
website at investors.computacenter.com.
Activities of the Committee
The Committee’s activities during the year,
which are based on its Terms of Reference,
are set out below:
Key estimates, judgements and current
financial reporting standards
The Committee reviewed the integrity of the
Group’s Consolidated Financial Statements
and, in doing so, considered the following
key estimates and judgements. In reviewing
these matters, the Committee also took
account of the views of the external auditor,
KPMG LLP (KPMG).
Technology Sourcing agent versus principal
revenue recognition
Since the finalisation of the revised Group
revenue recognition accounting policies and
adoption of IFRS 15 on 1 January 2018,
Management has continued to keep under
review the nature of the finely balanced
judgement on whether certain lines of
Technology Sourcing revenue are to be
recognised on an agent versus principal basis.
On occasion, on a deal-by-deal basis,
Management may conclude that a particular
deal is to be recognised as agent rather than
as principal. Typically, technology partners
and customers approach us with an
opportunity where the technology partner is
taking the contract and performance risks,
sets the selling price and uses Computacenter
as a pass-through agent in the channel, to
transact the deal for a set fee. Since adoption
of IFRS 15, these have been primarily large
software deals where there is no ongoing
contractual obligation of service on us
following the transaction. We have no say in
the pricing or selection of the product and are
merely standing in the sales channel between
the technology partner and customer, for the
pre-determined fee. Based on the facts and
circumstances of each deal, we assess how
the terms and conditions of the deal are
applied in practice against our revenue
recognition policies, by reviewing the
weighting applied to the agent/principal
indicators. As a result, we have classified
several of these deals as being on an agency
basis, concluding that the fee received should
be booked as net revenue.
In addition to these existing treatments,
Management performed detailed reviews of
the tentative, and then final, agenda decisions
of the International Accounting Standards
Board’s (IASB) IFRS Interpretations Committee
(‘IFRIC’) that was released on 1 December
2021, finalised on 20 April 2022 and approved
by the Board of the IASB at its May 2022
meeting. The agenda decision considered the
specific recognition criteria for standalone
software licences resold by value-added
resellers. Management produced an initial
analysis of the impacts of the agenda decision
on the Group, outlining the eventual change to
agent revenue recognition for the majority of
our software and resold services Technology
Sourcing business lines that had previously
been recognised as principal.
The Committee reviewed the initial accounting
memorandum produced by Management and
supported its proposed programme of further
investigatory analysis in this area. Following
further detailed analysis produced by
Management the Committee concluded that
the change to revenue recognition policies
adopted in the 2022 Interim Report and
Accounts was appropriate.
Qualified Interim Reporting
As described in note 3 of the 2022 Interim
Report and Accounts, in accordance with IAS 8,
a retrospective restatement of the relevant
prior period reported Financial Statements for
the period to 30 June 2021 and the year to
31 December 2021 was published in the 2022
Interim Report, due to the above change in
revenue recognition policies relating to
software licences and third-party services
agreements resold on a standalone basis,
following the finalisation of an agenda
decision by the IFRS.
For our trading businesses which operate on
our Group Enterprise Resource Planning (ERP)
system, we were able to quickly determine the
adjustments required under the new
accounting policy to restate the comparative
information through readily available
high-quality data. For one of our North
American business units, an entity operated
on a legacy ERP system following its
acquisition in October 2018, prior to its
migration to the Group ERP system on
1 September 2021, this proved more difficult.
The legacy ERP system used at the time was
not designed to produce the analysis to
identify software and resold services product
sales that are now recognised on an agent
basis, to the degree of precision required.
Further, limited data migration issues were
identified that also impacted on this analysis
post-migration and during the first six months
of 2022. The issues identified affected the
classification as agent rather than principal,
and therefore, only the quantification of some
revenue and cost of goods sold, by equal
amounts, for this business unit. Gross profit,
operating profit, profit before and after taxes,
and cash, are not changed by the new
accounting policy.
Significant data interrogation was performed
by the Group to produce the adjustment, for
the Interim Report and Accounts, for this
business unit, both for the eight-month time
period concerned in 2021, when it continued
to operate on the legacy system, and
subsequently where it now operates on our
Group ERP system. This work was required to
produce the comparative adjustment
required for this business unit, which formed
part of the overall Group and North American
Segment, restatement, and for the impact on
the first half of 2022 revenue and cost of
goods sold.
Management was unable to provide the
required level of information to the external
auditor prior to publishing the Interim Report
and Accounts and the Committee was
satisfied that KPMG required, and Management
chose to accept, the inclusion of a qualified
conclusion within its independent review
report, rather than the alternative option of
a delay releasing the Interim Report and
Accounts. The Committee received assurance
from Management that the necessary data
would be available before the conclusion of
the audit for the year ended 31 December 2022.
Management continued to cleanse and
address residual data migration issues
following the qualified conclusion on the
Interim Report and Accounts. The Committee
has been provided with an updated
accounting analysis and memorandum
showing that the necessary data has been
made available and adjustments made for the
overall Group and North American Segment for
the year ended 31 December 2022.
After reviewing Management’s information,
the Committee was satisfied with the
adjustments to record certain sales as agent,
rather than principal, for the current and
comparative reporting periods. The
Committee was also pleased to note that
Management provided sufficient data to allow
KPMG to express its audit opinion without
modification or qualification with respect
to this matter.
Computacenter plc Annual Report and Accounts 2022 | 103
Audit Committee report continued
Release of preliminary results
The published date for the release of
preliminary results was set at 20 March 2023.
This date was set later than in previous years
to allow additional time for KPMG to complete
its audit work. The Chair held regular
discussions with Management and KPMG to
confirm that the reporting would take place
as expected. It became clear that KPMG
required more time to complete its
procedures, primarily in respect of one North
American business unit. The Committee
consulted with and recommended to the
Board that an announcement be made that
the preliminary statements would be released
on 31 March 2023, as agreed with KPMG.
Technology Sourcing revenue recognition
and ‘bill and hold’ cut-off procedures
The nature of the business leads to a
significant amount of sales orders around
year end, with high volumes of ‘bill and hold’
transactions. Judgement is required to
determine if the appropriate criteria have
been met to recognise a ‘bill and hold’ sale.
There remains some risk that revenue is
recognised in the incorrect accounting period
if the judgements are not made correctly.
Management has an established set of criteria
to allow recognition of revenue, which are
applied throughout the business and designed
to ensure compliance with International
Financial Reporting Standards.
The Audit Committee supported the
auditor’s continued focus on testing
Technology Sourcing revenue cut-off,
particularly in regard to ‘bill and hold’
arrangements where customers purchase
inventory that remains in our Integration
Centers following revenue recognition.
In addition, there are a number of Professional
Services contracts where revenue is
recognised based on fulfilling the customer’s
requirements in accordance with contract
terms. Management highlights to the
Committee any contracts that may be of
interest, including the process by which such
contracts are identified.
The Committee noted that no errors with a
material impact on reported profitability were
found as a result of the auditor’s work in the
area of Technology Sourcing. Management will
consider process improvements as part of the
required change in the area of agent versus
principal revenue recognition described above.
Acquisition accounting
During 2022, the Group acquired BITS,
a Technology Sourcing reseller in the
United States, and Emerge, a Managed
Services provider located in several
Asia-Pacific countries.
The Committee reviewed the acquisition
accounting judgements, including the
valuation of acquired intangible assets, and
the differences between the provisional fair
values and the book values at acquisition.
The Committee was satisfied with
Management’s assessment that it is highly
probable that the maximum contingent
consideration will become payable and
accordingly the discounted maximum
contingent consideration has been included in
determining the provisional fair value to the
Group for BITS. The Committee also reviewed
Management’s assertion that the contingent
consideration was actually consideration
rather than remuneration, on the basis that
individuals who were selling shareholders due
the contingent consideration were not required
to remain in employment post-acquisition.
The initial accounting for the BITS and Emerge
acquisitions has concluded in most areas,
with only certain items remaining as
provisionally determined at the end of the
reporting period. The Committee will further
review final positions close to the anniversary
of the respective acquisition dates.
Exceptional and other adjusting items
The Committee considered the nature and
quantum of items disclosed as exceptional or
as other adjusting items outside of adjusted1
profit before tax in the Group’s 2022 Annual
Report and Accounts.
The Committee reviewed Management’s
schedule of £1.8 million of costs directly related
to the acquisition of BITS, which have been
classified as exceptional. The Committee noted
that these costs included advisor fees and
a finder’s fee that was paid on behalf of the
vendor on completion of the transaction. The
Committee found that these costs were
non-operational in nature, significant in size for
the reporting Segment, unlikely to recur and
required to be taken as an exceptional item in
line with our policy on acquisition costs. The
Committee therefore agreed that these costs
should be classified as outside our adjusted1
results. The Committee noted that a further
£2.0 million relating to the unwinding of the
discount on the deferred consideration for the
purchase of BITS has been removed from the
adjusted1 net finance expense and classified as
exceptional interest costs. Whilst this item is,
individually, not material, it forms part of the
collective overall cost of the acquisition and the
Committee agreed that, due to the material
size of the acquisition and the impact on the
underlying net finance expense, this should
also be treated as an exceptional item.
Management continued to exclude the
amortisation of acquired intangible assets,
and the tax effect thereon, as an ‘other
adjusting item’ outside of adjusted1 profit
after tax in the Group’s 2022 Annual Report
and Accounts. Management highlighted that
this charge had materially increased with
the acquisition of FusionStorm and Pivot.
Management’s view is that amortisation of
intangible assets is non-cash and is significantly
affected by the timing and size of acquisitions,
which affects understanding of the Group and
Segmental operating results.
Management considered the presentation of
adjusted1 profit in the first half of the Annual
Report and Accounts, after taking account of
the European Securities and Markets Authority
Guidelines on Alternative Performance
Measures, which promote the usefulness and
transparency of such measures. Management
remains satisfied with the reconciliation
between statutory and adjusted1 measures
that the Group has presented since the 2015
Interim Report, and the level of disclosure which
explains both the differences between these
measures and the reasons for the differences.
The Committee considered the nature and
quantum of items disclosed as exceptional or
as other adjusting items that are excluded
from the Group’s adjusted1 profit before tax,
and other alternative performance measures,
in the Group’s 2022 Annual Report and
Accounts. The Committee concluded that the
presentation of adjusted1 profit was
adequately explained, was intended to provide
clarity on performance and has sufficient
equal prominence with statutory profit.
Going Concern basis for the Consolidated
Financial Statements
Management prepared a paper that provided
input to the Board’s assessment of whether it
is appropriate for the Group to adopt the going
concern basis in preparing Consolidated
Financial Statements, at both the half year
and full year. To do so, Management reviewed
the Group’s financial plans and its liquidity,
including its cash position and committed
bank facilities. It also considered the Group’s
financing requirements in the context of
available committed facilities and reviewed
forecasts concerning trading performance,
which had been discussed and approved at
the 8 December 2022 Board meeting.
In making its assessment Management
assessed factors which could affect the
modelling of the Group’s financial plans and
its impact on the Going Concern assessment.
This included:
• Key financial performance forecasts for the
next 12 months and the predicted impact
on cash generation.
• Supporting models with rigorous downside
sensitivity analysis, which involves flexing
a number of the main assumptions
underlying the forecasts.
• Further downside scenario testing where
the potential impact of the principal
risks and uncertainties are applied to
the forecasts.
104 | Computacenter plc Annual Report and Accounts 2022
Governance Report • Only those risks and uncertainties that,
individually or in plausible combination, would
threaten the Group’s business model, future
performance, solvency or liquidity over the
assessment period and which are considered
to be severe but reasonable scenarios.
It also takes into account an assessment
of how the risks are managed and the
effectiveness of any mitigating actions.
• For the current year, the primary downside
sensitivity relates to a modelled, but not
predicted, severe downturn in the Group’s
revenues, beginning in 2023, simulating
a continued impact for some of our
customers from the current economic
crisis together with the Group’s revenues
being impacted by supply shortages. This
sensitivity analysis models a continued
market downturn scenario, with slower-
than-predicted recovery estimates, for
some of our customers whose businesses
have been affected by both the Covid-19
pandemic and the current economic crisis,
and a similar downturn occurring for the
remainder of our customer base. A further
impact on the Group’s Technology Sourcing
revenues through 2023 from possible
ongoing technology partner-related supply
shortage issues has also been included in
the sensitivity analysis.
• Forecast high and low points of cash
generation.
• Ability of Management to implement
leveraging or factoring to offset the impacts
of the severe downsides modelled above.
The Committee considered the assessment
described above, together with the extended
Going Concern disclosures included within the
‘basis of preparation’ note to the Financial
Statements in the Annual Report and Accounts
and advised the Board on its view. The
Committee considered whether the going
concern basis of preparation continued to be
appropriate and provided recommendations
around its adoption to the Board, with which
the Board concurred. The statement and
explanation from the Directors can be found
within the Strategic Report on page 67 and the
Basis of Preparation within the Notes to the
Consolidated Financial Statements on page 155.
Viability Statement
The Code requires the Directors to explain in
the Annual Report and Accounts how they
have assessed the prospects of the Group,
taking into account the Group’s current
position and principal risks, over what period
they have done so and why they consider that
period to be appropriate. The Directors are
further required to state whether they have a
reasonable expectation that the Group will be
able to continue in operation and meet its
liabilities as they fall due over the assessment
period they have chosen, drawing attention
to any qualifications or assumptions as
necessary. This requirement is known as a
Viability Statement.
Following review by the Group Risk Committee,
Management presented its conclusions to the
Audit Committee. These included a
recommendation of the appropriate period
for the assessment of viability that is based
on the nature of the Group’s business model
and its strategic time horizon, coupled with
short-term macroeconomic environmental
impacts. Management produces financial
forecasts for the three-year period including
an assessment, reviewed by the Group Risk
Committee, of how these forecasts would be
affected by a realistic concurrence of the
Group’s principal risks and the estimated
impact of such a concurrence.
Management considered additional
contingencies within the forecast, due to a
market downside sensitivity scenario that
continues throughout the assessment period
and relates to a modelled, but not predicted,
severe downturn in Group revenues, beginning
in 2023 as described within the Going Concern
analysis above. These downside scenarios
continue the assessment of the risks for
Going Concern throughout the assessment
period with compounding impacts to cash
flow as a result.
The financial forecasts build on the assumptions
used for the Going Concern assessment and
extend this over the three-year period.
Management includes longer-term sensitivity
analyses that range the modelled downturn in
the market across a number of factors,
including working capital usage, profitability,
dividend payments and share repurchases.
The analyses also include an assessment of
actions that Management could take to
support the balance sheet of the Company
in the event of the worst-case scenarios.
Following consideration of Management’s
assessments and conclusions, the Committee
advised the Board that it could continue to set
the period of assessment for the Viability
Statement at three years and that it could
make the statement required for the
assessment period without qualification. The
statement and explanation from the Board
can be found within the Strategic Report on
pages 67 to 68.
Parent Company investment in subsidiaries
carrying value and distributable reserves
Investments in subsidiaries are the primary
asset on the Parent Company Balance Sheet.
The Committee considers the carrying value
of these investments annually or when an
indicator of impairment is identified, as any
impairment of these investments would
reduce the Company’s distributable reserves.
Management prepared an analysis to support
the carrying value of the investments in
subsidiaries held by the Parent Company,
including assessing the cash flow forecasts
and future trading assumptions of each
subsidiary. No impairment of carrying value in
the investment in subsidiaries was identified
during the year. The Committee considered
Management’s assessments and remains
satisfied that the carrying value of each
subsidiary remains appropriate.
Management assessed the Company’s
distributable reserves, prior to the declaration
of both the interim and final dividends in
respect of the reporting period, to ensure that
sufficient reserves were legally available for
distribution. Further, Management modelled
the medium-term forecasts for distributable
reserves, ensuring that the Board’s dividend
policy could remain supported by the
generation of distributable reserves within the
Parent Company. The Committee received a
presentation of Management’s conclusions and
reported to the Board on the appropriateness
of the dividend payment with regards to the
available distributable reserves.
Taxation
Management prepared papers documenting
the Tax Strategy and the Tax Policy of the
Company. These papers document the
policies, processes and controls relating to
the Group’s tax functions and the Company’s
Tax Strategy, which can be found on the
Company’s website: computacenter.com.
The purpose of the Tax Strategy is to
communicate the policy for the management
of tax within Computacenter. It is important to
ensure that consistent and effective tax
standards are maintained across the Group
as tax, if poorly managed, can have a
significant cash and profitability impact on
the Group’s business activities, as well as
cause reputational damage.
Management presented to the Committee on
all aspects of business taxation in all
territories in which the Group is currently
operating. The Group Tax Strategy and Policy
is subject to approval by the Board annually
following its consideration by, and advice
from, the Committee.
Management prepared the calculation of the
tax liability of the Group, including uncertain
tax positions, and assessed the recognition
criteria for potential deferred tax assets
relating to jurisdictions with significant
carried forward tax losses. Future forecasts,
changes to revenue accounting standards
and local taxation rates, and potential
changes to local tax structures were taken
into account in determining the Group’s tax
rate assessment. Management made
recommendations for the consideration of
the Committee for the identification of tax
liabilities, assets and the tax rate being
disclosed in the accounts. The Committee was
satisfied that tax accounting is appropriate.
Computacenter plc Annual Report and Accounts 2022 | 105
Audit Committee report continued
Improvements to general financial reporting
Management continues to review its
accounting policies and reporting in light of
changes, general trends to improve financial
reporting and observations from the auditor.
During the period the Committee received
recommendations for consideration from
Management on a range of topics focused on
improving the quality of the Group’s financial
reporting. These included:
• Ongoing implementation of a Group-wide
Accounting Policy Handbook, to ensure
consistency in the application of the
Group’s primary accounting policies.
• Accounting treatment for certain one-off
commercial contracts with particularly
unusual or non-recurring terms.
• Analysis of the impact of inflation on longer
term Managed Services contract profitability.
• Management’s response to minor findings
and recommendations resulting from the
2021 external audit.
• The implementation of recommendations
contained within advisory publications
from the FRC relating to, amongst others,
best practice disclosures for revenue.
• Improvements in the year-end revenue cut
off procedures and pre-audit review analysis.
• Introduction of detailed year-end reporting
checklists for all Group entities, to ensure
consistent close procedures with
appropriate evidence of review.
The Committee approves of Management’s
effort to continually improve and is satisfied
with changes made or proposed relating to
the items listed.
Regulatory and legal compliance
Having been requested to do so by the Board
in accordance with Code Provision 27, the
Committee also advises the Board on whether
the Annual Report and Accounts, taken as a
whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the Group’s position
and performance, business model and
strategy. The Committee sought assurance as
to the review procedures performed by
Management, to support the Board in making
this statement. These include clear guidance
issued to all contributors to provide a
consistent approach and a formal review
process, to ensure that the Annual Report and
Accounts are factually correct and reflective
of material matters that have been discussed
by the Board throughout the year and includes
all relevant information. Following a review,
the Committee advised the Board that
appropriate procedures had been applied.
Management prepared a presentation on the
BEIS Report on Governance and Audit Reform
and provided a response on behalf of the
Company for the consideration of the
Committee. Management continued to
monitor regulatory developments, and other
upcoming reporting requirements, and
updated the Committee as required.
The effectiveness of internal controls and
of the risk management framework
On behalf of the Board, the Committee is
responsible for overseeing the effectiveness of
the Group’s systems of internal control and the
risk management framework. The Group Risk
Committee (GRC) meets each quarter to review
the key risks facing the business. These are
identified, and their likelihood and impact are
assessed, within the Group’s ‘Risk Heat Map’.
They are then reviewed in conjunction with
accompanying risk mitigation plans. The GRC
minutes, or a summary thereof, are circulated
to the Committee for review, with any matters
of note highlighted and explained to the
Committee by the GRC Chair. This includes an
analysis of how the Group’s exposure to these
risks may have moved during the previous
three months and how mitigations to the risks
have been introduced or developed, and also
provides the GRC’s assessment of the
effectiveness of the process. To assist the
Board, the Committee monitors the risk
management processes and reports from
Internal Audit.
Compliance Steering Committee
The Compliance Steering Committee (CSC)
reports to the GRC. It meets quarterly, two
weeks before the GRC, and is chaired by the
Group Compliance Manager. The Group Legal &
Compliance Director, the Chief People Officer,
the Group Data Protection Officer, the Group
Head of Internal Audit & Risk Management and
the Company Secretary make up the rest of
the CSC. The CSC determines which areas of
law or regulation apply to the Group, assigns
these to members of Management and identifies
levels of compliance and associated risk, with
the aim of ensuring that these are appropriate
to the Group. Critical areas within the CSC’s
remit include anti-bribery and corruption,
whistleblowing, data protection and export
control. The CSC reviews and promotes major
Group internal governance enhancement
initiatives. The Committee receives regular
reports from the CSC on its activities.
During the year the Committee reviewed:
• The introduction of a Group-wide
compliance dashboard.
• The deployment of compliance resource
around the world.
• Whistleblowing reports.
• The current status of work around the
Group Ethics Code, Anti-Bribery and
Corruption policy and the Whistleblowing
provisioning, and planned activity over the
following 12 months in these areas.
• The current status and planned activity
around GDPR and Modern Slavery.
• Compliance oversight of business change
processes.
• Export control.
• An update on the Supplier Code of Conduct
and Competition Policy.
• Group-wide coverage of compliance
policies and processes, and the Group’s
approach to this area.
Internal control oversight
Periodically the Committee received reports
on the operation of internal controls from
various Group functions. These included:
• A report from the Group Information
Assurance (GIA) function on its role, which
continues to be a key part of the control
framework for data security and cyber
defence, and how it fits into the overall
control structures of the Company within
the wider risk management framework.
GIA reported on the programme of
enhancements for the Cyber Defence
Center and cyber security. Where cyber
incidents, attacks and breaches are
detected by the GIA, it reports to the
Committee on the mitigations and
outcomes of any investigation, including
plans for remediation and improvements.
• Updates on the implementation of the Group’s
ERP systems into an acquired business.
• Corporate Governance Code compliance
reviews.
• A review of the Company’s processes
conducted to ensure the Annual Report and
Accounts remains fair, balanced and
understandable.
• Treasury reporting, policy and controls
including the Group Treasury Strategy and
Policy, Transactional FX Strategy and Policy
and activities of the Treasury Committee,
which retains operational oversight.
• Trade receivables control environment,
to assess the heightened risk of
customer defaults due to the current
macroeconomic environment and the
associated collection risk.
• Trade payables and other creditors control
environment, to review procedures and
payment timeliness analysis.
• Management’s review of the value of
goodwill and acquired intangibles including
the assessment of factors which could
affect the recoverability of these assets
and whether they could give rise to an
impairment.
• Annual survey results, where all members
of the Group Executive and other key senior
Management conduct a controls self-
certification exercise and the control
environment is reviewed and graded.
• The effectiveness of controls over bid
management and contract reporting
106 | Computacenter plc Annual Report and Accounts 2022
Governance Report • Updates on litigation matters.
• Updates on Audit Reform and Governance
changes as a result of the BEIS
recommendations.
• Finance organisation change and
talent review.
Whistleblowing
The Committee confirms that it is satisfied
that, as at the date of this report,
arrangements are in place to ensure that
employees are able, in confidence, to raise
any matters of concern, and for the
proportionate and independent investigation
of such concerns, including assessment of
the financial impact and any appropriate
follow-up action. During the year, the
Committee was satisfied that investigations
and follow-up actions were appropriate.
As at the date of this report, all of the Group’s
operating entities, including the recent
acquisitions of Emerge and BITS, had access
to the same whistleblowing platform.
The effectiveness of the Internal
Audit function
The Group has an Internal Audit function which
reports to the Chair of the Committee, and
also has direct access to the CEO. Its key
objectives are to provide the Board, the
Committee and senior Management with
independent and objective assurance on risks
and the related mitigating controls, and to
assist the Board in meeting its corporate
governance and regulatory responsibilities.
A formal audit charter guides the function’s
work and procedures and was updated during
the year.
The Board, through the Committee, has directed
the Internal Audit department’s work towards
areas of the business that are considered to
be the highest risk. The Committee approves
a rolling audit programme, ensuring that all
significant areas of the business are
independently reviewed over, approximately,
a four-year period. The programme and the
audit findings are assessed continually,
to ensure they take account of the latest
information and, in particular, the results of
the annual review of the effectiveness of
internal control and any shifts in the focus
areas of the various businesses.
Each year, the Committee reviews the
effectiveness of the Internal Audit
department and the Group’s risk management
programme. The formal review typically
consists of an evaluation of Internal Audit’s
activities by members of the Committee and
managers across the business who have been
subject to audit during the year. The
assessment normally covers areas such as
departmental organisation, business
understanding, skills and experience,
communication and performance.
The Committee received an update from the
Group Head of Internal Audit & Risk
Management at each meeting during the year.
The updates covered current audit activities
and the results of completed audits. The Chair
met the Group Head of Internal Audit & Risk
Management on a number of occasions during
the year, to be updated on the function’s
activities. The Committee kept Internal Audit’s
staffing levels under review throughout 2022.
The Committee has challenged and approved
the Internal Audit plan and the mapping of
that plan to the Group’s principal risks and
related mitigating controls, as set out on
pages 74 to 81. The plan is kept under review
to reflect the changing needs of the business
and to ensure that new and emerging
business risks are appropriately considered
within it.
Internal audit independence
In all material respects, Computacenter
follows the ‘Internal Audit Code of Practice:
Guidance on effective internal audit in the
private and third sectors’ published by the
Chartered Institute of Internal Auditors in
January 2020. In particular the Head of
Internal Audit is ultimately responsible to the
Chair of the Audit Committee, with a
secondary reporting line to the Group Finance
Director for administrative purposes only.
To guarantee its independence and objectivity
Internal Audit does not:
• Set the Company’s risk appetite.
• Impose risk management processes.
• Take decisions on risk mitigation or
implement risk mitigation actions on behalf
of business management.
• Perform operational duties, including the
operation of policies and procedures.
• Initiate or approve accounting
transactions.
In addition, the Audit Committee:
• Is responsible for the appointment and
removal of the Head of Internal Audit.
• Approves the annual Internal Audit plan
and budget.
• Receives regular updates from the Head of
Internal Audit.
Performance of the Committee
The externally facilitated review indicated
that the Committee continues to perform
effectively. No significant issues in the way
the Committee functions were highlighted as
being in need of remediation. The Committee
agreed that it would review the way in which it
addressed its terms of reference to ensure
that the focus on critical matters remained
appropriate whilst considering whether other
matters could be delegated to other
Committees of the Company. Refer to page 92
for further details on the externally facilitated
evaluation carried out.
External audit tender
The Committee considers the re-appointment
of the external auditor each year, as well as
remuneration and other terms of engagement.
Following a discussion with KPMG, subsequent
to the adoption of the 2021 audit of the
Company and Group accounts, it was mutually
agreed that the Committee would proceed
with an immediate audit tender process for
the 2023 year end that would explore
different, and fresh, perspectives on the
conduct of the audit of the Group. As a result
of discussions with the firm, it was agreed
with KPMG that they would not participate in
this process.
In 2022, the Committee led a formal, rigorous
and competitive tender process for external
audit services for the 2023 financial year
onwards. The Committee appointed an internal
Selection Panel (the ‘Panel’) on its behalf to
review the competitive tender bids and make
recommendations to it for consideration.
Selection Panel
The Panel consisted of two members of the
Committee, including the Chair, both Executive
Directors and three senior members of the
finance team.
The steps that were undertaken as part of the
process are set out below:
Investor consultation
The Committee considered whether to consult
with major investors and key investor
associations at the outset of the process,
to invite them to discuss the Company’s
proposed approach to the tender process,
including details of audit firms to be invited to
participate in the tender process. However
similar approaches from FTSE listed
companies have not typically solicited
responses and, due to the timescales
involved, the Committee decided to proceed
with the process to ensure that it could be
completed in time to enable a sufficient
transition period from the incumbent firm.
Expressions of interest
The Company held discussions with three of
the ‘Big Four’ firms, as well as four mid-tier
firms to capture expressions of interest.
Deloitte LLP and PriceWaterhouseCoopers LLP
both confirmed that they would not be able to
perform the 2023 audit as they would not be
considered independent at the point of
commencement of the audit engagement.
Further, Ernst & Young LLP and RSM UK Group
LLP, were both unable to participate in the
tender due to forecast resource constraints
in 2023 preventing them from assembling an
audit team.
Computacenter plc Annual Report and Accounts 2022 | 107
Audit Committee report continued
Invitation to tender
The Company issued a formal Request for
Proposal (RFP) to the three firms which had
confirmed a willingness to participate in the
tender process, BDO LLP (BDO), Grant Thornton
UK LLP (Grant Thornton) and Mazars LLP
(Mazars), detailing the evaluation criteria
which would be used by the Panel in informing
its decision, which included but were not
limited to:
• Quality and clarity of audit approach
• Quality record of the firm, lead partner and
senior audit personnel
• Appropriate geographical breadth to cover
our locations
• The quality of understanding of the audit
risk areas
• Audit transition and implementation plan
• Depth of understanding of
Computacenter’s business, its industry and
the risks in the industry
• Audit team knowledge and experience,
including specialist resource
• Overall quality of the response and
adherence to RFP instructions
Subsequent to the issuance of the RFP, BDO
withdrew from the tender process.
Lead audit partner interviews
Members of the Panel interviewed the
proposed lead audit partners from each firm
to enable the Committee to assess their
ability to work with us and lead the quality
of team that we required.
Data room and preliminary meetings
The data room was opened to participating
firms who were also granted access to key
management and Committee members.
Further engagement
Initial questions/requests for further
information were received from the
participants. We provided detailed responses
to these requests to all participating firms, not
just the firm that requested the information.
Written proposal
The Company received a written proposal
from each of the firms. The firms were also
asked to review and comment on the previous
year’s Annual Report as part of their
submission proposals.
Presentations and Q&A session
At the final stage, the participating firms
delivered presentations and their proposed
audit plan, followed by a question-and-
answer session. The meetings were attended
by all of the Panel members.
Evaluation, assessment and Committee
recommendation
The Committee’s unanimous view was that
each firm participated with energy,
enthusiasm and integrity and that each could
perform a quality audit of the Group. However,
based on the evaluation criteria above, the
Panel discussed and unanimously agreed to
recommend Grant Thornton to the Committee
for consideration, but also expressed their
thanks to Mazars for its participation.
Following a review, the Committee concurred
with the Panel’s findings and recommendations.
References
Independent references for the successful
firm’s lead partner were taken by the
Committee Chair.
Board decision
Based on the Panel’s findings, the Committee
recommended the two firms to the Board,
with a preference for the tender to be
awarded to Grant Thornton. The Board
endorsed the Committee’s recommendation.
Announcement
Once the terms of engagement were finalised,
the independence of Grant Thornton had been
confirmed, and the Company was clear on
transition arrangements, the Company
announced the results of the audit tender
on 9 December 2022.
Audit transition plans
The proposed external auditor, Grant
Thornton, has started undertaking
transitional activity from December 2022 in
preparation for the external audit cycle in
2023, by shadowing the outgoing external
auditor and attending the Committee
meetings from December 2022. This will aid
a smooth transition and allow Grant Thornton
to embark on the 2023 audit as well prepared
as possible. Grant Thornton will also hold
meetings with key members of the senior
management team regularly during this period,
including a transition workshop involving a
number of individuals from the Company.
In anticipation of this start date and to ensure
full auditor independence and objectivity,
Grant Thornton and Computacenter
management reviewed the non-audit services
provided by Grant Thornton to Computacenter
in 2021 and 2022. All prohibited services
ceased by 31 December 2022.
The Committee will monitor the transition of
the auditor throughout the year to ensure the
effectiveness and independence of Grant
Thornton. The Board will seek approval for
Grant Thornton to be appointed as external
auditor at the 2023 AGM for the year ending
31 December 2023.
The integrity of the Group’s relationship with
the auditor and the effectiveness of the
external audit process
External audit
The Committee oversees the Group’s
relationship with its auditor and makes
recommendations to the Board concerning
the appointment, re-appointment and
remuneration of the auditor. KPMG LLP was
first appointed as the Group’s auditor with
effect from May 2015, following a competitive
tender process.
Re-appointment of the auditor
As described above, the Committee
recommended to the Board the appointment
of a new auditor for the 2023 audit.
Rotation of lead audit engagement partner
Unfortunately, due to personal circumstances
unrelated to KPMG or the audit of
Computacenter plc, the partner responsible
for the Computacenter Plc audit throughout
the year, Mr David Neale, was unable to
complete the finalisation of the audit.
Therefore, another audit partner, who had
already been involved in the audit, Mr Mark
Flanagan, signed the audit opinion. Mr Flanagan
confirmed to the Committee that he had
sufficient time and access to all areas of the
work performed to be able to sign the audit
opinion on behalf of KPMG. Further, KPMG has
communicated to the Committee outlining
the general procedures to safeguard
independence and objectivity, disclosing the
relationship with the Company and confirming
their audit independence.
During the reporting period, the Company
complied with The Statutory Audit Services
for Large Companies Market Investigation
(Mandatory Use of Competitive Tender
Processes and Committee Responsibilities)
Order 2014.
Effectiveness of the external audit process
The Committee places great importance on
ensuring a high-quality and effective external
audit process. When conducting the annual
review, the Committee considers the
performance of the auditor as well as its
independence, compliance with relevant
statutory, regulatory and ethical standards,
and objectivity. The Committee reviewed the
effectiveness and quality of the external audit
process by:
• reviewing the audit plan, including identified
significant risks and monitoring changes
in response to new issues or changing
circumstances, including recommending
the performance of additional interim
procedures and more effective
communication with component teams;
• reviewing the planned audit hours of
each component;
108 | Computacenter plc Annual Report and Accounts 2022
Governance Report • reviewing the audit scope with the lead
audit engagement partner, to ensure
adequate coverage of full-scope audit
components over the Group’s operations;
• understanding the materiality thresholds
adopted by KPMG at each reporting period,
for both the audit of the Group and its key
audit components;
• attending KPMG’s annual ‘Academy Day’
audit planning workshop, which was
attended by senior members of the
worldwide audit team and senior finance
managers from across the Group;
• receiving reports on the results of the audit
work performed; and
• considering the report of the FRC’s Audit
Quality Review team (AQRT) on KPMG.
The Committee reviewed the audit plan for
the acquired entities for the part-year ended
31 December 2022 with KPMG, to ensure audit
coverage was appropriate.
The Committee reviewed the year-end report
to the Committee and discussed it with the lead
audit engagement partner. The Committee
further reviewed the effectiveness of the
external audit process by means of a
questionnaire, which was completed by key
stakeholders and relevant Group Management.
The matters covered by the questionnaire
included the understanding of the business
and its audit risks, and the degree of
scepticism, challenge and competency of the
KPMG employees that comprise the audit
team. The results were discussed as a specific
agenda item at the Committee meeting
immediately following the completion of the
questionnaire process, and actions requested
by the Committee to enhance effectiveness
were followed up with a series of face-to-face
meetings and continue to be monitored
as appropriate.
The Committee also discussed the report
published by the AQRT into the findings of its
inspections of audits carried out by KPMG. The
Committee is satisfied that the audit team
was aware of the findings and was provided
assurance that the ability of the team to
provide a quality audit was not impaired.
Auditor’s remuneration:
– Audit of the Financial Statements
– Audit of subsidiaries
Total audit fees
Audit-related assurance services including the review of the Interim Report and Accounts
Taxation compliance services
Total non-audit services
Total fees
2022
£m
0.2
2.3
2.5
0.1
–
0.1
2.6
2021
£m
0.1
1.7
1.8
0.1
0.1
0.2
2.0
Auditor independence
The Committee places considerable
importance on ensuring the continuing
independence of the Group’s auditor.
This topic is reviewed at least annually with
the auditor, which confirms its independence
to the Committee twice a year. In addition
to the above, the Company paid £0.3 million
(2021: £0.5 million) to Ernst & Young LLP
to perform audit procedures to meet the
requirements as a component auditor on
the Group audit, reporting to KPMG.
Non-audit services
To help maintain the auditor’s independence,
the Committee has a policy regarding the
scope and extent of non-audit services
provided by the Group’s auditor, which is
summarised below.
The auditor is appointed primarily to report on
the annual and interim Consolidated Financial
Statements. The Committee places a high
priority on ensuring that the auditor’s
independence and objectivity is not
compromised either in appearance or in fact.
Equally, the Group should not be deprived of
expertise where it is needed and there may
be occasions where the external auditor is
best placed to undertake other accounting,
advisory and consultancy work, in view of
its knowledge of the business, as well as
confidentiality and cost considerations.
Under the Committee’s non-audit services
policy, the Group auditor should not be
engaged to undertake work which constitutes
a prohibited non-audit service, as defined
under provision 5.167 of the FRC’s Ethical
Standard. Any other non-audit service
(a ‘Permitted Service’) must, to the extent
that it is not viewed as ‘trivial’, be approved
in advance by the Committee.
In each case where the Group auditor is
authorised to perform a Permitted Service,
the Committee will assess threats to the
auditor’s independence and the proposed
safeguards to be applied when such services
are carried out. It will also document what
action was taken by the Group auditor,
including appropriate safeguards where
necessary, to ensure that its independence
was not compromised as a result of
performing the Permitted Service. The
Committee will consider alternative suppliers
and competitive tenders and then discuss and
document why it viewed the Group auditor as
the most appropriate party to perform the
Permitted Service.
The Committee monitors compliance with this
policy by monitoring the level of non-audit
work provided by the external auditor,
resulting in non-audit fees being 4.0 per cent
of KPMG’s overall audit fee during 2022 (2021:
11.1 per cent), as set out above. The Group
auditor will, in no circumstances, undertake
non-audit services for the Group to the extent
that the total fee payable by the Group to its
auditor exceeds 70 per cent of the average
annual statutory fee payable by the Group
over the last three consecutive years. The
Group ceased using the Group’s auditor for all
taxation services within the EU during 2017.
During the year, KPMG provided only trivial
non-audit services to the Group. Any trivial
non-audit services provided were subject to
KPMG’s review of the impact on its own
independence against the Group’s non-audit
services policy. None of the trivial
engagements constituted a prohibited
non-audit service and the Committee was
satisfied that the independence of KPMG,
as Group auditor, was not affected.
Pauline Campbell
Chair of the Audit Committee
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 109
Directors’ Remuneration report
Key areas of focus during 2022
• Proposing a revised Directors’
Remuneration Policy to shareholders
for approval in 2023
• Remuneration matters related to the
appointment of CFO-designate
• Assessment of variable remuneration
outcomes for the Executive Directors
including consideration of windfall gains
Areas of focus for 2023
• Continue to review Annual Bonus and
PSP measures and targets to ensure that
they remain aligned with performance
and strategy
• Ongoing consideration of sustainability
measures
ANNUAL STATEMENT FROM THE CHAIR
OF THE REMUNERATION COMMITTEE
Dear Shareholder,
On behalf of the Board, I am pleased to
present the Directors’ Remuneration report
for the year ended 31 December 2022.
The report that follows is split into three sections:
• this Annual Statement;
• the revised Directors’ Remuneration Policy
(the ‘Policy’) on pages 114 to 121, which will
be subject to a binding vote by shareholders
at the Company’s AGM to be held on 17 May
2023; and
• the Annual Report on Remuneration on
pages 122 to 133, which includes
information concerning the amount paid to
the Executive and Non-Executive Directors
in respect of 2022, and details of how the
Policy will be implemented in 2023. It will be
subject to an advisory vote by shareholders
at the Company’s 2023 AGM.
Our approach to remuneration
I would like to start by taking the opportunity
to thank our shareholders for their ongoing
support of the Committee in its work since
the approval of the current Directors’
Remuneration Policy in May 2020.
Our remuneration philosophy continues to be
centred on the principle that the amount paid
to the Executive Directors should be clearly
linked to their levels of performance and the
value delivered to shareholders. This principle
has guided the Committee in its discussions
and decision making during the year and the
remuneration outcomes described in more
detail on pages 122 to 132. The executive
remuneration structure at Computacenter is
heavily weighted towards variable pay, which
rewards stretching financial and strategic
targets delivered over the short and long-
term. In being simple, straightforward and
transparent, the Committee believes that it
also reflects Computacenter’s Winning
Together Values, prioritising the long-term
interests of the Group, as well as being easily
understood by our stakeholders.
Directors’ Remuneration Policy
In line with the three-year lifecycle, the
Directors’ Remuneration Policy will be put
before shareholders for approval at the
Company’s AGM in May 2023. The Committee
undertook a comprehensive review of the
existing Policy during the year, considering
whether it remained fit for purpose taking
into account the significant growth of the
business and the development of the
Company’s strategy since the previous Policy
vote in May 2020. As part of the process, we
consulted with and considered feedback from
our major shareholders, which helped to
affirm and support the Committee’s view that
material changes to the Policy were not
required. We are pleased that, subject to
shareholder approval, our Remuneration
Policy will provide continuity with a framework
that is well understood by our shareholders
and Executive Directors. The full revised Policy
is set out on pages 114 to 121 of this report.
Business context – the year under review
A very strong finish to the year saw the Group
achieve a further year of adjusted1 diluted
earnings per share growth, following two
years of outstanding profit growth in 2020
and 2021. The Board viewed this as a good
in-year performance, given the headwinds
faced by our Services business.
The Technology Sourcing performance was
excellent across the Group. Our Services
revenue performance was strong, whilst our
Services margin performance was impacted
by the unwinding of Covid-related benefits,
and inflationary pressures.
Group adjusted1 profit before tax for the year
increased by 3.2 per cent, to £263.7 million.
Adjusted1 diluted EPS, our primary EPS
measure, increased by 2.5 per cent to 169.7
pence per share (2021: 165.6 pence per share)
and our proposed 2022 full-year dividend has
increased by 2.4 per cent, to 67.9 pence per
share (2021: 66.3 pence per share). Further
detail on the Group’s performance is set out
earlier in the Annual Report on pages 24 to 37.
Remuneration outcomes
The Committee reviewed performance
against the conditions set for the annual
bonus for 2022. Despite the robust
performance over the year, as summarised
above, the Group’s result was towards the
bottom end of the range of stretching
financial targets set, and therefore levels of
pay-out for the Executive Directors were lower
than in previous years. The Group CEO received
27.85 per cent of the award at £271,538, and
the Group FD received 25.85 per cent at
£123,175, with 50 per cent deferred into
Computacenter shares.
The Performance Share Plan (PSP) awards
granted in March 2020 were based on the
Company’s adjusted1 diluted EPS and Group
Services revenue performance over the three
financial years ended 31 December 2022. Over
this period, the Company has seen significant
growth, with an increase in adjusted1 diluted
EPS of 22.42 per cent per annum. The EPS and
Group Services revenue targets were met in
full, and therefore 100 per cent of the awards
will vest and be subject to the two-year
holding period.
In approving the levels of vesting under the
PSP, in line with investor guidance, the
Committee considered the issue of whether
there had been excessive ‘windfall gains’ for
the Executive Directors taking into account
the market volatility in 2020. In undertaking
this assessment, the Committee reviewed a
range of factors including (i) the grant price
used for the 2020 awards, and the number of
shares awarded, which were within the range
of previous grants (ii) the performance
delivered over the period, and (iii) the wider
110 | Computacenter plc Annual Report and Accounts 2022
Governance Report shareholder experience. Following this
analysis, the Committee agreed that no
adjustment should be made to the level of
awards vesting in March 2023 and that the
value to be delivered was appropriate in the
context of performance.
The Committee considered the bonus and
PSP formulaic outturns in the context of the
external environment, the performance of
the business, wider Company and individual
performance, the shareholder experience,
the customer experience, and the treatment
of employees throughout the rest of the
Group. Taking all of the above into account,
the Committee considered the bonus and
PSP outcomes to be a fair reflection of
performance, and no discretion was exercised
to vary the amount.
Finance Director transition
For the first time since it became a public
company, Computacenter announced during
the year that there would be an upcoming
change of Executive Director. Following his
period of outstanding service with the
Company, Tony Conophy will retire from his
position as Group Finance Director (GFD) and
an Executive Director of Computacenter plc.
He will step down from the Board with effect
from 1 June 2023, and remain with the
Company for a further period of up to three
months to ensure a comprehensive transition.
Tony Conophy’s remuneration will be treated
in accordance with the Company’s approved
Remuneration Policy and his service contract.
Further detail is set out on pages 128 to 129.
The Board was pleased to appoint Christian
Jehle as CFO, effective 1 June 2023. As
disclosed at the time of his appointment,
Christian’s salary has been set at £450,000,
with a pension allowance of five per cent of
salary, in line with the wider Computacenter
workforce in the UK. Christian will be eligible
to participate in the Company’s variable pay
plans in line with our Remuneration Policy,
with a maximum annual bonus opportunity
of 150 per cent of salary and a PSP
opportunity in 2023 of 175 per cent of salary.
This remuneration package reflects the
importance placed by the Board on recruiting
the strongest possible candidate to replace
Tony, with a specific skillset to further develop
the finance function, as the business needs of
Computacenter change, and ensure that it
remains in a position to best support and
enable the Group’s continued growth.
The search process demonstrated the
competitive landscape and recruitment
market in which we operate, and provided
direct insight into the level of packages
required to attract high-quality candidates.
The Committee was also mindful that the
salary for the GFD role was not adjusted at the
same time as the CEO’s salary was last year to
take into account the fact that the size and
the complexity of the business has increased
materially over recent years, including the
expanded geographic footprint of the
business as a result of strategic acquisitions,
including Pivot Technology Solutions Inc. and
BT Services France. The Committee also
referenced market data both for the UK and
against a global peer group. Taking all of this
into account, the Committee considered
that the remuneration package for the role
was appropriate.
Christian will also receive a one-off buy-out
award to compensate for remuneration
arrangements forfeited on leaving his
previous employer, taking into account
shareholder expectations around the value,
form of award, and time horizons. These are
set out in more detail on page 129.
Wider workforce considerations
In line with the Committee’s broader
responsibilities, the Committee reviewed
information on broader workforce policies
and practices, as well as the Company’s
gender pay gap reporting. This information
provided important context for the
Committee’s decisions taken during the year.
As part of this, the Committee was kept
informed of Management’s proposals and
actions to ensure that decisions concerning
the Group’s wider workforce considered the
ongoing impact of inflation within a number
of our core countries, including the current
cost of living crisis in the UK. In this context,
an additional one per cent salary increase
was awarded to all Computacenter employees
(excluding the Executive Directors and Group
Executive Committee) with effect from 1 April
2022, in addition to the scheduled salary
review in the first quarter of 2022. For 2023,
the average increase in salaries across the
Group is 6.1 per cent, which the Committee
and Board considered represents an appropriate
balance between mitigation of the inflationary
pressures being felt by many of our employees
with ensuring a sustainable cost base for the
business moving forward.
We continue to ensure that employees have
an opportunity to share in our success
through our Sharesave plan, which we have
operated for several years. Following the
launch of the most recent scheme in 2022,
the employee participation rate in these
schemes, where an employee is in at least one
active savings scheme, is 55 per cent of all
employees in the UK (2021: 55 per cent) and
23.9 per cent in Germany (2021: 21.8 per cent).
This is the fourth year of operation in the US
business, with an overall participation rate of
21.8 per cent of the US employees.
2023 remuneration
The salary for Mike Norris and Tony Conophy
will be increased by 4.8 per cent, below the
average wider workforce increase. The
Committee considered it appropriate to
award Tony a salary increase in line with the
CEO as he will be working for more than six
months of the financial year to ensure an
effective handover with Christian.
The 2023 bonus opportunity and PSP award
level for the CEO will remain unchanged, at
150 per cent and 200 per cent of salary
respectively. The remuneration arrangements
for the incoming CFO have been set out earlier
in this letter. The performance measures and
weightings will remain unchanged for both
the annual bonus and the PSP. The CEO’s
annual bonus personal objectives have been
developed further and now include an
objective based on the environment, as well
as diversity and inclusion. The Committee
considers ESG to be an important area of
focus for the Board and is aware of investor
sentiment regarding the use of ESG
performance measures in incentive plans.
The Committee will continue to keep this area
under review as our sustainability strategy
continues to mature.
The Committee considers that the current
PSP award levels remain appropriate as the
share price (at the time of this report being
finalised) is broadly in line with the share
price at the time of the 2021 PSP award and
materially higher than every PSP grant made
prior to that date. The PSP award in 2022 was
made close to an all-time high and the share
price performance since then largely reflects
a wider sell-off in the general market and
technology sector. The Committee will review
whether there have been excessive windfalls
on vesting and take the necessary steps to
mitigate if required.
Committee performance
During the year, a review of the Committee
and its activities was completed by the
independent external evaluator, Board
Excellence. The Committee was pleased to
note the findings of Board Excellence relating
to its performance, and having reviewed
these with the Board, is comfortable that it
continues to be effective in its role. Its
findings are set out in more detail on page 92.
The previous review at the end of 2021
highlighted the Committee’s intention to
continue to consider the way in which ESG
factors are taken into account for remuneration
purposes. This has been discussed by the
Committee in the year, with an environmental
objective included as part of the CEO’s annual
bonus personal objectives for 2023.
The Committee’s role is to ensure that the
remuneration paid to the Executive Directors
reflects the Group’s performance. I hope that,
having read this report, shareholders will be
satisfied that the Committee has discharged
its duties appropriately and in line with your
interests. The Committee and I would
welcome any comments that you have on
its content.
Ros Rivaz
Chair of the Remuneration Committee
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 111
Directors’ Remuneration report continued
AT A GLANCE: IMPLEMENTATION OF THE NEW REMUNERATION POLICY FOR 2023 AND KEY DECISIONS IN 2022
The table below summarises how key elements of the Remuneration Policy will be implemented in 2023 and key decisions taken by the Committee
for the year ended 31 December 2022.
Element
Base salary
(from 1 January 2023)
Pension
Annual bonus opportunity
Annual bonus measures
Annual Bonus deferral
Performance Share Plan (PSP)
opportunity
PSP measures
PSP holding requirement
Shareholding guideline
Chief Executive Officer
Mike Norris
£681,200 (4.8 per cent increase, lower than the wider
workforce increase of 6.1 per cent)
Five per cent (in line with UK employees)
Maximum: 150 per cent of salary
• The majority of the bonus will be based on financial measures and the remainder will be based on
Chief Financial Officer*
Christian Jehle (from 1 June 2023)
£450,000 (effective on appointment)
Five per cent (in line with UK employees)
Maximum: 150 per cent of salary
non-financial measures.
• For 2023, the financial measures are Group adjusted1 profit before tax (50 per cent), Services contribution growth
(10 per cent), cash balance (10 per cent), and costs (10 per cent).
• The remainder of the annual bonus (20 per cent) will be based on stretching personal objectives for the year.
• Performance measures will be disclosed in full retrospectively.
• 50 per cent of the annual bonus will be deferred into shares, with half the shares payable after one year and the
remaining half after two years.
Maximum: 200 per cent of salary
Maximum: 175 per cent of salary
• 2023 PSP awards will be based on the Group’s adjusted1 diluted earnings per share (70 per cent) and Services
revenue growth (30 per cent).
• Performance will be measured over a three-year period.
• Targets are disclosed prospectively later in this report.
• PSP awards are subject to a two-year, post-vesting holding period.
• 200 per cent of salary in-employment shareholding guideline.
• Post-cessation shareholding requirements apply at the same level as the in-employment guideline (or actual
shareholding, if lower) for two years after stepping down from the Board.
Malus and clawback
• Malus and/or clawback provisions apply to annual bonus awards, including deferred awards for a period of two
years, and to PSP awards up to the fifth anniversary of grant.
• The malus and clawback provisions are set out in the Remuneration Policy later on in this report.
CEO Year-end outcomes:
2022 Bonus outcome
2020-22 PSP outcome
• 27.85 per cent of maximum pay-out.
• 100 per cent of maximum vesting.
*
As announced, Tony Conophy is retiring and will step down from the Board of the Company at the time that Christian is appointed. Details of Tony’s leaving arrangements are set out in
this report.
112 | Computacenter plc Annual Report and Accounts 2022
Governance Report
ALIGNMENT OF OUR POLICY WITH THE UK CORPORATE GOVERNANCE CODE
The Committee considers that the current Remuneration Policy and its implementation appropriately address the following principles, as set out
in the UK Corporate Governance Code.
Principle
Clarity
How the Committee has addressed this
• The Committee is committed to providing open and transparent disclosures with regards to executive
remuneration arrangements.
• As part of the review of the Remuneration Policy undertaken in 2022, we consulted with our major shareholders in
order to allow their feedback to be considered by the Committee. This feedback assisted the Committee in deciding
that material changes to the policy were not required.
Simplicity
• In determining the remuneration framework, the Committee was mindful of avoiding complexity and ensuring that
arrangements are easy to understand. Feedback we have received from our shareholders indicates that our
Executive Remuneration framework is well understood outside our organisation.
• Our remuneration arrangements are simple in nature, comprising three main elements – fixed pay (comprising of
base salary, pension and benefits), variable short-term incentives (annual bonus), and variable long-term incentives
(PSP awards). This framework is well understood by both participants and shareholders.
Risk
• The Committee believes that the structure of remuneration arrangements does not encourage excessive
Predictability
risk taking.
• The remuneration framework has a number of features which align remuneration outcomes with risk, including
a two-year, post-vesting holding period applied to any PSP awards, a deferred annual bonus plan and personal
shareholding guidelines applying both in-employment and post-employment.
• In addition, malus and clawback provisions apply to both the annual bonus and PSP awards.
• The Remuneration Policy outlines the threshold, target and maximum levels of pay that Executive Directors can earn
in any given year over the three-year life of the approved Remuneration Policy. Actual incentive outcomes vary
depending upon the level of performance against various measures, with performance against targets normally
disclosed in the Annual Report on Remuneration each year. Areas over which the Committee can exercise discretion
are clearly outlined in the proposed Directors Remuneration Policy as set out from pages 114 to 121.
Proportionality
• The Committee is satisfied that the Remuneration Policy does not reward poor performance. Payment of the annual
Alignment to culture
bonus and PSP is subject to the achievement of stretching performance targets, which are clearly linked to the
Group’s strategy.
• Both the Committee and Executive Directors are cognisant of the pay and conditions for the wider workforce, and
this is taken into account when considering Executive remuneration. Feedback and related questions from our
workforce are provided to the Workforce Engagement Director during her annual engagement process.
• Additionally, the Committee retains the discretion to adjust formulaic outcomes under the annual bonus and/or PSP
should it consider that the outcome is not aligned to the underlying performance of the Company or individual.
• The performance measures that are used for the annual bonus and PSP are clearly linked to delivery of the Group’s
Strategic Priorities. In addition, 20 per cent of the annual bonus is based on achievement against non-financial
strategic targets, which ensures both financial and non-financial strategic goals are considered. As set out in the
Chair’s letter on page 110, the Committee believes that the remuneration structure is simple, straightforward and
transparent, reflecting Computacenter’s Winning Together Values (especially ‘Considering the Long-Term’ and
‘Understanding People Matter’).
Computacenter plc Annual Report and Accounts 2022 | 113
Directors’ Remuneration report continued
COMPUTACENTER’S REMUNERATION POLICY
This section is the Group’s Remuneration Policy (the Policy), as reviewed and approved by the Board. As required, it complies with Schedule 8 to The
Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (as amended).
It is intended that the Policy will be put before shareholders for approval by way of a binding vote at the Company’s AGM on 17 May 2023. If approved
by shareholders, the Policy will have effect immediately thereafter. Until such approval, the Company’s existing Remuneration Policy will continue
to apply.
Summary of decision-making process and changes to policy
In determining the new Remuneration Policy, the Committee followed a robust process which included discussions on the content of the Policy at
three Remuneration Committee meetings. The Committee considered input from Management and our independent advisors, and sought the
views of Computacenter’s major shareholders. The Committee also assessed the Policy against the principles of clarity, simplicity, risk management,
predictability, proportionality and alignment to culture. Further information on the Committee’s decision-making process is set out in the Annual
Remuneration report.
The Committee is of the view that the current remuneration framework has worked as intended, with strong alignment between pay and
performance, and remains aligned to Computacenter’s remuneration philosophy and business strategy, as well as best practice. As such, there
are no substantive changes to the Policy. Minor changes have been made to the Policy to clarify its intentions.
Policy table
Base salary
Purpose and link to strategy
Operation
Maximum opportunity
Performance measures
Annual bonus
Purpose and link to strategy
Operation
Supports the recruitment and retention of Executives of the calibre required to deliver the Group’s strategy.
Base salaries are paid in cash and reflect an individual’s responsibilities, performance, skills and experience.
Normally reviewed annually with any changes typically effective on 1 January, taking into account the factors
above and the level of pay settlements across Computacenter Group, the performance of the business and
general market conditions. Salary levels at other organisations of a similar size, complexity and business
orientation will be reviewed for guidance.
A review may not necessarily result in an increase in base salary.
An exceptional review may take place to reflect a change in the scale or scope of a Director’s role, for example
(but not limited to) a major acquisition.
Salaries in respect of the year under review (and for the following year) are disclosed in the Annual Report
on Remuneration.
There is no prescribed maximum base salary or maximum annual increase. Ordinarily any salary increase will not
exceed our standard approach to increases for other employees in the Group. Higher increases may be
considered in certain circumstances as required, for example, to reflect:
• an increase in scope of role or responsibility;
• performance in role; or
• an Executive Director being moved to appropriate market positioning over time.
Individual and business performance are taken into consideration when deciding salary levels.
To incentivise the delivery of annual, short-term, stretching financial and normally also non-financial objectives.
To align pay costs to affordability and the value delivered to shareholders.
Performance measures and targets are set at the beginning of each financial year. Performance is normally
assessed over one financial year.
Normally, 50 per cent will be paid in cash and 50 per cent will be deferred into Computacenter shares, with half
the shares payable after one year and the remaining half after two years, unless the Committee determines
otherwise. Deferred awards will normally be granted under the Deferred Bonus Plan.
Deferred awards will usually include the right to receive dividend equivalents in respect of dividends paid,
calculated on such basis as the Committee determines.
Malus and clawback provisions will apply, as set out in the notes to this table.
The Committee has discretion to vary bonus payments downwards or upwards in appropriate circumstances,
including if it considers the outcome would not be a fair and complete reflection of performance. To the extent
that this discretion is exercised, this will be disclosed in the relevant Directors’ Remuneration report.
114 | Computacenter plc Annual Report and Accounts 2022
Governance Report
Maximum opportunity
The maximum annual bonus opportunity in respect of any financial year is 150 per cent of base salary.
Performance measures
Performance Share Plan
(PSP)
Purpose and link to strategy
Operation
Maximum opportunity
Performance measures
Bonus opportunities in respect of the year under review (and for the following year) are disclosed in the Annual
Report on Remuneration.
Normally, the majority of the bonus will be based on financial measures and the remainder on non-financial measures.
Financial measures may include profitability, cost management, cash management and other appropriate measures.
Non-financial targets will be targets set by the Committee, including the delivery of our strategy and/or the
Executive Directors’ personal objectives for the year.
Targets are usually reviewed and approved annually by the Committee, to ensure that they are stretching and
adequately reflect the strategic aims of the Group.
The Committee determines the threshold and target payout levels each year, taking into account the level of
stretch in the targets set. The level of overall bonus award which is payable for threshold performance will not
normally exceed 30 per cent of the maximum opportunity.
To align the interests of Executive Directors and shareholders. To incentivise the achievement of longer-term
profitability and returns to shareholders, and growth of earnings in a stable and sustainable manner.
Awards of nil-cost options (or equivalent) which are granted on a discretionary basis and will normally vest
subject to performance and continued employment at the end of a performance period which is usually at least
three years.
PSP awards will normally be subject to a two-year holding period following vesting. The shares held during the
holding period will include the right to receive dividend equivalents on the vested shares in respect of dividends
paid over the period from the end of the performance period to the date on which the Executive Director is first
able to acquire shares pursuant to the award, calculated on such basis as the Committee determines.
The Committee normally reviews the performance criteria, targets and weightings prior to each grant in line with
business priorities, to ensure they are challenging and fair.
The Committee has discretion to vary the percentage of awards vesting downwards or upwards in appropriate
circumstances, including if it considers that the outcome would otherwise not be a fair and complete reflection
of performance over the performance period.
Awards are subject to malus and clawback provisions, as set out in the notes to this table.
The maximum opportunity under the PSP in respect of any financial year is 200 per cent of annual base salary
or 400 per cent of annual base salary in exceptional circumstances, in line with the current PSP Plan Rules as
approved by shareholders.
The face value of awards in respect of the year under review (and for the following year) are disclosed in the
Annual Report on Remuneration.
For achievement of a threshold performance level (which is the minimum level of performance that results in any
part of an award vesting), no more than 25 per cent of the award will vest.
Earnings per share is currently the primary measure for our Performance Share Plan, but the Committee may
exercise its discretion to introduce additional or alternative measures which are aligned to the delivery of the
business strategy.
Details of the performance conditions applied to awards granted in the year under review and to be granted in
the forthcoming year are set out in the Annual Remuneration report for the relevant year.
Computacenter plc Annual Report and Accounts 2022 | 115
Directors’ Remuneration report continued
Retirement benefits
Purpose
Operation
Maximum opportunity
Performance measures
Other benefits
To provide an income for retirement.
No special arrangements are made for Executive Directors, who are entitled to become members of the Group’s
defined contribution pension scheme, which is open to all UK employees, or the pension plan relevant to the
country where they are employed if different.
If the Executive Director so chooses, he/she may take some or all of the pension contribution as a cash
alternative, which will be the same percentage of salary as the pension contribution foregone.
The maximum pension contribution or allowance for Executive Directors will be in line with that available to UK
employees or to participants in the pension plan in the relevant country. For UK employees, this is currently five
per cent of salary.
N/A
Purpose and link to strategy
Operation
To provide a competitive level of employment benefits.
No special arrangements are generally made for Executive Directors.
Benefits currently include (but are not limited to):
• a car benefit appropriate for the role performed;
• participation in the Company’s private health and long-term sickness schemes;
• life insurance and income continuance schemes; and
• participation in all-employee share plans, on the same basis as other eligible employees.
If new benefits are introduced for a wider employee group, the Executive Directors shall be entitled to participate
on the same basis as other eligible employees.
If, in the opinion of the Committee, a Director must relocate to undertake and properly fulfil his/her executive
duties, relocation benefits may be provided, which may include a cash payment to cover reasonable expenses.
Reimbursed expenses may include a gross-up to reflect any tax due in respect of the reimbursement.
There is no maximum level of benefits provided to an individual Executive Director, as the cost of benefits is
dependent upon costs in the relevant market. Benefits will be set at levels which are competitive, but not excessive.
Participation by Executive Directors in any all-employee share plan operated by the Company, is limited to the
maximum award levels permitted by the plan rules from time to time and, in the case of any UK tax qualifying
plan, the limits prescribed by the relevant tax legislation.
N/A
Maximum opportunity
Performance measures
116 | Computacenter plc Annual Report and Accounts 2022
Governance Report
Chairman and Non-Executive
Director fees
Purpose and link to strategy
Operation
Maximum opportunity
Performance measures
Share ownership guidelines
for Executive Directors
Purpose and link to strategy
Operation
Maximum opportunity
Performance measures
To ensure that the Group is able to attract and retain experienced and skilled Non-Executive Directors.
Fee levels are determined with reference to the scope of responsibilities and the amount of time that is expected
to be devoted during the year and taking into account the fee levels paid by other companies of similar size and
complexity. No individual is involved in the process of setting his/her own remuneration.
Fee levels may be reviewed annually. They may also be increased on an ongoing or temporary or ad hoc basis,
to take into account changes in the working of the Board and/or changes in responsibilities.
The Chairman of the Board receives a fixed fee. Other Non-Executive Directors receive a basic fee and additional
fees are payable for the Chairmanship of the Board’s Committees and for the additional responsibility of being
the Senior Independent Director and may also be paid to other Non-Executive Directors to reflect additional time
commitments and responsibilities. Fees are normally paid in cash.
Travel expenses, hotel costs and other benefits related to the performance of the role, including any tax due,
are also paid where necessary.
Fees in respect of the year under review (and for the following year) are disclosed in the Annual Report
on Remuneration.
Non-Executive Directors do not participate in any of the Group’s incentive arrangements or share schemes and
are not eligible for pension or other benefits.
Maximum in line with the Company’s Articles of Association.
N/A
To strengthen alignment between Executives and shareholders.
Levels are set in relation to annual base salary, and are normally required to be built over a five-year period. The
Committee retains discretion to vary this period on an individual basis, if it believes that it is fair and reasonable
to do so.
Options which have vested unconditionally, but are as yet unexercised, and shares subject to deferred bonus
awards and PSP awards which are in the holding period but which are no longer subject to performance
conditions, will be included on a net of tax basis, for the purposes of calculating shareholdings, as will shares
held by an Executive’s spouse or dependents.
Post-cessation of employment, Executive Directors are also expected to remain aligned with the interests
of shareholders for an extended period after leaving the Company, other than in exceptional circumstances.
Details of the application of this policy are set out in the Annual Report on Remuneration.
The Committee will regularly review the shareholding guidelines. It has discretion to disapply or reduce the share
ownership guidelines in extenuating circumstances, for example in compassionate circumstances.
There is no maximum, but minimum levels have been set at 200 per cent of base salary for both the current CEO
and FD. Non-Executive Directors are not required to hold shares in the Company.
Executive Directors who have not yet met their shareholding requirement will normally be expected to retain at
least 50 per cent of any deferred bonus awards and PSP awards which vest (net of tax) until such time as this
level of holding is met.
N/A
Computacenter plc Annual Report and Accounts 2022 | 117
Directors’ Remuneration report continued
Malus and clawback
Malus and clawback provisions apply to the
annual bonus and Performance Share Plan.
For awards paid or granted in respect of 2020
onwards, the provisions are set out below.
Malus and/or clawback may apply to annual
bonus awards, including deferred awards for
a period of two years and to Performance
Share Plan awards in the period up to the fifth
anniversary of grant, in the event of:
• a material misstatement of results;
• gross or serious misconduct;
• an error or misstatement which has
resulted in a material overpayment to
the participants;
• a significant failure of risk management
within the Company or any Group Member;
• significant reputational damage to the
Company or any Group Member;
• the participant leaving in circumstances
which, had all the facts been known, would
have resulted in the award lapsing; or
• any other circumstances that the
Committee, in its discretion, considers to be
similar in nature or effect to those above.
The malus and clawback provisions that apply
to awards prior to the dates set out above are
in line with the relevant policy in force at the
time the awards were made.
Explanation of performance measures
The performance measures in respect of
variable remuneration included in the Policy
are based on a combination of financial and
strategic measures, with an emphasis on the
financial performance of the Group, and
therefore to the value that the business
delivers to its shareholders. The Company is
committed to long-term earnings per share
growth through increased profitability and
prudent use of cash generation, with a
Services-led strategy. This commitment is
reflected in the current measures used to
motivate and incentivise our management
team through the annual bonus and PSP.
The Committee may make changes to the
performance measures in future years to
align them with the business strategy at
that time.
The Committee usually reviews potential
performance criteria and targets for
the annual bonus and PSP annually, with
further detail set out in the Annual Report
on Remuneration.
Performance conditions applying to any
award may be amended or substituted by the
Committee if an event occurs which causes
the Committee to determine an amended or
substituted performance condition would be
more appropriate and not materially less
difficult to satisfy.
Remuneration arrangements across
the Group
When setting Executive remuneration,
consideration is given to pay policies and
employment conditions of employees of the
Company and elsewhere in the Group.
The remuneration of employees across the
Group is based on three fundamental
principles. First, that it allows the Group to
retain the level of talent necessary to
implement the strategy as set by the CEO and
Board. Second, that levels of remuneration
should be sufficient to achieve this aim, but
should never be higher than is necessary to do
so. Finally, with limited exceptions, the more
significant the ability of an employee to
influence the Company’s financial results
through their individual performance, the
higher the proportion of their remuneration
should be performance based.
The level and design of variable pay takes into
account the need to avoid incentivising the
Group’s employees to act in a manner that is
inconsistent with the Group’s risk appetite,
as set by the Board.
Consistent with the policy for Executive
Directors, where annual bonuses are in place
across the Group, they are currently linked to
business performance with a focus on
underlying Group or divisional profit and other
relevant metrics.
Whilst only Executive Directors and senior
executives participate in the PSP, other
employees can participate in the Company’s
all-employee share schemes which are
designed to incentivise participants to build
a shareholding in the Company, thus aligning
their interests with those of the Group’s
shareholders. This plan is not subject to
performance conditions, but requires the
employee to remain employed at the end
of the term of the scheme which they
have joined.
In line with local country practices, all
employees are encouraged to contribute
appropriate savings toward their retirement.
In the UK, the Company operates pension
arrangements within the Occupational and
Personal Pension Schemes (Automatic
Enrolment) Regulations 2010.
Whilst the Company does not feel it
appropriate to consult directly with
employees when drawing up the Directors’
Remuneration Policy, the Committee has
considered any feedback received via
employee engagement surveys and from the
regular meetings the CEO and Chief People
Officer conduct with employee representative
bodies in each of our major geographies.
118 | Computacenter plc Annual Report and Accounts 2022
The Remuneration Committee Chair, Ros
Rivaz, was appointed as the Designated
Non-Executive Director on 9 November 2017
to facilitate engagement with the wider
workforce, to assist the Board in
understanding the views of Computacenter’s
employees. This involves attending Works
Council meetings and other employee events,
and feeding back the views raised by
employees to the Board. These events have
provided a valuable opportunity for
employees to share their views freely on a
range of topics and Ros welcomed questions
on a broad range of topics including
remuneration. Further information on the
role and the activities of the Designated
Non-Executive Director is on page 71.
Statement of consideration of
shareholders’ views
The Remuneration Committee takes the
views of shareholders seriously when making
any changes to Executive remuneration
arrangements. It continues to welcome
shareholders’ views on Executive remuneration.
The Group consulted with its major
shareholders during the second half of 2022
on the proposed Policy and welcomed the
feedback received, which was supportive
of the Committee’s approach to this Policy.
Approach to recruitment remuneration
When hiring a new Executive Director or
promoting to the Board from within the Group,
the Committee will offer a package that is
sufficient to attract, retain and motivate the
right talent, whilst at all times aiming to pay
no more than is necessary.
Each component will be subject to the limits
as specified in the Policy table above, save
for amounts payable in respect of elements
forfeited on cessation with the Executive
Director’s former employer (set out below).
In determining an appropriate remuneration
package, the Committee will take into
consideration all relevant factors including,
but not limited to, the candidate’s location,
skills and experience, external market
influences and internal pay relativities.
Salary would be provided at such a level as
required to attract the most appropriate
candidate and may be set initially at below
market level, on the basis that it may progress
towards the market level once expertise and
performance have been proven and sustained.
Governance Report In order to facilitate recruitment, the
Committee may offer additional cash and/or
share-based elements in respect of any
incentive or deferred pay awards forfeited
by an Executive Director as a result of the
termination of their former position, including
utilising Listing Rule 9.4.2 if necessary. The
Committee would seek to ensure, where
possible, that these awards would be
consistent with awards forfeited in terms
of form of award, time horizons, value and
performance conditions. For an internal
Executive Director appointment, any variable
pay element awarded in respect of the prior
role may be allowed to pay out according to
its terms. In addition, any other ongoing
remuneration obligations existing prior to
appointment may continue. For external and
internal appointments, the Committee may
agree that certain incidental expenses will be
met as appropriate.
Where a newly appointed Executive Director is
required to relocate, the Group may pay the
costs of relocation including, but not limited
to, housing, travel, taxation advice, shipping
costs and education for dependents.
Additionally, any Executive Director based
outside of the UK will be eligible to participate
in insurance and other benefits, in line with
local practice. Other elements may be
included in the following circumstances: (i) an
interim appointment being made to fill an
Executive Director role on a short-term basis;
and (ii) if exceptional circumstances require
that the Chair or a Non-Executive Director
takes on an executive function on a short-
term basis.
Any awards made on recruitment may be
subject to such malus and clawback
provisions that the Remuneration Committee
deems to be appropriate.
Service contracts
The Directors’ service contracts and letters
of appointment are available for inspection at
our registered office during normal hours of
business and will also be available at our AGM
to be held on 17 May 2023. Details of the
duration of the Directors’ service contracts
are set out on page 130.
Executive Directors
The current Executive Directors each have
a service contract with the Company which
provides for a notice period of up to 12 months
from either party. It is intended that this policy
would also apply to new appointments of
Executive Directors.
With the consent of the Board, where an
appointment can enhance an individual
Executive Director’s experience and add value
to the Company, Executive Directors are able
to accept non-executive appointments
outside the Company. Retention of any fees
received by the Executive Director is at the
discretion of the Committee.
Non-Executive Directors
Non-Executive Directors are appointed
pursuant to a letter of appointment for an
initial period which is normally three years,
which may be subject to renewal thereafter.
Appointments may be terminated by either
the Company or the Non-Executive Director
usually giving three months’ notice. Save in
respect of retirement by rotation, a Non-
Executive Director being removed from office
may receive an amount equal to the fee
during any remaining notice period.
Loss of office payments
We are committed to ensuring a consistent
approach, so that we do not pay more than is
necessary in circumstances of loss of office.
In the event of an early termination of a
contract, the aim is to seek to minimise any
liability. If an Executive Director’s employment
is terminated, any compensation arrangements
will not normally exceed those set out in their
service contract and the rules of the relevant
incentive plans.
When managing such situations, the
Committee takes a range of factors into
account including, but not limited to,
contractual obligations, shareholder
interests, organisational stability and the
need to ensure an effective handover.
In the normal course of events, an Executive
Director will work their contractual notice
period and receive usual salary payments and
benefits during this time. In the event of a
termination where Computacenter requests
that the Executive Director ceases work
immediately, a payment in lieu of notice may
be made that is equal to fixed pay, pension
entitlements and other benefits. Payments
may be made on a phased basis and may be
subject to mitigation. Alternatively, an
Executive Director may be placed on garden
leave for the duration of some or all of their
notice period. Where an Executive Director
leaves during a financial year, an annual
bonus may be payable with respect to the
period of the financial year worked to the
extent that they are determined to be a good
leaver by the Committee, although it will be
pro-rated for time and normally paid at the
normal payment date(s).
In the event of termination for cause (e.g.
gross misconduct or negligence), neither
notice nor a payment in lieu of notice would be
given and the Executive Director would cease
to perform services immediately.
Any share-based entitlements granted to an
Executive Director under our share plans will
be determined based on the relevant plan
rules. The default treatment is that any
unvested awards lapse on cessation of
employment during the relevant performance
or deferral period. However, in certain
prescribed circumstances, such as ill-health,
injury, disability, redundancy, retirement (for
all Deferred Bonus Plan (DBP) awards and for
PSP awards made prior to March 2019), sale of
the employing company or business outside
the Group, or any other circumstances at the
discretion of the Committee, ‘good leaver’
status may be applied. For good leavers,
awards will normally vest on their normal
vesting date, and for awards made under the
PSP be subject to the satisfaction of the
relevant performance conditions at that time
and reduced pro-rata to reflect the proportion
of the performance period actually served.
The Committee may allow awards to vest at
the time of cessation on the basis outlined
above. PSP awards will typically remain
subject to the holding period and will be
released at the end of it, although the
Committee has discretion to release the
awards at the date of cessation or at some
other time after cessation but before the end
of the holding period.
PSP awards which are subject only to the
holding period following vesting will lapse in
the event of cessation of employment for
cause (e.g. gross misconduct or negligence).
In the event of the death of an Executive
Director, awards vest at cessation with no
performance assessment. In such
circumstances, unless the Committee
determines otherwise, awards will be reduced
pro-rata to reflect the proportion of the
performance period actually served.
In the event of a takeover or winding-up of
Computacenter which is not part of an
internal reorganisation of the Group, awards
may also vest to the extent determined by the
Committee, taking into account the period
that has elapsed since the awards were
granted, and the performance achieved
against any applicable performance targets.
Early vesting may also be permitted on the
same basis in the event of a demerger or
other transaction which, in the Committee’s
opinion, would affect the value of awards.
Share plan awards may be adjusted in the
event of any variation of the Company’s share
capital or any demerger, delisting, special
dividend or other event that may affect the
Company’s share price.
Computacenter plc Annual Report and Accounts 2022 | 119
Directors’ Remuneration report continued
The Committee may make minor amendments
to the Policy set out above for regulatory,
exchange control, tax or administrative
purposes, or to take account of a change in
legislation, without obtaining shareholder
approval for such amendments.
The charts on page 121 show the level of
remuneration that is projected to be received
by the Directors in accordance with the Policy
in 2023. The charts opposite show four
outcome scenarios: (a) Minimum receivable
pay; (b) Remuneration for performance in line
with expectations; (c) Maximum remuneration
achievable; and (d) Maximum remuneration
achievable with, in the case of the PSP, the
additional impact of share price appreciation
of 50 per cent over the three-year
performance period.
Where the Executive Director participates in
one or more of the Company’s all-employee
share schemes, awards may vest upon
termination or in the event of a takeover or
other relevant event, in accordance with
applicable scheme rules.
As is consistent with market practice, we may
pay a sum equivalent to any unused annual
leave and a contribution towards an Executive
Director’s legal fees for entering into a statutory
agreement and may pay a contribution towards
fees for outplacement services or repatriation,
as part of a negotiated settlement.
There are no agreements currently in place
between the Company and any of its Directors
providing for additional compensation for loss
of office or employment, other than as
disclosed in this report.
In any event, the Committee will not sanction
rewards for failure and will seek to mitigate
any termination payments where possible.
Exceptions to the Policy
The Policy, as set out in this report, comprises
the full suite of possible components for the
remuneration of Directors at Computacenter.
Notwithstanding the restrictions laid out in
the Policy, where the Company has made a
commitment to a Director which:
• was in accordance with the prevailing
remuneration policy at the time that the
commitment was made; and/or
• was made before the Director became
a Director and, in the opinion of the
Committee, the payment was not in
consideration for the individual becoming
a Director of Computacenter
the Company will continue to give effect to it,
even if it is inconsistent with the Remuneration
Policy of the Company which is in effect at
that time.
Earlier remuneration policies of the Company
will continue to apply in relation to awards
granted under any company PSP and options
granted under the Company’s all-employee
Sharesave Scheme, prior to the approval of
the Policy, as these may be granted under one
policy and vest or be exercised under a later
one. Details of these previous commitments
are included within previous Computacenter
Annual Reports which are available at
investors.computacenter.com
120 | Computacenter plc Annual Report and Accounts 2022
Governance Report Executive Director remuneration scenarios
CEO – Mike Norris
Total remuneration (£)
Incoming CFO – Christian Jehle
Total remuneration (£)
£’000
4,000
2,000
0
732
100%
Minimum
3,116
44%
33%
23%
1,924
35%
27%
38%
3,797
18%
36%
27%
19%
£’000
3,000
2,500
2,000
1,500
1,000
500
0
In line with
expectations
Maximum
Maximum and
Share Price
Growth (50%)
1,952
40%
35%
25%
1,221
32%
28%
40%
2,346
17%
34%
29%
21%
In line with
expectations
Maximum
Maximum and
Share Price
Growth (50%)
490
100%
Minimum
Total fixed
Annual Bonus
PSP
Share Price Growth
Total fixed
Annual Bonus
PSP
Share Price Growth
In developing the scenarios, the following assumptions have been made:
Minimum pay receivable
• Only total fixed pay is received (i.e. base salary, benefits and pension), and there is no vesting of any of Computacenter’s variable pay schemes;
• Salary is the salary that applies in 2023;
• Benefits reflect the actual 2022 benefits received by the Chief Executive Officer and Group Finance Director roles; and
• Pension is measured by applying a cash in lieu rate against salary in 2023.
In line with expectations
This is based on what an Executive Director would receive if performance was in line with the Company’s expectations, which would result in the
following scenario:
• Fixed pay is received;
• Annual bonus pays out at 50 per cent of total potential bonus award; and
• PSP award pays out at 50 per cent of maximum.
Maximum
This is based on what an Executive Director would receive assuming that the variable pay awards set out above pay out in full (i.e. a bonus of 150
per cent of base salary and a PSP award with a face value of 200 per cent of base salary for the CEO; and a bonus of 150 per cent of base salary
and a PSP award with a face value of 175 per cent of base salary for the incoming CFO).
Maximum with additional share price appreciation impact
This is based on the same assumptions as the ‘Maximum’ scenario, with the additional impact of share price appreciation of 50 per cent over the
three-year performance period applied to the PSP awards.
The impact of share price appreciation has not been taken into account in any of the other three scenarios.
Computacenter plc Annual Report and Accounts 2022 | 121
Directors’ Remuneration report continued
ANNUAL REPORT ON REMUNERATION
Responsibilities of the Remuneration
Committee
The key responsibilities of the Remuneration
Committee are to determine on behalf of
the Board:
• the Company’s general policy on Executive
remuneration; and
• the specific remuneration packages of the
Executive Directors, the Chair of the Board
and senior Executives of the Group
including, but not limited to, base salary,
pension, annual performance-related
bonuses and PSP awards.
The fees of the Non-Executive Directors are
determined by the Chair and the Executive
Directors. All Directors are subject to the
overriding principle that no person shall be
involved in the process of determining his or
her own remuneration.
The full responsibilities of the Committee
are contained within its Terms of Reference,
which are available on our website at
investors.computacenter.com.
Current members
1. Ros Rivaz
2. Peter Ryan
3. Pauline Campbell
4. René Carayol*
5. Ljiljana Mitic
Former member
6. Rene Haas**
Role
Senior Independent Director
Non-Executive Chair of the Board
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Attendance
record
6/6
6/6
6/6
1/1
6/6
2/5
René Carayol was appointed to the Board and the Committee on 1 November 2022.
*
** Rene Haas stepped down as a Non-Executive Director of the Company on 1 December 2022.
Membership and attendance
The Remuneration Committee is made up of
independent Non-Executive Directors and the
Chair of the Board, who was considered to be
independent on appointment. Details of the
membership of the Committee and
attendance of the members at Committee
meetings during the year, are provided above.
The CEO attends meetings by invitation, as
does the Chief People Officer. The Company
Secretary is the secretary to the Committee.
The principal advisor to the Committee is
Deloitte LLP (Deloitte), which was selected by
the Committee in September 2016 by way of
a tender process.
The total fees paid to Deloitte in relation to
advice to the Committee in 2022 were
£134,450. The Committee considers the
advice that it receives from Deloitte LLP to be
independent. During the year, Deloitte also
provided consulting, tax and share plan advice
to the Company. Deloitte is a founding
member of the Remuneration Consultants
Group and, as such, voluntarily adheres to its
Code of Conduct.
Directors’ information
The following pages illustrate how we have applied our Remuneration Policy during 2022, and describes all elements of remuneration received
by our Directors.
Audited information
The audited tables and related notes are identified within this report, using A key.
A
Single figure of total remuneration
The total amount paid by the Company to each of the Directors, in respect of the financial years ended 31 December 2022 and 2021, is set out in
the tables that follow.
Year ended 31 December 2022
Executive
Mike Norris
Tony Conophy
Non-Executive
Peter Ryan
Pauline Campbell
René Carayol4
Rene Haas5
Philip Hulme
Ljiljana Mitic
Peter Ogden
Ros Rivaz
Total (£’000)
Salary or fees
£’000
Benefits
£’000
Pension
£’000
650.0
381.2
220.0
76.4
9.6
52.8
52.4
57.6
52.4
76.4
1,628.8
16.51
17.01
–
–
–
–
–
–
–
–
33.5
28.4
16.6
–
–
–
–
–
–
–
–
45.0
Total
fixed pay
£’000
694.9
414.8
220.0
76.4
9.6
52.8
52.4
57.6
52.4
76.4
1,707.3
Annual bonus
£’000
PSP awards
£’000
Total
variable pay
£’000
271.5
123.2
–
–
–
–
–
–
–
–
394.7
2,155.22
1,221.82
–
–
–
–
–
–
–
–
3,377.0
2,426.7
1,345.0
–
–
–
–
–
–
–
–
3,771.7
Total
£’000
3,121.6
1,759.8
220.0
76.4
9.6
52.8
52.4
57.6
52.4
76.4
5,479.0
122 | Computacenter plc Annual Report and Accounts 2022
Governance Report Year ended 31 December 2021
Executive
Mike Norris
Tony Conophy
Non-Executive
Peter Ryan
Pauline Campbell3
Rene Haas
Philip Hulme
Ljiljana Mitic
Peter Ogden
Minnow Powell7
Ros Rivaz
Total (£’000)
Salary or fees
£’000
Benefits
£’000
Pension
£’000
573.0
371.2
214.2
25.8
56.1
51.0
56.1
51.0
55.8
74.5
1,528.7
8.11
16.21
–
–
–
–
–
–
–
–
24.3
25.2
16.3
–
–
–
–
–
–
–
–
41.5
Total
fixed pay
£’000
606.3
403.7
214.2
25.8
56.1
51.0
56.1
51.0
55.8
74.5
1,594.5
Annual bonus
£’000
PSP awards
£’000
Total
variable pay
£’000
825.1
441.7
2,653.16
1,504.66
3,478.2
1,946.3
–
–
–
–
–
–
–
–
1,266.8
–
–
–
–
–
–
–
–
4,157.7
–
–
–
–
–
–
–
–
5,424.5
Total
£’000
4,084.5
2,350.0
214.2
25.8
56.1
51.0
56.1
51.0
55.8
74.5
7,019.0
The benefits figure represents the taxable benefit arising from cash allowances paid in lieu of the provision of company car and other travel-related benefits.
1
2. This relates to the 2020 PSP awards that vested in March 2023 and which had a performance period of 1 January 2020 to 31 December 2022. The relevant performance criteria were fully
achieved and therefore 100 per cent of the award vested for each of the Executive Directors. This calculation is based upon the average value of a Computacenter plc share over the last
quarter of 2022 being £19.42. The PSP value attributable to share price growth since the awards were granted is £1,053,000 and £597,000 for the CEO and FD respectively. The Committee
did not exercise its discretion to change the value of awards vesting based on the share price appreciation or depreciation during the period.
3. Pauline Campbell was appointed to the Board on 16 August 2021, and assumed the Chair of the Audit Committee on 30 September 2021.
4. René Carayol was appointed to the Board on 1 November 2022.
5. Rene Haas stepped down from the Board on 1 December 2022.
6. The value of the 2019 PSP awards has been updated to reflect the actual share price at vesting on 21 March 2022 of £29.28.
7. Minnow Powell stepped down from the Board on 30 September 2021.
REMUNERATION PAID IN 2022: EXECUTIVE DIRECTORS
2022 base salary
The Company provides competitive salaries to reflect individual responsibilities, performance, skills and experience which supports the
recruitment and retention of executives of the calibre required to deliver the Group’s strategy. Following a consultation exercise with
shareholders, and as highlighted in last year’s Annual Report on Remuneration, the annual salary of the CEO was increased in 2022 to £650,000,
effective 1 January 2022. The salary of the FD was increased by 2.6 per cent to £381,200.
2022 annual bonus
The annual bonus incentivises the delivery of annual, short-term, stretching financial and non-financial objectives. The maximum bonus
opportunity in 2022 was 150 per cent of base salary for the CEO and 125 per cent of base salary for the FD. Half of the bonus will be deferred into
Computacenter shares, with half payable after one year and half payable after two years.
The 2022 annual bonus opportunity was driven by the financial performance of the business and individual targets for each Director. For the
year ended 31 December 2022, 80 per cent of this award was conditional on the achievement of criteria linked to the financial performance of
the Group. These targets were set by the Committee with reference to the Group’s strategic and financial plans, as approved by the Board.
The non-financial personal objectives set for the Executive Directors were based principally on delivery against the Group’s strategic priorities,
integration of acquisitions and certain people-related objectives, including progress on diversity and inclusion. The Committee is comfortable
with the level of pay-out under the personal objectives given the very strong individual and strategic performance during the year, further detail
of which is set out in the following table, and the fact that the profit threshold was exceeded in the year.
Supporting context for the 2022 annual bonus outcomes is provided in the Remuneration Committee Chair’s letter on page 110.
Computacenter plc Annual Report and Accounts 2022 | 123
Directors’ Remuneration report continued
A
The table below sets out details of the annual bonus criteria which applied for the Executive Directors for 2022 and the performance delivered:
Measure
Financial criteria
Profit before tax (£m)
Percentage payout
Services contribution growth
(£m)
Percentage payout
Cash balance (£m)
Percentage payout
Costs 2022 (%)
Percentage payout
Costs 2023 (%)
Percentage payout
Non-financial criteria
Personal objectives
Total
As a percentage
of maximum
bonus
opportunity
Performance required
Threshold
Target
Stretch
Maximum
Actual %
achieved
Payout £’000
CEO
FD
CEO
FD
50%
10%
10%
5%
5%
20%
100%
251.7
10%
324.3
5%
183.2
5%
36.5%
3%
37.0%
3%
0%
26%
259.6
20%
342.3
7.5%
213.7
7.5%
36.9%
4%
37.4%
4%
7.5%
50.5%
267.5
35%
360.3
10%
244.2
10%
37.2%
5%
37.8%
5%
15%
80%
280.9
50%
360.3
10%
244.2
10%
37.2%
5%
37.8%
5%
20%
100%
253.21
11.85%
315.9
0%
115.4
0%
35.1%2
0%
34.1%3
0%
115.5
56.5
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
16%
27.85%
14%
25.85%
156.0
271.5
66.7
123.2
1. Profit before tax represents Group adjusted1 profit before tax on a currency adjusted basis excluding the results of the entities acquired during the year which were not included
in the targets.
2. The measure represents the actual percentage of gross profit retained as adjusted1 operating profit, after costs, within the core UK, German and French geographies for 2022.
3. The measure represents the targeted percentage of gross profit to be retained as adjusted1 operating profit, after costs, within the core UK, German and French geographies for 2023,
in accordance with longer-term cost reduction and margin improvement objectives.
The personal objectives for the Executive Directors are subject to a profit performance underpin and are related to the following:
Objectives
Progress in the year
CEO
Continue to drive the agenda for
a diverse and inclusive workforce
Drive the next phase of integration of
recent acquisitions in North America,
and ensure that performance is in line
with Group expectations for the region
Increasing our competitiveness
in Services
Effective execution of the Information
Systems roadmap
Succession planning and
organisational design
Female representation in Group leadership has increased by 8.7 per cent since 2020. Over 37 per cent
of all external hires for manager roles and 57 per cent of our most senior leadership hires in 2022 have
been female. We are on track to meet our corporate objective of a 25 per cent female mix for our senior
leadership job levels across the Group and 30 per cent for our whole employee base.
We continue to implement other programmes which underpin our commitment to inclusion and
diversity across the Group, driven through our Employee Impact Groups and focusing on engagement,
education, career development and social outreach.
Computacenter has made good progress in implementing Group standards, policies and processes
including across HR, Finance and administration, and in creating a single strong North America
organisation from our recent acquisitions there. Progress against both objectives has been
underpinned by the development and delivery of supporting Information systems. Ongoing
programmes are in place to drive cultural alignment and embed Computacenter values. The 2022
financial performance for North America was in line with Group expectations.
The Group has continued its drive for competitive offerings to take to market that are relevant and
offer value to our customers, leveraging Professional Services engagements. The success rate for wins
and renewals improved year-on-year, and we continued to grow the percentage of services delivered
from offshore locations. There has been progress in the drive for service productivity using systems
and automation to improve service revenue per head.
Significant progress has been made against the systems roadmap for upgrades and changes to core
systems in 2022. These changes ensure that our systems and tools align to offer simplicity of use,
enhanced productivity and better customer outcomes in terms of effectiveness for technology
delivery, which will be key to our competitiveness over the next five years.
2022 was a year of material progress for the planning and execution of the succession plans for the
senior team, including the successful CFO appointment.
There has been continuing assessment of and adjustments to organisational design to optimise the
operating structure, utilising executive skills and capitalising on growth opportunities.
124 | Computacenter plc Annual Report and Accounts 2022
Governance Report Objectives
Progress in the year
FD
Continue to drive the agenda for a
diverse and inclusive workforce
Drive the next phase of Group ERP
systems in North America
Further develop climate change impact
initiatives and reporting, including
environmental impact for our
operations, facilities and vehicles
Ensure a focus on cash
Continue to optimise property space,
costs and improve utility in the world
of hybrid working
Succession planning, investor relations
strategy and organisational design
Female representation in Group leadership has increased by 8.7 per cent since 2020. Over 37 per cent
of all external hires for manager roles and 57 per cent of our most senior leadership hires in 2022 have
been female. We are on track to meet our corporate objective of a 25 per cent female mix for our senior
leadership job levels across the Group and 30 per cent for our whole employee base.
We continue to implement other programmes which underpin our commitment to inclusion and
diversity across the Group, driven through our Employee Impact Groups and focusing on engagement,
education, career development and social outreach.
Further progress has been made in implementing Group ERP systems across the North America business,
despite some delays caused by functionality and necessary enhancements identified during the year.
The North America systems roadmap continues to evolve and be delivered, to align to Group systems.
Submission to SBTi made for Scope 1,2 and 3 emissions. Improvement in the Group CDP score for 2022
against those achieved for 2021 and 2020. Computacenter became carbon neutral for Scope 1 and 2
emissions in 2022, and saw a further significant reduction in those emissions during the year. Further
detail can be found on pages 46 to 49.
Analysis has been undertaken to assess distributable reserves in all material entities. However, this has
been a challenging year due to inventory and debtor challenges.
Ongoing review of physical office space requirements which has resulted in office closures or space
reductions in a number of locations in the UK, US, Germany and France, in line with our location strategy.
Individual committee responsibilities and other responsibilities were effectively transitioned to other
Group Executive members.
Assistance in the successful appointment of the new CFO.
There has been an increase in reporting and information provision to the Group Executive members has
expanded, although this continues to be an area of focus.
Proposed new Group Auditor to be put forward for shareholder approval at the Company’s 2023 AGM,
following a comprehensive formal tender process.
PSP
PSP awards incentivise the achievement of long-term profitability and returns to shareholders, and growth of earnings in a suitable and
sustainable manner. The PSP awards granted to Executive Directors with a performance period ending on 31 December 2022 vested at 100 per
cent, pursuant to the 2020 PSP Scheme, as the relevant performance criteria were fully achieved. The vested awards are subject to a two-year
holding period before release to the Executive Directors.
Vesting of these awards to each Executive Director was dependent upon the achievement of the following performance measures over
a three-year period:
The compound annual growth rate of the Group’s adjusted1 diluted earnings per share (EPS) – 70 per cent weighting
Performance level*
Maximum (100 per cent vesting)
In line with expectations (50 per cent vesting)
Threshold (10 per cent vesting)
*
Vesting occurs on a straight-line basis in between these thresholds.
Adjusted1 diluted EPS growth CAGR
12.50%
8.33%
5.00%
The EPS number used for the base year of this award (i.e. EPS in 2019) is consistent with the EPS number that was used to calculate the vesting of
the 2017–2019 PSP. On this basis, the growth in adjusted1 diluted EPS during the period 1 January 2020 to 31 December 2022 was 22.42 per cent per
annum. This resulted in 100 per cent of this element vesting.
Services revenue growth – 30 per cent weighting (measured on a constant currency2 basis)
Performance level*
Maximum (100 per cent vesting)
In line with expectations (50 per cent vesting)
Threshold (10 per cent vesting)
*
Vesting occurs on a straight-line basis in between these thresholds.
Services revenue growth CAGR
7.5%
5.5%
3.5%
The Services revenue growth during the period 1 January 2020 to 31 December 2022 was 9.07 per cent per annum. This resulted in 100 per cent of
this element vesting. As set out in the Annual Statement from the Chair of the Remuneration Committee on page 110, the Committee considered
the PSP formulaic outturn in the context of wider Company performance and the wider stakeholder experience, and considers that the outcome
is a fair reflection of performance over the performance period.
Computacenter plc Annual Report and Accounts 2022 | 125
Directors’ Remuneration report continued
REMUNERATION AWARDS GRANTED IN 2022: EXECUTIVE DIRECTORS
A
Share scheme interests awarded during the year
The table below details awards made during 2022 under the PSP scheme. The performance conditions for these awards are set out in more detail
below. Any awards that vest will be subject to a two-year holding period.
CEO
FD
Scheme/type
of award
Number
of shares
Face value at
time of grant
PSP – nil
cost option
PSP – nil
cost option
39,368
£1,146,0001
22,315
£649,6001
Performance
conditions
applied
Compound growth of
Company EPS (70%)
Compound growth of
Services revenue (30%)
Compound growth of
Company EPS (70%)
Compound growth of
Services revenue (30%)
Amount vesting related to
threshold of performance
Threshold
performance
(% of face value)
10%
Maximum
performance
(% of face value)
100%
25%
10%
25%
100%
100%
100%
Performance
period set
Three financial years
from 1 January 2022
Three financial years
from 1 January 2022
1. This is based on the average mid-market share price of Computacenter plc on the three immediately preceding business days from grant, being £29.11.
Vesting of these awards to each Executive Director will be dependent upon achieving the performance measures over a three-year period,
as follows:
The compound annual growth rate of the Group’s adjusted1 diluted earnings per share (EPS) – 70 per cent weighting
Performance level*
Maximum (100 per cent vesting)
In line with expectations (50 per cent vesting)
Threshold (10 per cent vesting)
Adjusted1 diluted EPS growth CAGR
12.5%
8.33%
5.0%
*
Vesting occurs on a straight-line basis in between these thresholds. As disclosed last year, the base year of this award (i.e. EPS in 2021) will be consistent with the EPS number that
was used to calculate the vesting of PSP awards granted for the performance period 2019 – 2021. As disclosed in the 2021 Annual Report and Accounts, the Committee considered the
impact of one-off tax items and agreed that the disclosed unrepeatable nature of the tax benefit within the adjusted profit for the year had materially increased the adjusted diluted
EPS in 2021, and should therefore be excluded from the assessment of performance. The 2021 adjusted diluted EPS figure used as the base to measure growth for these awards was
160.9 pence per share.
The compound annual growth rate of the Group’s Services Revenue (GSR) (30 per cent weighting) measured on a constant currency2 basis
Performance level*
Maximum (100 per cent vesting)
In line with expectations (50 per cent vesting)
Threshold (10 per cent vesting)
*
Vesting occurs on a straight-line basis in between these thresholds.
Services revenue growth CAGR
7.5%
5.5%
3.5%
The table below details awards made during 2022 under the deferred bonus plan.
CEO
FD
Scheme/type of award
DBP2 – Conditional Share
Number of shares
14,172
Face value
£412,5601
DBP2 – Conditional Share
7,587
£220,8641
Vesting date
50% – 21 March 2023
50% – 21 March 2024
50% – 21 March 2023
50% – 21 March 2024
1. This is based on the average mid-market share price of Computacenter plc on the three immediately preceding business days from grant, being £29.11.
2. These are not subject to any other performance conditions.
126 | Computacenter plc Annual Report and Accounts 2022
Governance Report A
Executive Director outstanding share awards as at 31 December 2022
Directors’ interests in share schemes
Mike Norris
Tony Conophy
Schemes
Sharesave*
PSP
PSP
PSP
PSP
PSP
DBP
DBP
DBP
DBP
Sharesave*
PSP
PSP
PSP
PSP
PSP
PSP
DBP
DBP
DBP
DBP
Note
1
3
2,3
3
3
3
4
4
4
4
1
3
3
2,3
3
3
3
4
4
4
4
Exercise/share
price
1011.0p
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
1054.0p
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Exercise period
01/12/24 – 31/05/25
21/03/23 – 20/03/28
21/03/24 – 20/03/29
23/03/25 – 22/03/30
22/03/26 – 21/03/31
22/03/27 – 22/03/32
21/02/2022
21/03/2023
21/03/2023
21/03/2024
01/12/23 – 31/05/24
22/03/20 – 21/03/27
21/03/23 – 20/03/28
21/03/24 – 20/03/29
23/03/25 – 22/03/30
22/03/26 – 21/03/31
22/03/27 – 22/03/32
21/03/2022
21/03/2023
21/03/2023
21/03/2024
At
1 January 2022
2,967
62,147
90,604
110,977
51,678
0
23,785
7,752
–
–
2,846
65,260
35,217
51,384
62,915
29,287
–
12,202
3,933
–
–
Granted
during the
year
–
–
–
–
–
39,368
–
–
7,086
7,086
–
–
–
–
–
–
22,315
–
–
3,793
3,794
Exercised
during the
year
–
–
–
–
–
–
23,785
–
–
–
–
–
–
–
–
–
12,202
–
–
–
Lapsed
during the
year
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
At
31 December 2022
2,967
62,147
90,604
110,977
51,678
39,368
–
7,752
7,086
7,086
2,846
65,260
35,217
51,384
62,915
29,287
22,315
–
3,933
3,793
3,794
1.
Issued under the rules of the Computacenter 2018 Sharesave Plan, which is available to employees and full-time Executive Directors of the Computacenter Group. Eligible employees can
save between £5 and £500 a month to purchase options in shares in Computacenter plc at a price fixed at the beginning of the scheme term. There are no conditions relating to the
performance of the Company for this scheme.
2. These awards vested during the year at 100 per cent, with 0 per cent of the shares under award lapsing.
3.
Issued under the terms of the Computacenter Performance Share Plan 2005, as amended at the AGMs held on 19 May 2015,18 May 2018 and 19 May 2022.
(a) In respect of 70 per cent of the total award: 10 per cent of this portion of the award will vest if the compound annual EPS growth over the Performance Period equals five per cent per
annum. If the compound annual EPS growth rate over the Performance Period is between five per cent and 8.33 per cent, this portion of the award will vest on a straight-line basis up
to one-half. This portion of the award will vest in full if the compound annual EPS growth equals or exceeds 12.5 per cent per annum, with straight-line vesting between 50 per cent and
100 per cent.
(b) In respect of 30 per cent of the total award: the award will start to vest if the compound annual Services revenue growth rate over the Performance Period equals 3.5 per cent. If the
compound annual Services revenue growth rate over the Performance Period is 7.5 per cent, this portion of the award will vest in full. If the compound annual Services revenue growth
rate over the period is between 3.5 per cent and 7.5 per cent, then this portion of the award will vest on a straight-line basis between 25 per cent and 100 per cent.
PSP awards from 2018 onwards are subject to the two-year holding period.
4. Conditional shares issued under the terms of the Computacenter 2017 Deferred Bonus Plan. Awards vest in equal tranches on the first and second anniversary of the grant date.
* The Sharesave scheme only requires that an employee remains employed by the Group at the end of the term of the scheme. There are no performance conditions attached.
Director gains
PSP
Director
Mike Norris
Tony Conophy
Date of vesting
21/03/2022
21/03/2022
Scheme
PSP
PSP
Number of shares
90,604
51,384
Exercise price
Nil
Nil
Market price
at vesting
£29.282
£29.282
Notional gain made
£2,653,094
£1,504,642
The closing market price of ordinary shares at 31 December 2022 (being the last trading day of 2022) was £19.11 (31 December 2021: £29.10).
The highest price during the year was £29.78 and the lowest was £18.10.
Computacenter plc Annual Report and Accounts 2022 | 127
Directors’ Remuneration report continued
Minimum shareholding requirements
In accordance with the Group’s minimum shareholding guidelines, the Executive Directors are each required to build up a shareholding that is
equal to 200 per cent of their gross salary. It is also expected that the Executive Director will achieve these levels within five years of appointment.
For the purposes of these requirements, deferred bonuses, shares subjected to the holding period and options which have vested unconditionally,
but are as yet unexercised, will be included on a net basis, for the purposes of calculating shareholdings, as will shares held by an Executive’s
spouse or dependents. There is no requirement for the Non-Executive Directors of the Company to hold shares.
In addition, when an Executive Director steps down from the Board they will be expected to retain an interest in Computacenter shares based on
their in-employment share ownership guideline (or actual shareholding at the date of stepping down from the Board if lower) for a period of two
years. This policy will be supported by the use of nominee accounts.
The Committee has the discretion to disapply or reduce this requirement in extenuating circumstances, for example in compassionate circumstances.
Both Mike Norris and Tony Conophy substantially exceed their shareholding requirement.
A
Directors’ shareholdings
The beneficial interest of each of the Directors in the shares of the Company, as at 31 December 2022, is as follows:
Current Directors
Mike Norris
Tony Conophy
Peter Ryan
Pauline Campbell
René Carayol
Rene Haas
Philip Hulme
Ljiljana Mitic
Peter Ogden
Ros Rivaz
Number of shares in the
Company as at
31 December 2022
1,134,214
1,873,556
3,100
–
–
–
8,896,695
–
18,699,389
2,181
Percentage
of requirement
achieved
1,667%3
4,696%3
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Interests in shares
PSP
354,7742
266,3784
–
–
–
–
–
–
–
–
DBP
21,9241
11,5201
–
–
–
–
–
–
–
–
Total
1,513,879
2,154,300
3,100
–
–
–
8,896,695
–
18,699,389
2,181
SAYE
2,9671
2,8461
–
–
–
–
–
–
–
–
Note: There has been no grant of, or trading in, shares of the Company between 1 January 2023 and 19 March 2023.
1. There are no conditions relating to the performance of the Company or individual for the vesting of this scheme.
2. There are performance conditions for this scheme as set out within the table on page 127.
3. Based on the Company’s closing share price as at 31 December 2022, being £19.11, and the approved 2022 base salaries.
4.
Includes 65,260 options that have vested but remain unexercised at 31 December 2022.
Dilution limits
Computacenter uses a mixture of both new issue and market purchase shares to satisfy the vesting of awards made under its PSP, DBP and
Sharesave schemes. In line with best practice, the use of new or treasury shares to satisfy awards made under all share schemes is restricted to
10 per cent in any 10-year rolling period, with a further restriction for discretionary schemes of five per cent in the same period. The Company’s
current position against its dilution limit is under each of these thresholds. The Company regularly reviews its position against the dilution
guidelines and, should there be insufficient headroom within which to grant new awards which could be satisfied by issuing new shares, the
Company intends to continue its current practice of satisfying new awards with shares purchased on the market.
Payments to past Directors and payments for loss of office
There were no payments made to past Directors and no payments made for loss of office during the period.
Finance Director transition
Remuneration arrangements for the outgoing Finance Director
As previously announced and set out in the Remuneration Committee Chair’s letter, Tony Conophy will retire from his position as Group Finance
Director and as an Executive Director of Computacenter plc during 2023. He will step down from the Board with effect from 1 June 2023, and
remain with the Company for a further period of up to three months to ensure a comprehensive transition. Tony Conophy’s remuneration
arrangements will be treated in accordance with the Company’s approved Remuneration Policy and his service contract.
As a good leaver, Tony will be entitled to participate in the annual bonus in respect of the 2023 financial year of up to 125 per cent of salary,
pro-rated for time up to his retirement date and subject to deferral. As he will only be employed for part of the year, his bonus will be based on PBT,
on the same basis as the CEO, and personal objectives only. Retrospective disclosure will be provided in the 2023 Directors’ Remuneration Report.
128 | Computacenter plc Annual Report and Accounts 2022
Governance Report Tony will be treated as a good leaver for the purposes of his outstanding share awards. All deferred bonus shares will continue on their original
terms and be released on the normal vesting dates. All outstanding PSP awards in the holding period will continue on their original terms and time
horizons. All outstanding PSP awards (51,602 shares) in the performance period will be subject to the original performance conditions, will vest on
their normal vesting dates including any holding period and will be reduced pro-rata based on the period to when he retires from the Company.
Tony will not be granted a further PSP award in 2023.
Tony’s options held in the Company’s Sharesave scheme will be exercisable given that he will be automatically deemed to be a good leaver under
the terms of the scheme.
In line with our Policy, a post-employment shareholding guideline will apply for a period of two years from stepping down from the Board.
Remuneration arrangements for the incoming Chief Financial Officer
The Board was delighted to appoint Christian Jehle as CFO, effective 1 June 2023. Details of his remuneration package, which is in line with the
Directors’ Remuneration Policy, are set out below. Further context is provided in the Remuneration Committee Chair’s letter.
Salary and benefits
Christian’s salary has been set at £450,000, with a pension allowance of five per cent of salary, in line with the wider Computacenter workforce
in the UK. He will be eligible to receive benefits in line with our Policy, those of other employees, and will receive a company car allowance.
Annual bonus and PSP awards
Christian will be eligible to participate in the Company’s variable pay plans in line with our Remuneration Policy, with a maximum annual bonus
opportunity of 150 per cent of salary, half of which will be subject to deferral in line with our Policy. For 2023, the bonus opportunity will be
pro-rated for time in role during the year.
Christian will be eligible to participate in the PSP with awards being made at 175 per cent of salary. The first award to him will be made as soon
as practicable following appointment.
Share ownership
His share ownership requirement will be in line with the Company’s existing policy, requiring that he build up ownership of a shareholding that
is equal to 200 per cent of his salary. There will be a formal post-employment shareholding requirement for two years after stepping down from
the Board.
Replacement awards
As soon as practicable following appointment, Christian will be made cash and share awards to replace unvested awards which will be forfeited
as a consequence of his leaving his former employer (Experian) to join Computacenter. In determining the structure of these replacement
awards, the Committee took into account the form of award, time horizons and extent to which performance conditions applied to the original
awards. In summary, the replacement awards will comprise:
• An award to replace restricted shares which were granted by his former employer which were due to vest in June 2023. Taking into account
Christian’s start date, the Committee agreed to extend the time horizon of this award, with 50 per cent delivered in cash following his joining in
June, based on the value on the forfeited shares at that point, and 50 per cent converted into Computacenter shares which will remain subject
to a two-year holding period from 1 June 2023.
• An award to replace a 2022 performance share award which will also be forfeited. To ensure that Christian is incentivised against
Computacenter performance from joining, this award will be replaced by a PSP award which will be subject to the same Computacenter
performance measures and targets as apply to the 2022 award made to the CEO and will be released in June 2025, in line with the time horizon
of the forfeited award. The face value of the award will be equivalent to the value of the forfeited award, as measured at joining.
The Company will also compensate Christian for the annual bonus which would have been made by his former employer for the financial year
ending 31 March 2023. This will mirror the form of the forfeited award and be delivered in cash with a value of £262,500, which will be reduced by
any amount paid to the individual by his former employer. The value of this award takes into account current estimates of performance and is
lower than the bonus outturn in the prior two years.
Full details of his replacement awards will be set out in the 2023 Directors’ Remuneration report.
Executive service contracts
A summary of the Executive Directors’ contracts of employment is given in the table below:
Director
Mike Norris
Tony Conophy
Start date
23/04/1998
23/04/1998
Expiry date
n/a
n/a
Unexpired term
None specified
None specified
Notice period (months)
12
12
All Executive Directors have a rolling 12-month service contract with the Company, which is subject to 12 months’ written notice by either the
Company or the Director.
Computacenter plc Annual Report and Accounts 2022 | 129
Directors’ Remuneration report continued
External appointments for Executive Directors
Executive Directors are permitted to hold outside directorships, subject to approval by the Chair of the Board, and any such Executive Director
is permitted to retain any fees paid for such services. During 2022, neither Executive Director held any outside fee-paying directorships.
Non-Executive Directors’ letters of appointment
The Non-Executive Directors have not entered into service contracts with the Company. They each operate under a letter of appointment which
sets out their terms, duties and responsibilities. Non-Executive Directors are appointed for an initial term, which runs to the conclusion of the
third AGM following their appointment, and which may be renewed at that point. The letters of appointment provide that should a Non-Executive
Director not be re-elected at an AGM before he or she is due to retire, then his or her appointment will terminate. The Board has agreed that all
Directors will be subject to re-election at the AGM on 17 May 2023.
The terms and conditions of appointment of the Non-Executive Directors are available for inspection by shareholders at the Company’s registered
office. The appointments continue until the expiry dates set out below, unless terminated for cause or on the period of notice stated below:
Director
Peter Ryan
Pauline Campbell
René Carayol
Philip Hulme
Ljiljana Mitic
Peter Ogden
Ros Rivaz
Date of latest letter of appointment
16 May 2022
9 March 2021
1 November 2022
4 May 2022
16 May 2022
4 May 2022
11 November 2022
Expiry date
Close of the Company’s Annual General Meeting in 2025
Close of the Company’s Annual General Meeting in 2024
Close of the Company’s Annual General Meeting in 2025
Close of the Company’s Annual General Meeting in 2025
Close of the Company’s Annual General Meeting in 2025
Close of the Company’s Annual General Meeting in 2025
Close of the Company’s Annual General Meeting in 2025
Notice period
3 months
3 months
3 months
3 months
3 months
3 months
3 months
In 2023, the Chair will be paid a single consolidated fee of £230,600, an increase of 4.8 per cent on 2022 (below the average increase for the
wider workforce). The Non-Executive Directors are paid a basic fee, plus additional fees for chairing Board Committees or Senior Independent
Director duties.
In 2023, Non-Executive Directors’ annual fees will increase by 4.8 per cent on 2022:
Position
Independent Non-Executive Directors
Founder Non-Executive Directors
Additional fee for the Chairing the Audit Committee
Additional fee for the Chairing the Remuneration Committee
Additional fee for the position of Senior Independent Director
Performance of the Company
Total shareholder return performance
(Computacenter versus FTSE Software and Computer Services sector)
2022 Annual
fees (£)
57,600
52,370
18,850
10,480
8,370
2023 Annual
fees (£)
60,350
54,900
19,800
11,000
8,800
1,200
1,000
800
600
400
200
0
Dec
2012
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2020
Dec
2021
Dec
2022
Computacenter
FTSE All Share – Software and Computer Services
In this graph, TSR performance shows the value, in December 2022, of £100 invested in the Company’s shares in December 2012, assuming that all
dividends received between December 2012 and December 2022 were reinvested in the Company’s shares (source: Datastream).
130 | Computacenter plc Annual Report and Accounts 2022
Governance Report CEO pay history
The table below shows the total remuneration figure for the CEO over the previous 10 financial years. The total remuneration figure includes the
annual bonus and PSP awards which vested based on performance in those years. The annual bonus and PSP percentages show the payout for
each year as a percentage of the maximum.
CEO single figure
of remuneration (£)
Annual bonus payout (as a %
of maximum opportunity)
Annual bonus (£)
PSP vesting (as a % of
maximum opportunity)
PSP vesting (£)
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
937,300
1,506,300
2,763,900
1,807,600
2,291,500
2,081,700
2,391,409
2,538,817
4,084,506
3,121,548
61.2%
69.39%
84.54%
49.12%
92.35%
82.63%
92.5%
96.0%
96.0%
367,000
451,035
803,200
319,280
606,047
557,753
636,863
674,400
825,120
0%
35.34%
71.5%
85.13%
68.01%
65.68%
80.78%
70.00%
100%
27.85%
271,538
100%
–
478,679
1,384,500
891,800
1,101,400
923,699
1,150,120
1,398,898
2,653,094
2,155,173
Percentage change in remuneration of Board Directors and employees
The table below sets out the percentage change in the salary, benefits and annual bonus of all Executive and Non-Executive Directors compared
to the average amount paid to Computacenter employees in the UK, between the years ended 31 December 2020, 2021 and 2022.
% change in remuneration between 2019 and 2020 % change in remuneration between 2020 and 2021 % change in remuneration between 2021 and 2022
Salary/Fee
Benefits
Annual bonus
Salary/Fee
Benefits
Annual bonus
Salary/Fee
Benefits
Annual bonus
Executive
Mike Norris
Tony Conophy
Non-Executive
Peter Ryan
Pauline Campbell
René Carayol
Rene Haas
Philip Hulme
Ljiljana Mitic
Peter Ogden
Minnow Powell
Ros Rivaz
Employees
Computacenter
UK-based
employees11
(23.47)%1
(23.53)%1
(34.35)%
(5.99)%
5.89%
4.20%
35.94%1
35.97%1
(24.32)%11
2.52%
22.35%
27.73%
13.44%2
2.69%
103.70%11
4.94%
(67.09)%
(72.11)%
39.72%3
n/a4
n/a5
172.28%6
(75.0)%8
59.42%9
(75.0)%8
3.69%
3.69%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.0%
n/a4
n/a5
2.0%6
308.0%8
2.0%
308.0%8
(23.56)%10
2.05%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2.71%
195.89%4
n/a5
(5.88)%7
2.69%
2.67%
2.69%
n/a
2.69%
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3.26%
(10.39)%
(3.48)%
4.19%
(4.49)%13
(0.69)%13
5.81%12
(5.60)%
1.29%
1. The significant percentage increase for the CEO and Group FD reflects the voluntary temporary reduction in base salary for the period 1 April 2020 to 30 June 2020.
2. As disclosed last year, following shareholder consultation, the CEO salary was increased by 13.4 per cent.
3. Peter Ryan was appointed to the role of Chair on 16 May 2019. The increase reflects that he was only paid the Chair’s fee for part of the prior year.
4. Pauline Campbell was appointed to the Board on 16 August 2021 and assumed the role of Chair of the Audit Committee on 30 September 2021.
5. René Carayol was appointed to the Board on 1 November 2022.
6. Rene Haas was appointed to the Board on 20 August 2019.
7. Rene Haas stepped down from the Board on 1 December 2022.
8. The significant percentage increase for Philip Hulme and Peter Ogden reflects their decision to wave basic fees due to them as founder Non-Executive Directors from 1 April 2020 until
31 December 2020, as announced by the Company on 6 April 2020.
9. Ljiljana Mitic was appointed to the Board on 16 May 2019.
10. Minnow Powell stepped down from the Board on 30 September 2021.
11. The reduction in benefits in 2021 for the CEO was due to his election not to have a car and driver provided from the middle of 2021 onwards. The rise in his benefits in 2022 represents an
uplift through a car allowance, to offset his loss of car and driver, in line with that given to the Group Finance Director, for the whole of the year.
12. The average change in salary for UK-based employees takes account of promotions, pay reviews, changes in terms and conditions, and benchmark increases across the year, excluding
Executive and Non-Executive Directors who have been reported separately above. The increase also reflects an upwards adjustment considering the inflationary environment in the UK
in 2022.
13. The Computacenter UK-based employee benefits and annual bonus figures for last year have been updated from (4.71) per cent to (4.49) per cent for benefits and (0.70) per cent to (0.69
per cent) for the annual percentage change in remuneration between 2020 and 2021.
On the basis that Computacenter plc (the Parent Company) does not employ any employees, the comparator group of Computacenter UK-based
employees was chosen on a voluntary basis as the Committee believes it provides a sufficiently large comparator group based on a similar
incentive structure to the CEO and reduces any distortion arising from currency and cost of living differences in other geographies in which the
Group operates.
Computacenter plc Annual Report and Accounts 2022 | 131
Directors’ Remuneration report continued
CEO pay ratio
The CEO pay ratio table shows the ratio of pay between the CEO of Computacenter and Computacenter’s UK employees. The ratio compares the
total remuneration of the CEO against the total remuneration of the median UK employee and those who sit at the 25th and 75th percentiles
(lower and upper quartiles).
Computacenter’s CEO pay ratios have been calculated using Option B, a continuation of approach from the previous two years and based on the
availability of data at the time the Annual Report and Accounts is published. This uses the most recent gender pay data to identify the three
employees that represent our 25th, 50th and 75th percentile employees. As an additional sense check, the salary and total pay and benefits of a
number of employees either side of these 25th, 50th and 75th employees were also reviewed with an adjustment made to ensure that the figures
used were representative of an employee at these positions, including to exclude elements of pay which are not representative of employees at
the relevant level.
The total remuneration for these individuals has been calculated based on all components of pay for 2022, including base salary, performance-
based pay, pension and benefits. The Committee considers that this provides an outcome that is representative of the employees at these
pay levels.
Where an identified employee received a pro-rated component of pay, their figures have been converted to a full-year equivalent. No other
adjustments were necessary other than the adjustments already set out above.
The day by reference to which the Company determined the 25th, 50th and 75th percentile employees was 31 December 2022.
The Committee believes that the median pay ratio is consistent with the pay, reward and progression policies for the Company’s UK employees
taken as a whole. Computacenter’s employer pension contributions, Company-paid benefits and voluntary benefit scheme options are consistent
for all UK employees, including the CEO. In addition, the CEO is eligible to participate in the Company’s annual bonus and Performance Share Plan,
in line with other members of the senior Management team. The value of these variable pay awards is affected by performance delivered and,
in the case of the Performance Share Plan, share price movement over three years.
The 2022 CEO pay ratio is lower when compared to 2021. This is primarily a result of the CEO’s remuneration being heavily performance linked.
As set out earlier in the report, due to a lower bonus award in respect of 2022 and share price performance, the CEO’s 2022 total remuneration
is lower than the previous year.
Year
2022
20211
2020
2019
Method
Option B
Option B
Option B
Option B
25th percentile pay ratio
92:1
114:1
69:1
76:1
Median pay ratio
63:1
83:1
57:1
51:1
75th percentile pay ratio
42:1
55:1
34:1
36:1
1.
The 2021 ratios have been updated to reflect the actual CEO’s 2021 single figure total using the share price on the date of vesting, further detail of which is set out in the notes to the
single figure table on page 123.
2022 salary and total pay and benefits – all employee figures
Employees
Total pay and benefits
Salary
25th percentile
£33,965
£32,502
Median
£49,270
£46,924
75th percentile
£75,077
£66,816
Relative importance of spend on pay
The charts below show the relative expenditure of the Group on the pay of its employees, against certain other key financial indicators of the Group:
Expenditure on Group employees’ pay
Shareholder distributions
Group adjusted1 profit before tax*
2022
2021
£998.6m
£906.3m
2022
2021
£80.5m
£62.4m
2022
2021
£263.7m
£255.6m
*
As well as information prescribed by current remuneration reporting regulations, Group adjusted1 profit before tax has also been included as this is deemed to be a key performance
indicator of the Group which is linked to the delivery of value to our shareholders.
132 | Computacenter plc Annual Report and Accounts 2022
Governance Report Statement of implementation of Remuneration Policy in the following financial year
Executive Director Remuneration for 2023 will be in accordance with the terms of our Directors’ Remuneration Policy, as set out on pages 114 to
121 of this report.
2023 base salaries
The base salary of the CEO and the outgoing FD, Tony Conophy, will increase by around 4.8 per cent to £681,200 and £399,500 respectively from
1 January 2023. The rationale for the increase in base salary is described on page 111. As noted on page 129, the salary of the incoming CFO,
Christian Jehle, will be £450,000 effective from his appointment from 1 June 2023.
2023 annual bonus
The performance measures and weightings for the 2023 annual bonus will be as follows:
Mike Norris – CEO and Christian Jehle – CFO
(2023)
1
2
3
4
5
1. Group adjusted1 profit before tax (up to 50%)
2. Services contribution growth (up to 10%)
3. Cash balance (up to 10%)
4. Cost savings (up to 10%)
5. Personal objectives (up to 20%)
As Tony Conophy will only be employed for part of the year, his bonus will be based on PBT (up to 80 per cent of the award) and personal objectives only
(up to 20 per cent of the award).
The measures for 2023 have been set to be challenging relative to our 2023 business plan. The targets themselves, as they relate to the 2023 financial
year, are deemed by the Committee to be commercially sensitive and therefore have not been disclosed. They will be disclosed at such time as the
Committee no longer deems them to be commercially sensitive, and it currently anticipates including these in the Company’s 2023 Annual Report
and Accounts.
The maximum bonus opportunity for the Executive Directors in 2023 will be 150 per cent of base salary for the CEO and for the incoming CFO (pro-
rated for time). For the outgoing FD, the maximum bonus opportunity will be 125 per cent of base salary (pro-rated for time). These awards will be
subject to deferral in line with our Policy on page 115.
2023 PSP
The award levels for the Executive Directors in the 2023 financial year are 200 per cent of salary for the CEO and 175 per cent of salary for the
incoming CFO. The outgoing FD will not receive an award under the 2023 PSP.
The 2023 PSP awards will be subject to the same performance measures and targets as for the 2022 PSP awards as set out above. Awards will be
subject to a two-year holding period.
Statement of voting
The results of voting on the Directors’ Remuneration report at the Company’s 2022 AGM are outlined in the table below:
Votes cast in favour/discretionary
98.68%
97,654,952
Votes cast against
1,310,649
1.32%
Total votes cast
98,965,601
Votes withheld/abstentions
70,207
The results of voting on the Directors’ Remuneration Policy at the Company’s 2020 AGM are outlined in the table below:
Votes cast in favour/discretionary
98.65%
97,606,813
Votes cast against
1,339,845
1.35%
Total votes cast
98,946,658
Votes withheld/abstentions
2,153
The Committee is grateful for the continuing support of shareholders. To ensure that this continues, the Committee will consult with shareholders
on major issues where it is appropriate to do so. It will also continue to adhere to its underlying principle of decision making that Executive
Directors’ pay must be linked to performance and the sustainable delivery of value to our shareholders.
This Annual Report on Remuneration has been approved by the Board of Directors and signed on its behalf by:
Ros Rivaz
Chair of the Remuneration Committee
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 133
Directors’ report
The Directors present their report, together
with the audited accounts of Computacenter
plc and its subsidiary companies (the Group)
for the year ended 31 December 2022.
Computacenter plc is incorporated as a public
limited company and is registered in England
and Wales with the registered number
3110569. Computacenter plc’s registered
office address is Hatfield Avenue, Hatfield,
Hertfordshire, AL10 9TW. The Company’s
registrar is Equiniti Limited, which is situated
at Aspect House, Spencer Road, Lancing, West
Sussex, BN99 6DA.
The pages from the inside front cover to 81
of this Annual Report and Accounts are
incorporated by reference into the Directors’
Report, which has been drawn up and
presented in accordance with English
company law, and the liabilities of the
Directors in connection with that report shall
be subject to the limitations and restrictions
provided by such law.
Strategic Report
The Companies Act 2006 requires the Group to
prepare a Strategic Report, which commences
at the start of this Annual Report and Accounts
up to page 81. The Strategic Report includes
information about the Group’s operations and
business model, particulars of all important
events affecting the Company or its
subsidiaries, the Group’s financial
performance in the year and likely future
developments, strategic priorities, principal
risks and information regarding the Group’s
sustainability strategy.
Corporate governance
Under Disclosure and Transparency Rule 7.2,
the Company is required to include a
Corporate Governance report within the
Directors’ report.
Information on our corporate governance
practices can be found in the Corporate
Governance report on pages 83 to 138, and
the reports of the Audit, Remuneration and
Nomination Committees on pages 102, 110
and 98 respectively, all of which are
incorporated into the Directors’ report by
reference.
Management Report
This Directors’ report, together with the other
reports, forms the Management Report for
the purposes of Disclosure and Transparency
Rule 4.1.8.
Results and dividends
The Group’s Consolidated Income Statement is
on page 150. The Group’s activities resulted in
a profit before tax of £249.0 million (2021:
£248.0 million). The Group profit for the year,
attributable to equity shareholders, amounted
to £182.8 million (2021: £185.3 million).
The Directors recommend a final dividend
of 45.8 pence per share (2021: 49.4 pence
per share) totalling £52.3 million (2021:
£56.4 million). Subject to shareholder
approval, this will be paid on Friday 14 July
2023, to shareholders on the register at the
close of business on Friday 16 June 2023.
The shares will be marked ex-dividend on
Thursday 15 June 2023. This is in line with the
normal dividend procedure timetable, as set
by the London Stock Exchange.
Following the payment of an interim dividend
for 2022 of 22.1 pence per share on 28 October
2022, the total dividend for 2022 will be 67.9
pence per share. The Board has consistently
applied the Company’s dividend policy, which
states that the total dividend will be 2 to 2.5
times covered by adjusted1 diluted earnings
per share. Further detail on the Company’s
dividend policy can be found within the Group
Finance Director’s review on page 64.
Dividends are recognised in the accounts in
the year in which they are paid, or in the case
of a final dividend, when approved by the
shareholders. As such, the amount recognised
in the 2022 Annual Report and Accounts, as
described in note 14, is made up of the 2022
interim dividend (22.1 pence per share) and
the 2021 final dividend (49.4 pence per share).
Articles of Association
The Company’s Articles of Association set out
the procedures for governing the Company.
The Articles of Association may only be
amended by a special resolution at a general
meeting of the shareholders.
Voting rights
Shareholders are entitled to attend and vote
at any general meeting of the Company. It is
the Company’s practice to hold a poll on every
resolution at general meetings. Every member
present in person or by proxy has, upon a poll,
one vote for every share held. In the case of
joint holders of a share the vote of the senior
who tenders a vote, whether in person or by
proxy, shall be accepted to the exclusion of the
votes of the other joint holders and, for this
purpose, seniority shall be determined by the
order in which the names stand in the Register
of Members in respect of the joint holdings.
Dividend rights
Shareholders may by ordinary resolution
declare dividends, but the amount of the
dividend may not exceed the amount
recommended by the Board.
Transfer of shares
There are no specific restrictions on the size
of a holding, nor on the transfer of shares
which are both governed by the general
provisions of the Company’s Articles and
prevailing legislation. The Directors are not
aware of any agreements between holders of
the Company’s shares that may result in
restrictions on the transfer of securities or on
voting rights at any meeting of the Company.
A copy of the Articles of Association is
available on the Company’s website at
investors.computacenter.com.
Stakeholder engagement
The Board is aware that its actions and
decisions impact our stakeholders. Effective
engagement with stakeholders is important
for the Group. In order to comply with section
172 of the Companies Act 2006, each Director
is required to act in a way that he or she
considers will promote the success of the
Company whilst taking into account the
interests of stakeholders. The Directors must
also include a statement in the Annual Report
and Accounts explaining how they have
discharged this duty during the year. The
Group’s key stakeholders are identified on
pages 70 to 73 of the Strategic Report and the
statement of compliance with section 172 is
set out on page 69.
Directors and Directors’ authority
The Directors who served during the year
ended 31 December 2022 were Pauline
Campbell, Tony Conophy, René Carayol, Rene
Haas, Philip Hulme, Ljiljana Mitic, Mike Norris,
Peter Ogden, Ros Rivaz and Peter Ryan.
Biographical details of each Director, as at
31 December 2022, are given on pages 86
and 87.
The Company’s Articles of Association require
that at each AGM, those Directors who were
appointed since the last AGM retire, as well as
one-third of the Directors who have been the
longest serving. The Board has decided, in
accordance with the Code, that all Directors
will retire at each forthcoming AGM and offer
themselves for re-election. The Nomination
Committee has considered each Director who
is standing for election or re-election and
recommends their election or re-election.
Further details on the Committee’s
recommendations for the election and
re-election of the Directors are set out in the
Notice of AGM, which summarises the skills
and experience that the Directors bring to
the Board.
Subject to applicable law and the Company’s
Articles of Association, the Directors may
exercise all of the powers of the Company.
The Company’s Articles of Association provide
for a Board of Directors consisting of between
three and 20 Directors, who manage the
business and affairs of the Company.
The Directors may appoint additional or
replacement Directors, who shall serve until
the following AGM of the Company, at which
point they will be required to stand for election
by the members. A Director may be removed
from office by the Company as provided for by
applicable law, in certain circumstances set
out in the Company’s Articles of Association,
and at a general meeting of the Company by
the passing of an Ordinary Resolution
(provided special notice has been given in
accordance with the Companies Act 2006).
134 | Computacenter plc Annual Report and Accounts 2022
Governance Report Members have previously approved a
resolution to give the Directors authority to
allot shares, and a renewal of this authority
is proposed at the 2023 AGM. This authority
allows the Directors to allot shares up to the
maximum amount stated in the Notice of AGM
(approximately one-third of the issued share
capital). In addition, the Company may not
allot shares for cash (unless pursuant to an
employee share scheme) without first making
an offer to existing shareholders in proportion
to their existing holdings. This is known as
rights of pre-emption. Two resolutions
allowing a limited waiver of these rights were
passed by the members at last year’s AGM.
Members also approved a resolution giving
delegated authority allowing the Company to
make market purchases of its own shares, up
to a maximum of 10 per cent of the Company’s
issued share capital, subject to certain
conditions including price of purchase,
amongst others. Each of these standard
authorities will expire on the earlier of 30 June
2023 or the conclusion of the Company’s 2023
AGM. The Directors will seek to renew each of
the authorities at the 2023 AGM, and full
details are provided in the Notice of AGM. As at
28 February 2023, none of these authorities
approved by shareholders at the 2022 AGM
had been exercised.
Directors’ indemnities
The Company has executed deeds of indemnity
with each of the Directors. These deeds contain
qualifying third-party indemnity provisions,
indemnifying the Directors to the extent
permitted by law, and remain in force at the
date of this report, as well as for the duration
of 2022. The indemnities are uncapped and
cover all costs, charges, losses and liabilities
the Directors may incur to third parties, in the
course of acting as Directors of the Company
or its subsidiaries. In addition, the Group
maintains liability insurance for its Directors
and officers.
Directors’ conflicts of interest
The Directors are required to notify the
Company Secretary of any situations
(appointments, holdings or otherwise), or any
changes to such, which may give rise to an
actual or potential conflict of interest with
the Company. These notifications are then
reviewed by the Board and recorded in a
register maintained by the Company
Secretary. If appropriate, they are then
considered further by the Directors who are
not conflicted, who may authorise the
position. The register of notifications and
authorisations is reviewed by the Board twice
a year. Where the Board approves an actual
or potential conflict, the conflicted Director
cannot participate in any discussion or
decision affected by the conflict.
Directors’ interests in shares
The Directors’ interests in the Company’s share capital, at the start and end of the reporting period, were as follows:
Executive Directors
Mike Norris
Tony Conophy
Non-Executive Directors
Peter Ryan
Pauline Campbell
René Carayol*
Rene Haas*
Philip Hulme
Ljiljana Mitic
Peter Ogden
Ros Rivaz
As at 31 December 2022
As at 1 January 2022
or date of appointment
Number of
ordinary shares
Beneficial
Number of
ordinary shares
Non-beneficial
Number of
ordinary shares
Beneficial
Number of
ordinary shares
Non-beneficial
1,134,214
1,873,556
3100
–
–
–
8,896,695
–
18,699,389
2,181
–
–
1,134,214
1,873,556
–
–
–
–
–
–
9,498,293
–
8,103,356
–
900
–
–
–
9,196,695
–
18,699,389
1,382
–
–
–
–
9,198,293
–
8,103,356
–
*
René Carayol joined the Board on 1 November 2022 and Rene Haas retired from the Board on 1 December 2022. There were no changes to the interests set out above between 1 January
2023 and 24 March 2023.
Major interests in shares and voting rights
As at 31 December 2022, the Company had been notified under the FCA’s Disclosure and Transparency Rules of the following interests in its total
voting rights, which are equal to or greater than three per cent:
Name of major shareholder
JPMorgan Asset Management (UK) Limited
JPMorgan Asset Management (UK) Limited
Philip William Hulme
Percentage of total voting rights held
5.19
4.98
7.79
Date of notification
11 January 2022
9 May 2022
22 September 2022
Between 31 December 2022 and 24 March 2023, BlackRock, Inc. notified the Company on 8 February 2023 that its holding had increased to an
interest over 5.02 per cent of the Company’s total voting rights, as at the date of notification.
BlackRock, Inc. again notified the Company on 16 February 2023 that its holding had decreased to an interest over 4.98 per cent of the Company’s
total voting rights, as at the date of notification.
BlackRock, Inc. further notified the Company on 1 March 2023 that its holding had increased to an interest over 5.10 per cent of the Company’s
total voting rights, as at the date of notification.
An updated list of the Company’s major shareholders, based on information available to the Company, is available at
investors.computacenter.com.
Computacenter plc Annual Report and Accounts 2022 | 135
Directors’ report continued
Capital structure and rights attaching
to shares
As at 28 February 2023, there were
122,687,970 fully paid ordinary shares in issue,
of which the Company held 8,546,861 ordinary
shares in treasury, representing 6.97 per cent
of voting rights. The total number of voting
rights in the Company, which shareholders
may use as the denominator when calculating
if they are required to notify their interest in
the Company or a change to that interest,
under the Disclosure and Transparency Rules,
is therefore 114,141,109.
The rights attaching to each of the Company’s
ordinary shares and deferred shares are
set out in its Articles of Association. As at
28 February 2023, there were no deferred
shares in issue.
The holders of ordinary shares are entitled,
subject to applicable law and the Company’s
Articles of Association, to:
• have shareholder documents made
available to them, including notice of any
general meetings of the Company; and
• to attend, speak and exercise voting rights
at general meetings of the Company, either
in person or by proxy.
There are no specific restrictions on the
transfer of securities in the Company, which
is governed by its Articles of Association and
prevailing legislation. The Company is not
aware of any arrangements between
shareholders which may result in restrictions
on the transfer of securities or other
voting rights.
Pursuant to the Company’s share plans, there
is an employee benefit trust which, as at the
year end, held a total of 1,060,021 ordinary
shares of 7⁵⁄₉ pence each, representing
approximately 0.86 per cent of the issued
share capital. During the year, the trust
purchased a total of 1,300,000 shares, so it
could satisfy the maturities occurring
pursuant to these share option plans. When
the trust holds shares before transferring
them to participants, in line with good
practice, the Trustees do not exercise the
associated voting rights. The Trustees also
have a dividend waiver in place in respect of
shares which are the beneficial property of
the trust. During 2022, no ordinary shares in
the Company were issued for cash to satisfy
the exercise of options.
The employee share plans have change of
control provisions that would be triggered if
another entity or individual takes control of
the Company. Participants may, in certain
circumstances, be allowed to exchange their
existing options for options of an equivalent
value over shares in the acquiring company.
Alternatively, the options may vest early.
Early vesting under the executive schemes
will generally be on a time-apportioned basis.
Under the Sharesave scheme, employees will
only be able to exercise their options to the
extent that their accumulated savings allow
at that time.
During the period, no ordinary shares were
purchased for cancellation.
Significant agreements and relationships
Details regarding the status of the Group’s
various borrowing facilities are provided in
the Group Finance Director’s review on pages
65 to 66. These agreements each include a
change of control provision, which may result
in the facility being withdrawn or amended
upon a change of control of the Company. The
Group’s longer-term Services contracts may
also contain change of control clauses that
allow a counterparty to terminate the relevant
contract in the event of a change of control of
the Company.
The Company does not have any agreements
with any Director or employee that would
provide compensation for loss of office or
employment resulting from a change of
control on takeover, except in relation to the
Company’s share plans, as described above.
Financial instruments
The Group’s financial risk management
objectives and policies are discussed in the
Group Finance Director’s review on page 66.
Related-party transactions
Internal controls are in place to ensure that any
related-party transactions involving Directors
or their connected persons are carried out on
an arm’s length basis and are properly
recorded and disclosed where appropriate.
Employee share plans
The Company operates a Performance Share
Plan (PSP) to incentivise employees. During
the year, 275,665 ordinary options of 7⁵⁄₉
pence each were awarded subject to
performance conditions (2021: 361,350).
At the year end, 177,687 options remained
outstanding under the PSP (2021: 1,947,782).
During the year, 416,998 shares were
transferred to participants and 28,762
options lapsed. In addition, the Company
operates a Sharesave Plan for the benefit of
employees. As at the year end, 3,615,052
options granted under the Sharesave Plan
remained outstanding (2021: 3,496,799).
On 21 March 2022, in accordance with the
rules of the Computacenter 2017 Deferred
Bonus Plan, the Company granted 21,759
conditional awards of ordinary shares of
7⁵⁄₉ pence each (2021: 23,369).
Corporate sustainable development and
political donations
The Board recognises that acting in a socially
responsible way benefits the community, our
customers, shareholders, the environment
and employees alike. Further information can
be found in the report on pages 38 to 49,
which covers matters regarding health and
safety, equal opportunities, employee
involvement and employee development.
During the year, the Group did not make any
political donations or incur any political
expenditure within the meaning of sections
362 to 379 of the Companies Act 2006.
Equal opportunities
The Group acknowledges the importance of
equality and diversity and is committed to
equal opportunities throughout the
workplace. The Group’s policies for
recruitment, training, career development
and promotion of employees, are based purely
on the suitability of the employee and give
those who may be disabled equal treatment
to their able-bodied colleagues. Where an
employee becomes disabled after joining the
Group, all efforts are made to enable that
employee to continue in their current job.
However, if, due to the specific circumstances,
it is not possible for an employee to continue
in their current job, they will be given suitable
training for alternative employment within the
Group or elsewhere.
136 | Computacenter plc Annual Report and Accounts 2022
Governance Report The Group monitors and regularly reviews its
policies and practices to ensure that it meets
current legislative requirements, as well as its
own internal standards. The Group is
committed to making full use of the talents
and resources of all its employees and to
providing a healthy environment that
encourages productive and mutually
respectful working relationships. Policies
dealing with equal opportunities are in place
in all parts of the Group, which take account
of the Group’s overall commitment and also
address local regulatory requirements.
Employee involvement and development
The Group is committed to involving all
employees in significant business issues,
especially matters which affect their work
and working environment. A variety of
methods are used to engage with employees,
including team briefings, intranet, email and
in-house publications. The Group uses one or
more of these channels to brief employees on
the Group’s performance and the financial
and economic factors affecting it. Team
briefings are a primary method for engaging
and consulting with employees, with managers
tasked with ensuring regular information
sharing, discussion and feedback.
Employee consultative forums exist in each
Group country, to consult employees on major
issues affecting employment and matters of
policy, and to enable Management to seek
employees’ views on a wide range of business
matters. Where there are cross-jurisdictional
issues to discuss, a European forum is
engaged, made up of representatives from
each country forum. The Senior Independent
Director attends at least one meeting per year
of this European forum, to engage directly
with employee representatives and report
a summary of this engagement to the Board.
The Group regularly reviews employees’
performance through a formal review
process, to identify areas for development.
Managers are responsible for setting and
reviewing personal objectives, aligned to
corporate and functional goals. The Board
closely oversees and monitors Management
skills and the development of talent, to meet
the Group’s current and future needs. The
Board directly monitors and closely reviews
succession and plans for developing identified
key senior managers.
The development of employee skills and
careers, as well as the communication of the
Group’s goals, are driven by our Winning
Together processes and tools. Annual
assessments via our Winning Together
processes and tools are a formal requirement
of all managers.
The Group operates a Save As You Earn (SAYE)
share plan for eligible employees, including
those in the UK, who are encouraged to save
a fixed monthly sum for a period of either
three or five years. When the plan matures,
participants can purchase shares in the
Company at a price set at the start of the
savings period.
Further information can be found in the
report on pages 42 to 45 covering employee
involvement and employee development, and in
the Stakeholder Engagement section on page
71, which explains how the Company and Board
have engaged with and considered employees.
Engagement with suppliers, customers
and others
The required disclosure on engagement with
suppliers, customers, our people and other
stakeholders can be found in the Stakeholder
Engagement section on pages 70 to 73. Pages
94 to 95 includes detail of how the Board
considered the views and interests of our
stakeholders in its decision making.
Business ethics
The Group Ethics Policy commits employees to
the highest standards of ethical behaviour in
respect of customers, suppliers, colleagues
and other stakeholders in the business. The
policy includes a requirement for all employees
to report abuses or non-conformance with
the policy and sets out the procedures to
be followed.
Going concern
The Directors’ statement regarding adoption
of the going concern basis of accounting in
preparation of the annual Consolidated
Financial Statements is set out within the
Strategic Report on page 67.
Viability Statement
The Directors’ statement regarding the
long-term viability of the Company is set out
within the Strategic Report on pages 67 to 68.
Greenhouse gas emissions
The Company is required to state the annual
quantity of emissions in tonnes of carbon
dioxide equivalent from Group activities, and
to provide details of its energy usage and the
principal measures taken by the Company in
2022 to increase its energy efficiency. Details
can be found in the Strategic Report on pages
46 to 49. Further details of our environmental
policies and programmes can be found on our
corporate website at computacenter.com.
The Group’s disclosure in response to the Task
Force on Climate-related Financial Disclosures
can be found on pages 54 to 57. The Company
does not own, and does not pay for any of its
Directors to use private jets, including when
they are conducting Company business.
Auditor
A resolution to reappoint KPMG LLP as auditor
of the Group was approved by the Company’s
shareholders at the Company’s 2022 AGM.
Resolutions to appoint Grant Thornton UK LLP
as the auditor of the Group, as well as to
authorise the Directors to determine its
remuneration for fulfilling that role, will be put
to shareholders at the forthcoming 2023 AGM.
Disclosure of information to auditor
The Directors who held office as at the date of
approval of this Directors’ report confirm that,
so far as they are aware, there is no relevant
audit information of which the Company’s
auditor is unaware; and each Director has
taken all of the steps that he/she ought to have
taken as a Director to make himself/herself
aware of any relevant audit information and
to establish that the Company’s auditor is
aware of that information.
Annual General Meeting
The Board currently intends to hold the AGM on
17 May 2023 at 11.30am. The arrangements
for the Company’s 2023 AGM, and details of
the resolutions to be proposed, together
with explanatory notes, will be set out in the
Notice of AGM to be published on the
Company’s website.
Computacenter plc Annual Report and Accounts 2022 | 137
Directors’ report continued
Listing rule (LR) disclosures
The information required to be disclosed by LR 9.8.4R is set out below, along with cross references indicating where the relevant information
is otherwise set out in the Annual Report and Accounts:
Interest capitalised
Publication of unaudited financial information
Details of performance share plans
Waiver of emoluments by a Director
Waiver of future emoluments by a Director
Non pre-emptive issues of equity for cash
Non pre-emptive issues of equity for cash in relation to major
subsidiary undertakings
Contracts of significance
Provision of services by a controlling shareholder
Shareholder waiver of dividends
Shareholder waiver of future dividends
Agreements with controlling shareholder
MJ Norris
Chief Executive Officer
6 April 2023
FA Conophy
Group Finance Director
6 April 2023
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Details of significant contracts are set out in the Group Finance Director’s
review on pages 65 to 67. Details of transactions with related parties are
set out on page 202 in note 34 to the Consolidated Financial Statements.
N/A
The Trustees of the Company’s employee share schemes have a dividend
waiver in place in respect of shares which are the beneficial property of
each of the trusts.
The Trustees of the Company’s employee share schemes have a dividend
waiver in place in respect of shares which are the beneficial property of
each of the trusts.
Any person who exercises or controls on their own or together with any
person with whom they are acting in concert, 30 per cent or more of the
votes able to be cast on all or substantially all matters at general
meetings are known as ‘controlling shareholders’. The Financial Conduct
Authority’s Listing Rules now require companies with controlling
shareholders to enter into a written and legally binding agreement
(a Relationship Agreement) which is intended to ensure that the
controlling shareholder complies with certain ‘independence-related’
provisions. The Company confirms that it has undertaken a process
following the reporting period to review whether it has any ‘controlling
shareholders’. Following this process, it was determined that there was
no requirement on the Company to enter into a Relationship Agreement
with any of its shareholders. The Company confirms that this remained
the case as at 31 December 2022, but will keep the matter under review.
138 | Computacenter plc Annual Report and Accounts 2022
Governance Report
Directors’ Responsibilities
DIRECTORS’ RESPONSIBILITIES
Statement of Directors’ Responsibilities
in respect of the Annual Report and the
Financial Statements
The Directors are responsible for preparing
the Annual Report and the Group and Parent
Company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to
prepare Group and Parent Company financial
statements for each financial year. Under that
law they are required to prepare the Group
financial statements in accordance with
UK-adopted international accounting
standards and applicable law and have elected
to prepare the Parent Company financial
statements in accordance with UK accounting
standards and applicable law, including FRS 101
Reduced Disclosure Framework.
Under company law the directors must not
approve the financial statements unless they
are satisfied that they give a true and fair view
of the state of affairs of the Group and Parent
Company and of the Group’s profit or loss for
that period. In preparing each of the Group
and parent Company financial statements,
the Directors are required to:
• select suitable accounting policies and then
apply them consistently;
• make judgements and estimates that are
reasonable, relevant and reliable;
• for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted international
accounting standards;
• for the parent Company financial
statements, state whether applicable UK
accounting standards have been followed,
subject to any material departures
disclosed and explained in the parent
Company financial statements;
• assess the Group and Parent Company’s
ability to continue as a going concern,
disclosing, as applicable, matters related
to going concern; and
• use the going concern basis of accounting
unless they either intend to liquidate the
Group or the parent Company or to cease
operations, or have no realistic alternative
but to do so.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Parent
Company’s transactions and disclose with
reasonable accuracy at any time the financial
position of the Parent Company and enable
them to ensure that its financial statements
comply with the Companies Act 2006. They are
responsible for such internal control as they
determine is necessary to enable the
preparation of financial statements that are
free from material misstatement, whether
due to fraud or error, and have general
responsibility for taking such steps as are
reasonably open to them to safeguard the
assets of the Group and to prevent and detect
fraud and other irregularities.
Under applicable law and regulations, the
directors are also responsible for preparing a
Strategic Report, Directors’ report, Directors’
Remuneration report and Corporate
Governance Statement that complies with
that law and those regulations.
The Directors are responsible for the
maintenance and integrity of the corporate
and financial information included on the
company’s website. Legislation in the UK
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
Responsibility statement of the Directors in
respect of the Annual Report and Accounts
We confirm that to the best of our knowledge:
• the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
view of the assets, liabilities, financial
position and profit or loss of the Company
and the undertakings included in the
consolidation taken as a whole; and
• the Strategic Report and Directors’ report
include a fair review of the development
and performance of the business and the
position of the issuer and the undertakings
included in the consolidation taken as
a whole, together with a description of
the principal risks and uncertainties that
they face.
We consider the annual report and accounts,
taken as a whole, is fair, balanced and
understandable and provides the information
necessary for shareholders to assess the
Group’s position and performance, business
model and strategy.
The Annual Report from inside front cover
to page 139 was approved by the Board of
Directors and authorised for issue on 6 April
2023 and signed for and on behalf of the
Board by:
MJ Norris
Chief Executive
Officer
FA Conophy
Group Finance
Director
Computacenter plc Annual Report and Accounts 2022 | 139
Financial Statements
FINANCIAL
STATEMENTS
Contents
141
150
151
152
153
154
155
203
204
205
210
210
211
212
Independent Auditor’s report to the
members of Computacenter plc
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
Statements
Group five-year financial review
Financial calendar
Corporate information
Principal offices
140 | Computacenter plc Annual Report and Accounts 2022
Independent Auditor’s Report
to the members of Computacenter plc
1. Our opinion is unmodified
We have audited the financial statements of Computacenter plc (“the Company”) for the year ended 31 December 2022 which comprise the
Consolidated income statement, Consolidated statement of Comprehensive income, Consolidated balance sheet, Consolidated statement of
changes in equity, Consolidated cash flow statement, Company balance sheet and Company statement of changes in equity, and the related
notes, including the accounting policies in note 2.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 December 2022 and of
the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly prepared in accordance with UK accounting standards, including FRS 101
Reduced Disclosure Framework; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 19 May 2015. The period of total uninterrupted engagement is for the eight financial
years ended 31 December 2022. We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance with,
UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality: Group financial statements as a whole
Coverage
Key audit matters
Recurring risks
Event driven
£12.0 million (2021: £12.0 million)
4.8% (2021: 4.8%) of profit before tax
94% (2021: 96% of group profit before tax
vs 2021
< >
< >
Revenue – Technology Sourcing Bill and Hold revenue cut-off
New: Revenue – Technology Sourcing non-Bill and Hold revenue cut-off
Recoverability of Parent Company’s investment in subsidiaries (Parent)
New: Transitional application of agent vs. principal in Computacenter United
States Inc.
2. Key audit matters: our assessment of risks of material misstatement
When planning our audit we made an assessment of the relative significance of the key risks of material misstatement to the Group financial
statements initially without taking account of the effectiveness of controls implemented by the Group. As part of our audit planning procedures,
we presented and discussed our initial assessment of key risks to the Audit Committee and subsequently discussed changes to our assessment.
Our final risk map is shown below. We identified four key audit matters that were expected to have the greatest effect on our audit. Throughout
our audit we continually reassess the significance of each of these key audit matters. Key audit matters are those matters that, in our
professional judgement, were of most significance in the audit of the financial statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by us, including those which had the greatest effect on: the overall audit strategy;
the allocation of resources in the audit; and directing the efforts of the engagement team. We summarise below the key audit matters, in
decreasing order of audit significance, in arriving at our audit opinion above together with our key audit procedures to address those matters and
our findings from those procedures in order that the Company’s members as a body may better understand the process by which we arrived at
our audit opinion. These matters were addressed, and our findings are based on procedures undertaken, in the context of, and solely for the
purpose of, our audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion,
and we do not provide a separate opinion on these matters.
Computacenter plc Annual Report and Accounts 2022 | 141
Independent Auditor’s Reports continued
to the members of Computacenter plc
2. Key audit matters: our assessment of risks of material misstatement continued
Recoverability of Parent
Company’s investment in
subsidiaries (Parent)
Professional Services and
Managed Services contracts
(including inflation risk)
Change in accounting
policy in respect of
agent vs. principal
Fraud risk from Management
override of controls
Technology Sourcing
non-bill and hold
cut-off
Technology Sourcing
bill and hold revenue
recognition
Presentation
of alternative
performance measures
Transitional application of
agent vs. principal in
Computacenter US Inc.
Tax positions and
transfer pricing
Going Concern
Intangible assets useful
economic lives
BITS purchase
price allocation
r
e
h
g
H
i
t
c
a
p
m
i
l
a
i
t
n
e
t
o
p
f
o
e
d
u
t
i
n
g
a
M
r
e
w
o
L
Lower
Likelihood of occurrence
Higher
Key audit matter
Presumed fraud risk per auditing standards
Other financial statement risk
Key audit matter and presumed fraud risk per auditing standards
Key audit matter and other financial statement risk
Our response
Our procedures included:
• Tests of detail: A sample of sales was selected on the basis of a risk-based
sampling methodology combined with a statistical sample. For each invoice
sampled, we inspected bill and hold agreements, evaluated the segregation
and readiness of inventory, and considered if the reason for the arrangement
was substantive, in order to assess whether revenue had been recognised in
the appropriate period.
We performed the tests above rather than seeking to rely on any of the Group’s
controls because the nature of the balance meant that detailed testing is
inherently the most effective means of obtaining audit evidence.
Our findings
In determining the treatment of Technology Sourcing bill and hold revenue
cut-off there is room for judgement. For one transaction we found that the
Group misinterpreted contractual terms and recognised revenue earlier than
transfer of control had passed, which was then subsequently adjusted, following
which the judgement was balanced (2021: balanced).
Revenue – Technology
Sourcing Bill and Hold
revenue cut-off
(£386.9 million;
2021: £281.9 million)
Refer to page 104(Audit
Committee Report), page
165 (accounting policy and
critical judgement) and page
165 (financial disclosures).
The risk
2022/2023 sales:
Technology Sourcing
revenue includes revenues
from bill and hold
transactions. This is an
arrangement in which the
Group invoices a customer
and recognises the
associated revenue, but
retains physical possession
of the product until it is
transferred to the customer
at a point in time in the
future.
A customer may have
obtained control of a
product before it has been
delivered and management
regard there to be a critical
judgement required to
determine if all of the
criteria have been met to
recognise a bill and hold
sale. This gives rise to a risk
that bill and hold revenue is
recognised too early.
142 | Computacenter plc Annual Report and Accounts 2022
Financial Statements
Revenue – Technology
Sourcing non-Bill and Hold
revenue cut-off
Included within Technology
Sourcing revenue: £4,899.9m
(2021: not applicable)
Refer to page 104 (Audit
Committee Report), page
156 (accounting policy) and
pages 168 to 169 (financial
disclosures).
Recoverability of Parent
Company’s investment in
subsidiaries
(£475.0 million;
2021: £443.0 million)
Refer to page 105 (Audit
Committee Report), page
206 (accounting policy) and
page 208 (financial
disclosures).
The risk
2022/2023 sales:
Technology Sourcing
revenue includes revenues
from numerous product
groups each sold with
varying contractual terms
and conditions that in turn
impact the point in time at
which all delivery
obligations, and therefore
the transfer of control has
been fulfilled, and hence
revenue is recognised.
Whilst there is little
judgement required in
identifying the appropriate
accounting policy to apply,
the volume of orders close to
year end gives rise to a risk
that revenue is recognised
too early.
Low risk, high value:
The carrying amount of the
Parent Company’s
investments in subsidiaries
represents 95.6% (2021:
93.8%) of the Company’s
total assets. Their
recoverability is not at a high
risk of significant
misstatement or subject to
significant judgement.
However, due to their
materiality in the context of
the Parent Company
financial statements, this is
considered to be the area
that had the greatest effect
on our overall Parent
Company audit.
Our response
Our procedures included:
• Tests of detail: Inspecting proof of delivery for a sample of orders selected
close to year end in order to assess whether the accounting policy had been
correctly applied to recognise revenue in the appropriate period. This sample
was selected on the basis of a statistical sample methodology.
• Tests of detail: Inspecting credit notes raised subsequent to the year end in
order to assess whether Technology Sourcing non-Bill and Hold revenue related
to a valid sale and was recognised in the correct period, and whether there were
any systemic issues around revenue cut-off.
We performed the detailed tests above rather than seeking to rely on any of the
Group’s controls because our knowledge of the design of these controls
indicated that we would be unlikely to obtain the required evidence to support
reliance on controls.
Our findings
Our testing identified two errors, which were corrected, and uncorrected errors
for which we have reported an audit misstatement in respect of non-Bill and Hold
technology sourcing revenue.
Our procedures included:
• Tests of detail: We assessed management’s analysis by comparing the
carrying amount of a sample of the highest value investments, representing
99.7% (2021: 99.6%) of the total investment balance, to the relevant
subsidiaries’ draft balance sheets to identify whether their net assets, being
an approximation of their minimum recoverable amount, were in excess of
their carrying amount and assessing whether those subsidiaries have
historically been profit-making.
• Assessing subsidiary audits: We assessed the work performed by component
audit teams of those subsidiaries sampled where full-scope audits are
performed for the purposes of this group audit, and considered the results of
that work on those subsidiaries’ profits and net assets.
• Our sector experience: For the investments where the carrying amount
exceeded the net asset value, we compared the carrying amount of the
investment with the expected value of the business based upon a discounted
cash flow model.
We performed the tests above rather than seeking to rely on any of the Group’s
controls because the nature of the balance meant that detailed testing is
inherently the most effective means of obtaining audit evidence.
Our findings
We found the Group’s assessment of the recoverability of the investment in
subsidiaries to be balanced (2021: balanced).
Computacenter plc Annual Report and Accounts 2022 | 143
Independent Auditor’s Reports continued
to the members of Computacenter plc
2. Key audit matters: our assessment of risks of material misstatement continued
Our response
Our procedures included:
• Tests of detail: A sample of cost of sales transactions was selected on the
basis of a statistical sample from the current and prior period, and supporting
source documentation, such as purchase invoices, was obtained to validate
the product categorisation of the item sold.
• Recalculation: The adjustment prepared by management was recalculated by
checking all relevant product types had been correctly included in the
adjustment; to ensure mathematical accuracy.
We performed the tests above rather than seeking to rely on any of the Group’s
controls because the nature of the balance meant that detailed testing is
inherently the most effective means of obtaining audit evidence.
Our findings
We found no errors in the Group’s application of the revised revenue accounting
policy to the sales of Computacenter United States Inc.
Transitional application
of agent vs. principal in
Computacenter United
States Inc.
Included within the principal
element on agency
contracts: £1,889.0m (2021:
not applicable)
Refer to page 103 (Audit
Committee Report), pages
164 to 165 (accounting
policy) and pages 164 to 165
(financial disclosures).
The risk
Accounting application:
In May 2022, the
International Financial
Reporting In ter pre ta tions
Committee (“IFRIC”) reached
an agenda decision relevant
to the application of IFRS 15’s
principal vs. agent
considerations for software
license reselling. The
publication outlined the
IFRIC’s view on a specific fact
pattern presented to them,
that may inform and/or alter
management’s judgements
made when applying IFRS
15’s agency considerations.
Management adopted a
revised group revenue policy
as a result of the IFRIC
agenda decision, that has
been applied retrospectively
from 1 January 2021.
Computacenter United
States Inc migrated to the
Group ERP system on 1
September 2021, and prior to
this, the legacy ERP system
was not designed to produce
the analysis to identify
software and resold
services product sales, that
are now recognised on an
agent basis, to the degree of
precision required to apply
the new accounting policy
and led to our qualified
review opinion for the period
ended 30 June 2022. In
addition, limited data
migration issues were
identified that also impacted
the calculation of the
adjustment post-migration
and during 2022.
The imprecision of data and
data migration issues led to
significant effort by both
management and us to
interrogate and audit the
data, which gives rise to a
risk that the new accounting
policy is not applied to all
relevant sales and cost of
sales in Computacenter
United States Inc.
144 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 3. Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £12.0m (2021: £12.0m), determined with reference to a benchmark of Group
profit before tax of £249.0m (2021: £248.0m), of which it represents 4.8% (2021: 4.8%).
In addition, we applied materiality of £0.1m (2021: £0.1m) to related party transactions for which we believe misstatements of lesser amounts
than materiality for the financial statements as a whole could be reasonably expected to influence the company’s members’ assessment of the
financial performance of the Group.
Materiality for the Parent Company financial statements as a whole was set at £2.5m (2021: £2.5m), determined with reference to a benchmark of
Company total assets, of which it represents 0.5% (2021: 0.5%).
In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in individual account
balances add up to a material amount across the financial statements as a whole.
Performance materiality was set at 65% (2021: 75%) of materiality for the Group and Parent Company financial statements as a whole, which
equates to £7.8m (2021: £9.0m) for the Group and £1.6m (2021: £1.8m) for the Parent company. We applied this percentage in our determination of
performance materiality based on the level of identified misstatements and severity of control deficiencies during the prior period.
Group profit before tax
Group profit before tax of £249.0 million
(2021: £248.0 million)
Profit before tax
Group materiality
Group materiality
£12.0 million (2021: £12.0 million)
Whole financial statements materiality
£7.8 million (2021: £9.0 million)
Whole financial statements performance materiality
£6.0 million (2021: £2.5 million to £8.0 million)
Range of materiality at six components
(£1.5 million-£6.0 million)
£0.6 million (2021: £0.6 million)
Misstatements reported to the Audit Committee
We agreed to report to the Audit Committee any corrected or uncorrected identified misstatements exceeding £0.6m (2021: £0.6m), in addition to
other identified misstatements that warranted reporting on qualitative grounds.
Of the Group’s 35 (2021: 25) reporting components, we subjected five (2021: six) to full scope audits for Group purposes and one (2021: nil) to
specified risk-focused audit procedures over cash and cash equivalents, provisions, and the application of the revised agent vs principal revenue
policy. The latter was not individually financially significant enough to require a full scope audit for group purposes, but did present specific
individual risks that needed to be addressed. The components within the scope of our work accounted for the percentages illustrated opposite.
For the residual components, we performed analysis at an aggregated Group level to re-examine our assessment that there were no significant
risks of material misstatement within these.
The Group team instructed component auditors as to the significant areas to be covered, including the relevant risks detailed above and the
information to be reported back. The Group team approved the component’s materiality’s, which ranged from £1.5m to £6.0m (2021: £2.5m to
£8.0m), having regard to the mix of size and risk profile of the Group across the components. The work on four of the six components (2021: four of
the six components) was performed by component auditors and the rest, including the audit of the Parent Company, was performed by the Group
team.
The scope of the audit work performed was predominately substantive as we placed limited reliance upon the Group’s internal control over
financial reporting.
The Group audit team visited three (2021: nil) component locations in Germany, Canada and the United States. Video and telephone conference
meetings were also held with these component auditors and others that were not physically visited. At these visits and meetings, we:
• Assessed and communicated the Group audit risks and strategy, including those risks that are relevant to component auditors;
• Responded to specific issues in the United States, with senior Group audit team members visiting the component auditor during planning and
year end;
• Attended year end clearance meetings where the findings reported to the Group audit team were discussed in more detail and any further work
required by the Group audit team was then performed by the component auditors; and
• Inspected component audit teams’ key working papers within component audit files to evaluate the quality of execution of the audits of the
components, with a particular focus on the minimum procedures instructed in relation to our key audit matters.
Computacenter plc Annual Report and Accounts 2022 | 145
Independent Auditor’s Reports continued
to the members of Computacenter plc
Group revenue
Group profit before tax
Group total assets
7
3
83
97
10
93%
(2021: 97%)
1 6
4
93
96
94%
(2021: 96%)
11
5
5
84
95
95%
(2021: 95%)
Full scope for Group audit purposes 2022
Specified audit procedures for Group audit purposes 2022
Full scope for Group audit purposes 2021
Residual components
4. The impact of climate change on our audit
In planning our audit we have considered the potential impacts of climate change on the Group’s business and its financial statements.
The Group’s business model does not include extractive or high pollutive activities that are a significant contributor to climate change. The
Group’s main exposure to climate risk is the shifting expectations from business stakeholders to transition to low-carbon supply chains and
greater emphasis on climate related disclosures in the annual report, and severe weather events disrupting key service delivery locations.
As part of our audit we made enquires of management and inspected minutes from the Climate Risk Committee meetings held throughout the
year, to understand the Group’s assessment and preparedness for climate change. We have performed a risk assessment on how the impact of
climate change may affect the financial statements and our audit, and taking into account headroom on goodwill and nature of the Group’s
assets and liabilities, there was no significant impact on our key audit matters, including impairment forecasts, or key areas of our audit.
We have also read the Group’s and Parent Company’s disclosure of climate related information in the front half of the annual report as set out on
pages 54 to 57 and considered consistency with the financial statements and our audit knowledge
5. Going concern
The Directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the Company or the Group or to
cease their operations, and as they have concluded that the Company’s and the Group’s financial position means that this is realistic. They have
also concluded that there are no material uncertainties that could have cast significant doubt over their ability to continue as a going concern for
at least a year from the date of approval of the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general economic environment to identify the inherent risks to its business model and
analysed how those risks might affect the Group’s and Company’s financial resources or ability to continue operations over the going concern
period. The risk that we considered most likely to adversely affect the Group’s and Company’s available financial resources over this period was
lower than expected trading volumes.
We considered whether these risks could plausibly affect the liquidity in the going concern period by comparing severe, but plausible downside
scenarios that could arise from these risks individually and collectively against the level of available financial resources indicated by the Group’s
financial forecasts.
We considered whether the going concern disclosure in note 2.1 to the financial statements gives a full and accurate description of the Directors’
assessment of going concern, including the identified risks and related sensitivities.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate;
• we have not identified, and concur with the directors’ assessment that there is not, a material uncertainty related to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s or Company’s ability to continue as a going concern for the going concern
period;
• we have nothing material to add or draw attention to in relation to the directors’ statement on page 137 of the financial statements on the use
of the going concern basis of accounting with no material uncertainties that may cast significant doubt over the Group and Company’s use of
that basis for the going concern period, and we found the going concern disclosure in note 2.1 to be acceptable; and
• the related statement under the Listing Rules set out on page 138 is materially consistent with the financial statements and our audit
knowledge.
146 | Computacenter plc Annual Report and Accounts 2022
Financial Statements
6. Fraud and breaches of laws and regulations – ability to detect
Identifying and responding to risks of material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud. Our risk assessment procedures included:
• Enquiring of directors, the audit committee, internal audit and other key management personnel, and inspection of policy documentation as to
the Group’s high-level policies and procedures to prevent and detect fraud, including the internal audit function as well as whether they have
knowledge of any actual, suspected or alleged fraud.
• Reading Board meeting minutes and attending audit committee meetings.
• Reading and considering the content of remuneration incentive schemes and performance targets for management, directors, and sales staff,
including the EPS target for management remuneration.
• Using analytical procedures to identify any unusual or unexpected relationships.
We communicated identified fraud risks throughout the audit team and remained alert to any indications of fraud throughout the audit. This
included communication from the Group to full scope component audit teams of relevant fraud risks identified at the Group level and request to
full scope component audit teams to report to the Group audit team any instances of fraud that could give rise to a material misstatement at
Group level.
As required by auditing standards, we performed procedures to address the risk of management override of controls and the risk of fraudulent
revenue recognition, in particular the risk that Technology sourcing bill and hold sales and Technology sourcing non-bill and hold sales are
recorded in the wrong period, and the risk that Group and component management may be in a position to make inappropriate accounting
entries. On this audit we do not believe there is a fraud risk related to revenue recognition of Managed Services and Professional Services because
the level of estimation and judgement over contracts spanning the year end is low.
We did not identify any additional fraud risks.
Further detail in respect of Technology sourcing bill and hold and non-bill and hold sales is set out in the key audit matter disclosures in section 2
of this report.
We also performed procedures including:
• Identifying journal entries to test for all full scope components based on risk criteria and comparing the identified entries to supporting
documentation. These included those posted to unusual accounts, those with unusual descriptions, and round number adjustments to
provisions.
• Assessing whether the judgements made when recognising revenue are indicative of a potential bias.
Identifying and responding to risks of material misstatement due to non-compliance with laws and regulations
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our
general commercial and sector experience, and through discussion with the directors and other management (as required by auditing
standards). We also discussed with the directors and other management the policies and procedures regarding compliance with laws and
regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control environment including the entity’s procedures
for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the
audit. This included communication from the Group to full-scope component audit teams of relevant laws and regulations identified at the Group
level, and a request for full scope component auditors to report to the Group team any instances of non-compliance with laws and regulations
that could give rise to a material misstatement at the Group level.
The potential effect of these laws and regulations on the financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including
related companies legislation), distributable profits legislation, pension legislation, and taxation legislation, and we assessed the extent of
compliance with these laws and regulations as part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as
those most likely to have such an effect: export legislation, GDPR compliance, health and safety, contract legislation, anti-bribery, employment
law, and certain aspects of company and environmental legislation, recognising the nature of the Group’s activities to export IT hardware and
provide global IT services. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to
enquiry of the directors and other management, and inspection of regulatory and legal correspondence, if any. Therefore if a breach of
operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the
financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the
further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less
likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are
not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Computacenter plc Annual Report and Accounts 2022 | 147
Independent Auditor’s Reports continued
to the members of Computacenter plc
We have nothing to report on the other information in the Annual Report
7.
The directors are responsible for the other information presented in the Annual Report together with the financial statements. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as explicitly stated below,
any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit work, the information
therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based solely on that work we have not
identified material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic report and the directors’ report;
• in our opinion the information given in those reports for the financial year is consistent with the financial statements; and
• in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
Disclosures of emerging principal risks and longer-term viability
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ disclosures in respect of emerging
and principal risks and the viability statement, and the financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
• the directors’ confirmation within the viability statement on page 67 that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its business model, future performance, solvency and liquidity;
• the Principal Risks and Uncertainties disclosures describing these risks and how emerging risks are identified, and explaining how they are being
managed and mitigated; and
• the directors’ explanation in the viability statement of how they have assessed the prospects of the Group, over what period they have done so
and why they considered that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
We are also required to review the viability statement, set out on pages 67 to 68 under the Listing Rules. Based on the above procedures, we have
concluded that the above disclosures are materially consistent with the financial statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to report on these statements is not a guarantee as to the Group’s and Company’s
longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is materially consistent with the financial statements and our audit
knowledge:
• the directors’ statement that they consider that the annual report and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for shareholders to assess the Group’s position and performance, business model and
strategy;
• the section of the annual report describing the work of the Audit Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these issues were addressed; and
• the section of the annual report that describes the review of the effectiveness of the Group’s risk management and internal control systems.
We are required to review the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK
Corporate Governance Code specified by the Listing Rules for our review. We have nothing to report in these respects.
8. We have nothing to report on the other matters on which we are required to report by exception
Under the Companies Act 2006, we are required to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from
branches not visited by us; or
• the Parent Company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
We have nothing to report in these respects.
148 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 9. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 139, the directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal control as they determine is statements that are free from material
misstatement, whether due to fraud or error; assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or
the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue our opinion in an auditor’s report. Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared using the single electronic reporting format
specified in the TD ESEF Regulation. This auditor’s report provides no assurance over whether the annual financial report has been prepared in
accordance with that format.
10. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and the terms
of our engagement by the Company. Our audit work has been undertaken so that we might state to the Company’s members those matters we are
required to state to them in an auditor’s report, and the further matters we are required to state to them in accordance with the terms agreed
with the Company, and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the Company and the Company’s members, as a body, for our audit work, for this report, or for the opinions we have formed.
Mark Flanagan (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
6 April 2023
Computacenter plc Annual Report and Accounts 2022 | 149
Consolidated Income Statement
For the year ended 31 December 2022
Revenue
Cost of sales
Gross profit
Administrative expenses
Impairment reversal/(loss) on trade receivables and contract assets
Operating profit
Finance income
Finance costs
Profit before tax
Income tax expense
Profit for the year
Attributable to:
Equity holders of the Parent
Non-controlling interests
Profit for the year
Earnings per share:
– basic
– diluted
Note
4,5
4
20
10
11
12
2022
£m
6,470.5
(5,523.4)
947.1
2021
£m
(restated)
5,034.5
(4,166.7)
867.8
(691.8)
1.1
256.4
2.4
(9.8)
249.0
(64.8)
184.2
182.8
1.4
184.2
(612.0)
(0.6)
255.2
0.3
(7.5)
248.0
(61.5)
186.5
185.3
1.2
186.5
13
13
162.1p
159.1p
164.0p
160.9p
The comparative information is restated on account of a change in accounting policy for Technology Sourcing revenue and cost of sales, see note 3.
All of the activities of the Group relate to continuing operations.
The accompanying notes on pages 155 to 202 form an integral part of these consolidated financial statements.
150 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
Profit for the year
Items that may be reclassified to the Consolidated Income Statement:
Loss arising on cash flow hedge
Income tax effect
Exchange differences on translation of foreign operations
Items not to be reclassified to the Consolidated Income Statement:
Remeasurement of defined benefit plan
Other comprehensive expense for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the Parent
Non-controlling interests
Total comprehensive income for the year
The accompanying notes on pages 155 to 202 form an integral part of these consolidated financial statements.
Note
33
2022
£m
184.2
(2.5)
1.0
(1.5)
47.5
46.0
1.7
47.7
2021
£m
186.5
(0.9)
0.2
(0.7)
(9.6)
(10.3)
1.2
(9.1)
231.9
177.4
229.9
2.0
231.9
176.2
1.2
177.4
Computacenter plc Annual Report and Accounts 2022 | 151
Consolidated Balance Sheet
As at 31 December 2022
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Investment in associate
Deferred income tax assets
Prepayments
Current assets
Inventories
Trade and other receivables
Income tax receivable
Prepayments
Accrued income
Derivative financial instruments
Cash and short-term deposits
Total assets
Current liabilities
Bank overdraft
Trade and other payables
Deferred income
Financial liabilities
Lease liabilities
Derivative financial instruments
Income tax payable
Provisions
Non-current liabilities
Financial liabilities
Lease liabilities
Deferred income
Retirement benefit obligation
Provisions
Deferred income tax liabilities
Total liabilities
Net assets
Capital and reserves
Issued share capital
Share premium
Capital redemption reserve
Own shares held
Translation and hedging reserve
Retained earnings
Shareholders’ equity
Non-controlling interests
Total equity
Note
15
15
16
18a
12d
5
19
20
5
5
24
21
21
22
5
23a
23b
24
26
23a
23b
5
33
26
12d
29
29
29
29
29
29
2022
£m
94.1
119.4
342.1
0.1
11.3
19.4
586.4
417.7
1,713.2
14.6
130.5
135.2
7.5
275.1
2,693.8
3,280.2
10.7
1,857.5
265.3
7.5
36.9
8.7
56.4
3.8
2,246.8
12.6
90.2
7.9
23.0
7.0
20.7
161.4
2,408.2
872.0
9.3
4.0
75.0
(127.7)
50.7
854.4
865.7
6.3
872.0
2021
£m
90.0
138.1
273.7
0.1
30.2
16.6
548.7
341.3
1,275.2
8.8
103.0
148.1
3.6
285.2
2,165.2
2,713.9
12.0
1,410.4
249.3
15.1
43.0
2.5
47.9
3.5
1,783.7
16.7
103.1
8.3
21.8
9.7
25.8
185.4
1,969.1
744.8
9.3
4.0
75.0
(115.5)
5.4
762.3
740.5
4.3
744.8
The accompanying notes on pages 155 to 202 form an integral part of these consolidated financial statements.
Approved by the Board on 6 April 2023.
MJ Norris
Chief Executive Officer
FA Conophy
Group Finance Director
152 | Computacenter plc Annual Report and Accounts 2022
Financial Statements
Consolidated Statement of Changes in Equity
For the year ended 31 December 2022
At 1 January 2022
Profit for the year
Other comprehensive income/(expense)
Total comprehensive income/(expense)
Cost of share-based payments
Tax on share-based payments
Exercise of options
Purchase of own shares
Equity dividends
At 31 December 2022
At 1 January 2021
Profit for the year
Other comprehensive income/(expense)
Total comprehensive income/(expense)
Cost of share-based payments
Tax on share-based payments
Exercise of options
Purchase of own shares
Equity dividends
At 31 December 2021
Issued
share
capital
£m
9.3
–
–
–
–
–
–
–
–
9.3
9.3
–
–
–
–
–
–
–
–
9.3
Attributable to equity holders of the Parent
Share
premium
£m
4.0
–
–
–
–
–
–
–
–
4.0
Capital
redemption
reserve
£m
75.0
–
–
–
–
–
–
–
–
75.0
Own
shares
held
£m
(115.5)
–
–
–
–
–
22.2
(34.4)
–
(127.7)
Translation
and hedging
reserves
£m
5.4
–
45.3
45.3
–
–
–
–
–
50.7
4.0
–
–
–
–
–
–
–
–
4.0
75.0
–
–
–
–
–
–
–
–
75.0
(111.7)
–
–
–
–
–
21.7
(25.5)
–
(115.5)
15.7
–
(10.3)
(10.3)
–
–
–
–
–
5.4
Retained
earnings
£m
762.3
182.8
1.8
184.6
8.6
(4.6)
(16.0)
–
(80.5)
854.4
635.5
185.3
1.2
186.5
10.6
7.6
(15.5)
–
(62.4)
762.3
Share-
holders’
equity
£m
740.5
182.8
47.1
229.9
8.6
(4.6)
6.2
(34.4)
(80.5)
865.7
627.8
185.3
(9.1)
176.2
10.6
7.6
6.2
(25.5)
(62.4)
740.5
Non-
controlling
interests
£m
4.3
1.4
0.6
2.0
–
–
–
–
–
6.3
3.1
1.2
–
1.2
–
–
–
–
–
4.3
Total
equity
£m
744.8
184.2
47.7
231.9
8.6
(4.6)
6.2
(34.4)
(80.5)
872.0
630.9
186.5
(9.1)
177.4
10.6
7.6
6.2
(25.5)
(62.4)
744.8
The accompanying notes on pages 155 to 202 form an integral part of these consolidated financial statements.
Computacenter plc Annual Report and Accounts 2022 | 153
Note
15
15
16
10
18
15
16
11
11
14
23b
21
21
2022
£m
249.0
7.4
21.5
50.5
18.9
8.6
–
0.5
(7.0)
(317.2)
263.4
(0.7)
(0.1)
294.8
(52.7)
242.1
2.4
(28.3)
(23.7)
(11.8)
1.1
(60.3)
(2.9)
(4.9)
(80.5)
6.2
(34.4)
(20.6)
(50.3)
4.0
(183.4)
(1.6)
(7.2)
273.2
264.4
2021
£m
248.0
7.2
24.8
50.6
15.3
10.6
0.5
(1.3)
(131.5)
(238.5)
292.2
(1.7)
1.3
277.5
(53.2)
224.3
0.3
(2.5)
(18.8)
(11.5)
7.5
(25.0)
(2.3)
(5.2)
(62.4)
6.2
(25.5)
(99.7)
(50.2)
10.7
(228.4)
(29.1)
(7.5)
309.8
273.2
Consolidated Cash Flow Statement
For the year ended 31 December 2022
Operating activities
Profit before taxation
Net finance cost
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Amortisation of intangible assets
Share-based payments
Loss on disposal of intangibles
Loss/(Gain) on disposal of property, plant and equipment
Net cash flow from inventories
Net cash flow from trade and other receivables (including contract assets)
Net cash flow from trade and other payables (including contract liabilities)
Net cash flow from provisions and employee benefits
Other adjustments
Cash generated from operations
Income taxes paid
Net cash flow from operating activities
Investing activities
Interest received
Acquisition of subsidiaries, net of cash acquired
Purchases of property, plant and equipment
Purchases of intangible assets
Proceeds from disposal of property, plant and equipment
Net cash flow from investing activities
Financing activities
Interest paid
Interest paid on lease liabilities
Dividends paid to equity shareholders of the Parent
Proceeds from exercise of share options
Purchase of own shares
Repayment of loans and credit facility
Payment of capital element of lease liabilities
Borrowings
Net cash flow from financing activities
(Decrease)/increase in cash and cash equivalents
Effect of exchange rates on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the year end
The accompanying notes on pages 155 to 202 form an integral part of these consolidated financial statements.
154 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Notes to the Consolidated Financial Statements
For the year ended 31 December 2022
1 Authorisation of Consolidated Financial Statements and statement of compliance with IFRS
The Consolidated Financial Statements of Computacenter plc (Parent Company or the Company) and its subsidiaries (the Group) For the year
ended 31 December 2022 were authorised for issue in accordance with a resolution of the Directors on 6 April 2023. The Consolidated Balance
Sheet was signed on behalf of the Board by MJ Norris and FA Conophy. Computacenter plc is a limited company incorporated and domiciled in
England whose shares are publicly traded.
2 Summary of significant accounting policies
The accounting policies adopted are consistent with those of the previous financial year as applied in the 2021 Annual Report and Accounts,
except for the change in revenue recognition policies relating to software licences and third-party services agreements resold on a standalone
basis following the finalisation of an agenda decision by the IFRS Interpretation Committee (the ‘Committee’) explained in note 3.2.1.
Effective for the year ending 31 December 2022
Apart from the changes discussed within note 3.2.1, no new standards, interpretations or amendments not yet effective are expected to have
a material effect on the Group’s financial statements.
2.1 Basis of preparation
The Consolidated Financial Statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the United Kingdom and in conformity with the requirements of the Companies Act 2006.
The Consolidated Financial Statements are prepared on the historical cost basis, other than derivative financial instruments, which are stated
at fair value.
The Consolidated Financial Statements are presented in pound sterling (£) and all values are rounded to the nearest hundred thousand, except
when otherwise indicated.
As described in note 3.2.1 and in accordance with IAS 8, a retrospective restatement of the prior year reported Financial Statements for the year
to 31 December 2021 has taken place due to a change in revenue recognition policies relating to software licences and third-party services
agreements resold on a standalone basis.
In determining whether it is appropriate to prepare the Financial Statements on a going concern basis, the Group prepares a three-year Plan
(the ‘Plan’) annually by aggregating top-down expectations of business performance across the Group in the second and third year of the Plan
with a detailed 12-month bottom-up budget for the first year, which was approved by the Board. The Plan is subject to rigorous downside sensitivity
analysis which involves flexing a number of the main assumptions underlying the forecasts within the Plan. The forecast cash flows from the Plan
are aggregated with the current position to provide a total three-year cash position against which the impact of potential risks and uncertainties
can be assessed. In the absence of significant external debt, the analysis also considers access to available committed and uncommitted
finance facilities, the ability to raise new finance in most foreseeable market conditions and the ability to restrict dividend payments.
The Directors have identified a period of not less than 12 months as the appropriate period for the going concern assessment and have based
their assessment on the relevant forecasts from the Plan for that period.
The potential impact of the principal risks and uncertainties, as set out on pages 74 to 81 of the 2022 Annual Report and Accounts, is then applied
to the Plan. This assessment includes only those risks and uncertainties that, individually or in plausible combination, would threaten the Group’s
business model, future performance, solvency or liquidity over the assessment period and which are considered to be severe but reasonable
scenarios. It also takes into account an assessment of how the risks are managed and the effectiveness of any mitigating actions.
For the current year, the primary downside sensitivity relates to a modelled, but not predicted, severe downturn in the Group’s revenues,
beginning in 2023, the primary downside sensitivity relates to a modelled, but not predicted, severe downturn in Group revenues, beginning in
2023, simulating a continued impact for some of our customers from the Covid-19 crisis, a reduction in customer demand due to the current
economic crisis, and ongoing impacts on the Group’s revenues from supply shortages. This sensitivity analysis models a continued market
downturn scenario, with slower-than-predicted recovery estimates, for some of our customers whose businesses have been affected by
Covid-19 and a similar downturn occurring for the remainder of our customer base as a result of the emerging negative global macroeconomic
environment due to the current economic crisis. A further impact on the Group’s Technology Sourcing revenues through the second half of 2023
from possible ongoing vendor-related supply shortage issues has also been included in the sensitivity analysis.
Our cash and borrowing capacity provides sufficient funds to meet the foreseeable needs of the Parent and Group. At 31 December 2022,
the Group had cash and short-term deposits of £275.1 million and bank debt, primarily related to the recently built headquarters in Germany
and operations in North America, of £20.1 million. On 9 December 2022, the Group entered into a new unsecured multicurrency revolving loan
facility of £200.0 million in order to rationalise its treasury operations. The new facility has a term of five years plus two one-year extension
options exercisable on the first and second anniversary of the facility. The Group-specific committed facility of £60.0 million that was due to
expire on 8 September 2023 was terminated and all security was released. The revolving credit facility which its subsidiary, Pivot, had with
JPMorgan Chase Bank, N.A. (JPMC) of $100.0 million that was due to expire on 14 May 2024 was also repaid in full and all security was released.
The Group has a resilient balance sheet position, with net assets of £872.0 million as at 31 December 2022. The Group made a profit after tax
of £184.2 million, and delivered net cash flows from operating activities of £242.1 million, for the year ended 31 December 2022.
As the analysis continues to show a strong forecast cash position, even under the severe economic conditions modelled in the sensitivity
scenarios, the Directors continue to consider that the Parent and Group are well placed to manage business and financial risks in the current
economic environment. Based on this assessment, the Directors confirm that they have a reasonable expectation that the Parent and Group will
be able to continue in operation and meet their liabilities as they fall due over the period of not less than 12 months from the date of signing this
Annual Report and Accounts and therefore have prepared the Financial Statements on a going concern basis.
Computacenter plc Annual Report and Accounts 2022 | 155
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
2 Summary of significant accounting policies continued
2.2 Basis of consolidation
The Consolidated Financial Statements comprise the Financial Statements of the Parent Company and its subsidiaries as at 31 December each
year. The Financial Statements of subsidiaries are prepared for the same reporting year as the Parent Company, using existing GAAP in each
country of operation. Adjustments are made on consolidation for differences that may exist between the respective local GAAPs and IFRS.
All intra-Group balances, transactions, income and expenses and profit and losses resulting from intra-Group transactions have been eliminated in full.
Subsidiaries are consolidated from the date on which the Group obtains control and cease to be consolidated from the date on which the Group no
longer retains control. Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries that is not held by the Group
and is presented separately from Parent shareholders’ equity in the Consolidated Balance Sheet.
2.2.1 Foreign currency translation
Each entity in the Group determines its own functional currency and items included in the Financial Statements of each entity are measured using
that functional currency. Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate ruling at the
date of the transaction or where relevant the rate of a specific forward exchange contract. Monetary assets and liabilities denominated in foreign
currencies are retranslated at the functional currency rate of exchange ruling at the Consolidated Balance Sheet date. All differences are taken to
the Consolidated Income Statement except foreign currency differences arising from the translation of qualifying cash flow hedges, which are
recognised in the Consolidated Statement of Comprehensive Income, to the extent that the hedges are effective.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date
of initial transaction.
The functional currencies of the main overseas subsidiaries are euro (€), US dollar ($), Canadian dollar (CAD) and Swiss franc (CHF). The Group’s
presentation currency is pound sterling (£). As at the reporting date, the assets and liabilities of overseas subsidiaries are translated into the
presentation currency of the Group at the rate of exchange ruling at the balance sheet date and their Consolidated Income Statements are
translated at the average exchange rates for the year. Exchange differences arising on the retranslation are recognised in the Consolidated
Statement of Comprehensive Income. On disposal of a foreign entity, the deferred cumulative amount recognised in the Consolidated Statement
of Comprehensive Income relating to that particular foreign operation is recognised in the Consolidated Income Statement.
2.3 Revenue
Revenue is recognised when the Group’s performance obligations are fulfilled to the extent of the amount which is expected to be received from
customers as consideration for the transfer of goods and services to the customer.
In multi-element contracts with customers where more than one good (Technology Sourcing) or service (Professional Services and Managed
Services) is provided to the customer, analysis is performed to determine whether the separate promises are distinct performance obligations
within the context of the contract. To the extent that this is the case, the transaction price is allocated between the distinct performance
obligations based upon relative standalone selling prices. The revenue is then assessed for recognition purposes based upon the nature of
the activity and the terms and conditions of the associated customer contract relating to that specific distinct performance obligation.
The following specific recognition criteria must also be met before revenue is recognised:
2.3.1 Technology Sourcing
The Group supplies hardware, software and resold third-party services (together as ‘goods’) to customers that are sourced from and delivered
by a number of suppliers.
Technology Sourcing revenue is recognised when the Group’s performance obligations are fulfilled at a point in time when control of the goods
has been transferred to the customer. Typically, customers obtain control of the goods when they are delivered to and have been accepted at
their premises, depending on individual customer arrangements. Invoices are routinely generated at despatch from our Integration Centers or,
in the case of direct delivery by supplier, upon receipt at customer locations. At each reporting date, a process is undertaken to ensure revenue
is not recognised for goods that have not been received by customers at that reporting date. Payment for the goods is generally received on,
or before, industry-standard payment terms, ordinarily within 30 days. Refer to note 3.2.2 for ‘bill and hold’ transactions.
Revenue is recorded based on the price specified in sales invoices, net of any agreed discounts and rebates, and exclusive of value added tax
on goods supplied to customers during the year.
There are a variety of discounts and rebates provided to customers, which are assessed on a case-by-case basis as to whether the resulting
payment to customers is for a distinct good or service (such as marketing) or for a promotional discount.
Technology Sourcing principal versus agent recognition
Management assesses the classification of certain revenue contracts for Technology Sourcing revenue recognition on either an agent or principal
basis. Because the identification of the principal in a contract is not always clear, Management makes a determination by evaluating the nature
of our promise to our customer as to whether it is a performance obligation to pass control of the specified goods or services ourselves, in that
we are the principal, or to arrange for those goods or services to be provided by the other party, where we are the agent. See note 3.2.1 Technology
Sourcing principal versus agent recognition for further information on this critical judgement. We determine whether we are a principal or an
agent for each specified good or service promised to the customer by evaluating the nature of our promise to the customer against a non-
exhaustive list of indicators that a performance obligation could involve an agency relationship:
• we do not control each specified good or service before that good or service is delivered to the customer;
• the vendor retains primary responsibility for fulfilling the sale;
• we take no inventory risk before or after the goods have been ordered, during shipping or on return;
• we do not have discretion to establish pricing for the vendor’s goods, limiting the benefit we can receive from the sale of those goods; and
• our consideration is in the form of a, usually predetermined, commission.
156 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 2.3.2 Professional Services
The Group provides skilled professionals to customers either operating within a project framework or on a ‘resource on demand’ basis.
For contracts operating within a project framework, revenue is recognised based on the transaction price with reference to the costs incurred as
a proportion of the total estimated costs (percentage of completion basis) of the contract.
For those contracts which are ‘resource on demand’, revenue is billed on a timesheet basis. The Group elects to use the practical expedient in IFRS
15.B16, as we have a right to consideration from our ‘resource on demand’ Professional Services customers in an amount that corresponds directly
with the value to our customer of the Group’s performance completed to date. The practical expedient applied permits the Group to recognise
these ‘resource on demand’ Professional Services revenues in the amount to which the entity has a right to invoice. Professional Services revenue
is therefore recognised throughout the term of the contract, as services are delivered, with amounts recognised based on monthly invoiced
amounts, as this corresponds to the service delivered to the customer and the satisfaction of the Group’s performance obligations.
Under either basis, Professional Services revenue is recognised over time. The majority of the Group’s Professional Services revenue is constituted by
‘expert-leasing’ arrangements and recognised in this manner and represents the primary area of growth in this business line. As the majority of
Professional Services revenue is recognised as ‘resource on demand’, the overall balance of risks to recognition for this business is decreased as
compared to the scenario where the majority of Professional Services revenue would be recognised on a percentage of completion basis. This is
due to the monthly timesheet nature of the billing which is agreed regularly with the customer as the service is delivered.
If the total estimated costs and revenues of a contract cannot be reliably estimated, revenue is recognised only to the extent that costs have
been incurred and where the Group has an enforceable right to payment as work is being performed.
A provision for forecast excess costs over forecasted revenue is made as soon as a loss is foreseen (see note 2.12.1 for further detail).
Payment for the Services, which are invoiced monthly, is generally on industry standard payment terms.
2.3.3 Managed Services
The Group sells maintenance, support and management of customers’ IT infrastructures and operations.
The specific performance obligations and invoicing conditions in our Managed Services contracts are typically related to the number of calls,
interventions or users that we manage and therefore the customer simultaneously receives and consumes the benefits of the services as they
are performed. The Group elects to use the practical expedient in IFRS 15.B16, as we have a right to consideration from our Managed Services
customers in an amount that corresponds directly with the value to our customer of the Group’s performance completed to date. The practical
expedient applied permits the Group to recognise Managed Services revenue in the amount to which the entity has a right to invoice. Managed
Services revenue is therefore recognised throughout the term of the contract, as services are delivered, with amounts recognised based on monthly
invoiced amounts, as this corresponds to the service delivered to the customer and the satisfaction of the Group’s performance obligations.
Amounts invoiced relating to more than one year are deferred and recognised over the relevant period. Payment for the services is generally on
industry standard payment terms.
If the total estimated costs and revenues of a contract cannot be reliably estimated, revenue is recognised only to the extent that costs have
been incurred and where the Group has an enforceable right to payment as work is being performed. A provision for forecast excess costs over
forecasted revenue is made as soon as a loss is foreseen (see note 2.12.1 for further detail). On occasion, the Group may have a limited number
of Managed Services contracts where revenue is recognised on a percentage of completion basis, which is determined by reference to the costs
incurred as a proportion of the total estimated costs of the contract.
Costs of obtaining and fulfilling revenue contracts
The Group operates in a highly competitive environment and is frequently involved in contract bids with multiple competitors, with the outcome
usually unknown until the contract is awarded and signed.
When accounting for costs associated with obtaining and fulfilling customer contracts, the Group first considers whether these costs fit within
a specific IFRS standard or policy. Any costs associated with obtaining or fulfilling revenue contracts which do not fall into the scope of other IFRS
standards or policies are considered under IFRS 15. All such costs are expensed as incurred other than the two types of costs noted below:
1.
Win fees – The Group pays ‘win fees’ to certain employees as bonuses for successfully obtaining customer contracts. As these are incremental
costs of obtaining a customer contract, they are deferred along with any associated payroll tax expense to the extent they are expected to be
recovered. These balances are presented within prepayments in the Consolidated Balance Sheet. The win fee balance that will be realised
after more than 12 months is disclosed as non-current.
2. Fulfilment costs – The Group often incurs costs upfront relating to the initial set-up phase of an outsourcing contract, which the Group refers
to as Entry Into Service. These costs do not relate to a distinct performance obligation in the contract, but rather are accounted for as
fulfilment costs under IFRS 15 as they are directly related to the future performance on the contract. They are therefore capitalised to the
extent that they are expected to be recovered. These balances are presented within prepayments in the Consolidated Balance Sheet.
Both win fees and Entry Into Service costs are amortised on a straight-line basis over the contract term, as this is equivalent to the pattern of
transfer of services to the customer over the contract term. The amortisation charges on win fees and Entry Into Service costs are recognised in
the Consolidated Income Statement within administration expenses and cost of sales, respectively.
Any bid costs incurred by the Group’s Central Bid Management Engines are not capitalised or charged to the contract, but instead directly charged
to selling, general and administrative expenses as they are incurred. These costs associated with bids are not separately identifiable nor can they
be measured reliably as the Group’s internal bid teams work across multiple bids at any one time.
Computacenter plc Annual Report and Accounts 2022 | 157
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
2 Summary of significant accounting policies continued
2.3.4 Contract assets and liabilities
A contract asset is recognised when the Group has a right to consideration for goods or services which have been transferred to the customer but
have not been billed, therefore excluding receivable balances. Contract assets typically relate to longer term Professional and Managed services
contracts where work has been performed but has not been invoiced to the customer, and are included within either prepayments or accrued
income on the Consolidated Balance Sheet.
A contract liability is recognised when a customer pays the Group, or the Group has a right to consideration that is unconditional, before the
transfer of the goods or services to which it relates. Contract liabilities typically relate to longer-term Professional and Managed services
contracts where consideration has been received under agreed billing timelines for which work has yet to be performed, and are included within
deferred income on the Consolidated Balance Sheet.
2.3.5 Finance income
Income is recognised as interest accrues.
2.4 Exceptional items
The Group presents those material items of income and expense as exceptional items which, because of the nature and expected infrequency
of the events giving rise to them, merit separate presentation to allow shareholders to understand the elements of financial performance in the
year, so as to facilitate comparison with prior years and to assess trends in financial performance.
2.5 Adjusted1 measures
The Group uses a number of non-Generally Accepted Accounting Practice (non-GAAP) financial measures in addition to those reported in
accordance with IFRS. The Directors believe that these non-GAAP measures, set out below, assist in providing additional useful information on the
underlying trends, performance and position of the Group. The non-GAAP measures are also used to enhance the comparability of information
between reporting periods by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid the user in understanding
the Group’s performance.
Consequently, non-GAAP measures are used by the Directors and Management for performance analysis, planning, reporting and incentive-
setting purposes. Adjusted measures have remained consistent with the prior year except for the addition of gross invoiced income, as an
alternative performance measure, due to the change in Technology Sourcing revenue accounting policy for principal versus agent recognition.
Refer to note 3 for further information on the change in accounting policy.
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 from revenue, 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.
These non-GAAP measures comprise: gross invoiced income, adjusted administrative expenses, adjusted operating profit or loss, adjusted profit
or loss before tax, adjusted tax, adjusted profit or loss for the year, adjusted earnings per share and adjusted diluted earnings per share. They are,
as appropriate, each stated before: exceptional and other adjusting items including gain or loss on acquisitions, expenses related to material
acquisitions, 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 adjusting items when comparing to the non-GAAP financial measures, in addition to those reported in accordance with IFRS. Further detail
is also provided within note 4, Segment information.
2.6 Impairment of assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when
annual impairment testing for an asset is required, the Group makes an estimate of the asset’s recoverable amount. Where an asset does not
have independent cash flows, the recoverable amount is assessed for the cash-generating unit (CGU) to which it belongs. These assets are tested
across an aggregation of CGUs that utilise the asset. The recoverable amount is the higher of the fair value less costs to sell and the value-in-use
of the asset or CGU. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down
to its recoverable amount. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a post-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses of
continuing operations are recognised in the Consolidated Income Statement in those expense categories consistent with the function of the
impaired asset.
For assets excluding goodwill, an assessment is made at each reporting date whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment was recognised. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
recognised for the asset in prior years. As the Group has no assets carried at revalued amounts, such reversal is recognised in the
Consolidated Income Statement.
158 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 2.7 Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation, down to residual value, is calculated on a straight-line basis over the estimated useful life of the asset as follows:
• freehold buildings: 25-50 years
• short leasehold improvements: shorter of seven years and period to expiry of lease
• fixtures and fittings:
– head office: 5-15 years
– other: shorter of seven years and period to expiry of lease
• office machinery and computer hardware: 2-15 years
• motor vehicles: three years
Freehold land is not depreciated. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference
between the net disposal proceeds and the carrying amount of the item) is included in the Consolidated Income Statement in the year the
item is derecognised.
2.8 Leases
2.8.1 Group as lessee
Recognition of a lease
The contracts are assessed by the Group, to determine whether a contract is, or contains a lease. In general, arrangements are a lease when all
of the following apply:
• it conveys the right to control the use of an identified asset for a certain period, in exchange for consideration;
• the Group obtains substantially all economic benefits from the use of the asset; and
• the Group can direct the use of the identified asset.
The Group elects to separate the non-lease components.
Measurement of a right-of-use asset and lease liability
Right-of-use asset
The Group measures the right-of-use asset at cost, which includes the following:
• the initial amount of the lease liability, adjusted for any lease payments made at or before the lease commencement date;
• any lease incentives received; and
• any initial direct costs incurred by the Group as well as an estimate of costs to be incurred by the Group in dismantling and removing the
underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the lease contract.
Cost for dismantling, removing or restoring the site on which it is located and/or the underlying asset is only recognised when the Group incurs
an obligation to do so.
The right-of-use asset is depreciated over the lease term, using the straight-line method.
Lease liability
The lease liability is initially measured at the present value of the unpaid lease payments, discounted using the interest rate implicit in the lease,
or if the rate cannot be readily determined, the Group’s incremental borrowing rate. Lease payments included in the measurement comprise fixed
payments, variable lease payments that depend on an index or a rate, amounts to be paid under a residual value guarantee and lease payments
in an optional renewal period, if the Group is reasonably certain to exercise an extension option, as well as penalties for early termination of a
lease, if the Group is reasonably certain to terminate early. If there is a purchase option present, this will be included if the Group is reasonably
certain to exercise the option.
Leases of low-value assets and short term
Leases of low-value assets (<£5,000) and short term with a term of 12 months or less are not required to be recognised on the Consolidated
Balance Sheet and payments made in relation to these leases are recognised on a straight-line basis in the Consolidated Income Statement.
2.8.2 Group as a lessor
The Group entered in to lease agreements as a lessor on certain items of machinery and software. Leases for which the Group is a lessor are
classified as operating leases. Rental income arising from operating leases is accounted for on a straight-line basis over the lease term.
In cases where the Group acts as an intermediate lessor, it accounts for its interests in the head-lease and the sub-lease separately.
2.9 Intangible assets
2.9.1 Software and software licences
Software and software licences include computer software that is not integral to a related item of hardware. These assets are stated at cost less
accumulated amortisation and any impairment in value. Amortisation is calculated on a straight-line basis over the estimated useful life of the
asset. Currently software is amortised over four years.
The carrying values of software and software licences are reviewed for impairment when events or changes in circumstances indicate that the
carrying value may not be recoverable. If any such indication exists and where the carrying values exceed the estimated recoverable amount,
the assets are written down to their recoverable amount.
Computacenter plc Annual Report and Accounts 2022 | 159
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
2 Summary of significant accounting policies continued
2.9.2 Software under development
Costs that are incurred and that can be specifically attributed to the development phase of management information systems for internal use
are capitalised only if the expenditure can be measured reliably, the management information system is technically and commercially feasible,
future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use.
Research expenditure and development expenditure that do not meet the criteria above are recognised as an expense as incurred. Development
costs previously recognised as an expense are not recognised as an asset in a subsequent period.
Directly attributable costs that are capitalised typically include professional fees and cost of material/services consumed.
Capitalised development costs are recorded as intangible assets and amortised over their useful life from the point at which the management
information system is ready for use.
Costs associated with maintaining in-use software programmes are recognised as an expense as incurred.
2.9.3 Other intangible assets
Intangible assets acquired as part of a business combination are carried initially at fair value. Following initial recognition intangible assets are
carried at cost less accumulated amortisation and any impairment in value. Intangible assets with a finite life have no residual value and are
amortised on a straight-line basis over their expected useful lives, with charges included in administrative expenses as follows:
• order back log: within three months
• existing customer relationships: 10-15 years
• tools and technology: seven years.
The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may
not be recoverable and expected useful lives are reviewed on a yearly basis.
2.9.4 Goodwill
Business combinations are accounted for under IFRS 3 Business Combinations using the acquisition method. Any excess of the cost of the
business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities is recognised in
the Consolidated Balance Sheet as goodwill and is not amortised. Any goodwill arising on the acquisition of equity-accounted entities is included
within the cost of those entities.
After initial recognition, goodwill is stated at cost less any accumulated impairment losses, with the carrying value being reviewed for impairment
at least annually and whenever events or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill is allocated to the related CGU monitored by Management, usually at business Segment level or statutory
Company level as the case may be. Where the recoverable amount of the CGU is less than its carrying amount, including goodwill, an impairment
loss is recognised in the Consolidated Income Statement.
2.10 Inventories
Inventories are carried at the lower of weighted average cost and net realisable value after making allowance for any obsolete or slow-moving
items. Costs include those incurred in bringing each product to its present location and condition, on a first-in, first-out basis.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.
2.11 Financial assets
Financial assets are recognised at their fair value, which initially equates to the sum of the consideration given and the directly attributable
transaction costs associated with the investment. Subsequently, the financial assets are measured at either amortised cost or fair value,
depending on their classification under IFRS 9. The Group currently holds only debt instruments. The classification of these debt instruments
depends on the Group’s business model for managing the financial assets and the contractual terms of the cash flows.
2.11.1 Trade and other receivables
Trade receivables, which generally have 30- to 90-day credit terms, are initially recognised and carried at their original invoice amount less an
allowance for any uncollectable amounts. The business model for trade receivables is that they are held for the collection of contractual cash
flows, therefore they are subsequently measured at amortised cost. The trade receivables are derecognised on receipt of cash from the
customer. The Group sometimes uses debt factoring, without recourse, to manage liquidity and, as a result, the business model for factored trade
receivables is that they are not held for the collection of contractual cash flows. As a result, subsequent to initial recognition, they are measured
at fair value through other comprehensive income (except for the recognition of impairment gains and losses and foreign exchange gains and
losses, which are recognised in profit or loss).
Factored trade receivables are derecognised on receipt of cash from the factoring party. Given the short lives of the trade receivables, there are
generally no material fair value movements between initial recognition and the derecognition of the receivable.
The Group assesses for doubtful debts (impairment) using the expected credit losses model as required by IFRS 9. For trade receivables, the
Group applies the simplified approach, which requires expected lifetime losses to be recognised from the initial recognition of the receivables.
Material or high-risk balances are reviewed and provided for individually based on a number of factors including:
• the financial strength of the customer;
• the level of default that the Group has suffered in the past;
• the age of the receivable outstanding; and
• the Group’s trading experience with that customer.
160 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 2.11.2 Cash and cash equivalents
Cash and short-term deposits in the Consolidated Balance Sheet comprise cash at bank and in hand, and short-term deposits with an original
maturity of three months or less. Cash is held for the collection of contractual cash flows which are solely payments of principal and interest and
therefore is measured at amortised cost subsequent to initial recognition.
For the purpose of the Consolidated Cash Flow Statement, cash and cash equivalents consist of cash and short-term deposits as defined above,
net of outstanding bank overdrafts, where the overdrafts are repayable on demand and are part of the Group’s cash management.
2.12 Financial liabilities
Financial liabilities are initially recognised at their fair value and, in the case of loans and borrowings (including credit facility), net of directly
attributable transaction costs.
The subsequent measurement of financial liabilities is at amortised cost, unless otherwise described below:
2.12.1 Provisions (excluding restructuring provision)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is
used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
Customer contract provisions
Management monitors continually the financial performance of contracts, and where there are indicators that a contract could result in a
negative margin, the future financial performance of that contract will be reviewed in detail. If, after further financial analysis, the full financial
consequence of the contract can be reliably estimated, and it is determined that the contract is potentially loss-making, then the best estimate
of the losses expected to be incurred until the end of the contract will be provided for.
In establishing if future costs are forecast to exceed the future revenue, Management will take into account the anticipated inflationary impact
on the cost base, offset by any rights to increase pricing under Cost of Living Adjustment (COLA) clauses that have been incorporated in the
customer contract.
The Group applies IAS 37 – ‘Provisions, Contingent Liabilities and Contingent Assets‘ in its assessment of whether contracts are considered
onerous and in subsequently estimating the provision. The Group’s approach is to apply the Full cost approach which considers total estimated
costs (i.e. directly attributable variable costs and fixed allocated costs) as included in the assessment of whether the contract is onerous or not
and in the measurement of the provision.
A provision for onerous contracts is made as soon as a loss is foreseen and is measured at the present value of the lower of the expected cost of
terminating the contract and the expected net cost of continuing with the contract, which is determined based on incremental costs necessary
to fulfil the obligation under the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated
with that contract.
2.12.2 Restructuring provisions
The Group recognises a restructuring provision when there is a programme planned and controlled by Management that changes materially the
scope of the business or the manner in which it is conducted.
Further to the Group’s general provision recognition policy, a restructuring provision is only considered when the Group has a detailed formal plan
for the restructuring identifying, as a minimum: the business or part of the business concerned; the principal locations affected; the location,
function and approximate number of employees who will be compensated for terminating their services; the expenditures that will be undertaken;
and when the plan will be implemented. The Group will only recognise a specific restructuring provision once those affected have a valid
expectation that the Group will carry out the restructuring created by either the commencement of the restructuring implementation plan or
the announcement of its main features to those affected by it.
The Group only includes incremental costs associated directly with the restructuring within the restructuring provisions, such as employee
termination benefits and consulting fees. The Group specifically excludes from recognition in a restructuring provision any costs associated with
ongoing activities such as the costs of training or relocating employees that are redeployed within the business and costs for employees who
continue to be employed in ongoing operations, regardless of the status of these operations post-restructure.
2.12.3 Pensions and other post-employment benefits
The Group operates a defined contribution pension scheme available to all UK employees and similar schemes are operating, as appropriate for
the jurisdiction, for North America and Germany. Contributions are recognised as an expense in the Consolidated Income Statement as they
become payable in accordance with the rules of the scheme. There are no material pension schemes within the Group’s overseas operations.
The Group has an obligation to make a one-off payment to French employees upon retirement, the Indemnités de Fin de Carrière (IFC).
French employment law requires that a company pays employees a one-time contribution when, and only when, the employee leaves the
company on retirement at the mandatory age. This is a legal requirement for all businesses which incur the obligation upon departure, due to
retirement, of an employee.
Computacenter plc Annual Report and Accounts 2022 | 161
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
2 Summary of significant accounting policies continued
Typically, the retirement benefit is based on length of service of the employee and his or her salary at retirement. The amount is set via a legal
minimum, but the retirement premiums can be improved by the collective agreement or employment contract in some cases. For Computacenter’s
French employees, the payment is based on accrued service and ranges from one month of salary after five years of service to 9.4 months of
salary after 47 years of service.
If the employee leaves voluntarily at any point before retirement, all liability is extinguished, and any accrued service is not transferred to any
new employment.
Management continues to account for this obligation according to IAS 19 (revised). Refer to note 33 for further disclosure.
2.13 Derecognition of financial assets and liabilities
2.13.1 Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised where:
• the rights to receive cash flows from the asset have expired; or
• the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without material delay
to a third party under a pass-through arrangement; or
• the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks and rewards
of the asset, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of
the asset.
2.13.2 Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.
2.14 Derivative financial instruments and hedge accounting
The Group uses foreign currency forward contracts to hedge its foreign currency risks associated with foreign currency fluctuations affecting
cash flows from forecast transactions and unrecognised firm commitments.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply
hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of both
the hedging instrument and the hedged item or transaction and then the economic relationship between the two, including whether the hedging
instrument is expected to offset changes in cash flow of the hedged item. Such hedges are expected to be highly effective in achieving offsetting
changes in cash flows. The Group designates the full change in the fair value of the forward contract (including forward points) as the hedging
instrument. Forward contracts are initially recognised at fair value on the date that the contract is entered into and are subsequently
remeasured at fair value at each reporting date. The fair value of forward currency contracts is calculated by reference to current forward
exchange rates for contracts with similar maturity profiles. Forward contracts are recorded as assets when the fair value is positive and as
liabilities when the fair value is negative.
For the purposes of hedge accounting, hedges are classified as cash flow hedges when hedging the exposure to variability in cash flows that is
either attributable to a particular risk associated with a recognised asset or liability, a highly probable forecast transaction, or the foreign
currency risk in an unrecognised firm commitment.
Cash flow hedges that meet the criteria for hedge accounting are accounted for as follows: the effective portion of the gain or loss on the hedging
instrument is recognised directly in other comprehensive income in the cash flow hedge reserve, while any ineffective portion is recognised
immediately in the Consolidated Income Statement in administrative expenses.
Amounts recognised within the Consolidated Statement of Comprehensive Income are transferred to the Consolidated Income Statement, within
administrative expenses, when the hedged transaction affects the Consolidated Income Statement, such as when the hedged financial expense
is recognised.
If the forecast transaction or firm commitment is no longer expected to occur, the cumulative gain or loss previously recognised in equity is
transferred to the Consolidated Income Statement within administrative expenses. If the hedging instrument matures or is sold, terminated or
exercised without replacement or rollover, any cumulative gain or loss previously recognised within the Consolidated Statement of
Comprehensive Income remains within the Consolidated Statement of Comprehensive Income until after the forecast transaction or firm
commitment affects the Consolidated Income Statement.
Any other gains or losses arising from changes in fair value on forward contracts are taken directly to administrative expenses in the
Consolidated Income Statement.
2.15 Taxation
2.15.1 Current tax
Current tax assets and liabilities for the current and prior years are measured at the amount expected to be recovered from or paid to the
tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the
balance sheet date.
162 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 2.15.2 Deferred income tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts
in the Consolidated Financial Statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of goodwill or from an asset or liability in a transaction that is not a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
• in respect of taxable temporary differences associated with investments in subsidiaries, associates and joint ventures, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available in the future against which
the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the related
asset is realised or liability is settled, based on tax rates and laws enacted, or substantively enacted, at the balance sheet date.
Income tax is charged or credited directly to the Consolidated Statement of Comprehensive Income if it relates to items that are credited or
charged to the Consolidated Statement of Comprehensive Income. Otherwise, income tax is recognised in the Consolidated Income Statement.
2.16 Share-based payment transactions
Employees (including Executive Directors) of the Group can receive remuneration in the form of share-based payment transactions, whereby
employees render services in exchange for shares or rights over shares (equity-settled transactions).
The cost of equity-settled transactions with employees is measured by reference to the fair value of the award at the date at which they are
granted. The fair value is determined by utilising an appropriate valuation model, further details of which are given in note 30. In valuing equity-
settled transactions, no account is taken of any performance conditions, as none of the conditions set are market-related.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting date).
The cumulative expense recognised for equity-settled transactions at each reporting date, until the vesting date, reflects the extent to which the
vesting period has expired and the Directors’ best estimate of the number of equity instruments that will ultimately vest. The Consolidated
Income Statement charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of
that period. As the schemes do not include any market-related performance conditions, no expense is recognised for awards that do not
ultimately vest.
Movements in the estimated employer’s National Insurance liability related to the awards, carried on the Consolidated Balance Sheet, are
recognised in the Consolidated Income Statement.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings per share (see note 13).
The Group has an employee share trust for the granting of non-transferable options to Executive Directors and senior Management. Shares in
the Group held by the employee share trust are treated as investment in own shares and are recorded at cost as a deduction from equity
(see note 29).
2.17 Own shares held
Computacenter plc shares held by the Group are classified in shareholders’ equity as ‘own shares held’ and are recognised at cost. Consideration
received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being
taken to reserves. No gain or loss is recognised in the performance statements on the purchase, sale, issue or cancellation of equity shares.
2.18 Fair value measurement
The Group measures certain financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability,
assuming that market participants act in their economic best interest.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
Fair value-related disclosures for financial instruments that are measured at fair value or where fair values are disclosed, are summarised
in note 27.
2.19 IAS 20 – Accounting for government grants and disclosure of government assistance
IAS 20 defines government grants as assistance by government in the form of transfers of resources to an entity, in return for past or future
compliance with certain conditions relating to the operating activities of the entity. If the conditions are met, then a company recognises
government grants in profit or loss within administration expenses, in line with its recognition of the expenses that the grants are intended
to compensate.
The Group has recognised unconditional government grants relating to short-term schemes introduced by governments within Europe and the
United States as a result of Covid-19 crisis for the purpose of protecting employment. These grants compensate the Group for expenses incurred
and are recognised in the Consolidated Income Statement on a systematic basis in the periods in which the expenses are recognised.
Computacenter plc Annual Report and Accounts 2022 | 163
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
3 Critical accounting estimates and judgements
The preparation of the Consolidated Financial Statements requires Management to exercise judgement in applying the Group’s accounting
policies. It also requires the use of estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses.
Due to the inherent uncertainty in making these critical judgements and estimates, actual outcomes could be different.
During the year, Management reconsidered the critical accounting estimates and judgements for the Group. This process included reviewing the
last reporting period’s disclosures, the key judgements required on the implementation of forthcoming standards and the current period’s
challenging accounting issues. Where Management deemed an area of accounting to be no longer a critical estimate or judgement, an explanation
for this decision is found in note 3.3 to the Consolidated Financial Statements.
3.1 Critical estimates
Estimates and underlying assumptions are reviewed on an ongoing basis, with revisions recognised in the year in which the estimates are revised
and in any future years affected. The are no areas involving significant risk resulting in a material adjustment to the carrying amounts of assets
and liabilities within the next financial year.
3.2 Critical judgements
Judgements made by Management in the process of applying the Group’s accounting policies, which have the most significant effect on the
amounts recognised in the Consolidated Financial Statements, are as follows:
3.2.1 Technology Sourcing principal versus agent recognition
Management is required to exercise its judgement in the classification of certain revenue contracts for Technology Sourcing revenue recognition
on either an agent or principal basis.
Because the identification of the principal in a contract is not always clear, Management will make a determination by evaluating the nature of our
promise to our customer as to whether it is a performance obligation to pass control of the specified goods or services ourselves, in that we are
the principal, or to arrange for those goods or services to be provided by the other party, where we are the agent.
Following its meeting that concluded on 1 December 2021, the IFRS Interpretation Committee (the Committee) published a tentative agenda
decision in response to a submission from a valued added reseller to determine whether an entity should treat revenue from the resale of
standard software licences on a principal or agent recognition basis under IFRS 15 Revenue from Contracts with Customers (IFRS 15).
The Committee did not reach a definitive conclusion on the submission received, as it maintained that an entity should apply judgement in making
its assessment under the principles contained within IFRS 15, using the specific facts and circumstances relevant to the entity and the transactions
or contracts entered into. However, the Committee did provide a number of discrete guidance points on the application of various control criteria
or indicators that entities should consider under their IFRS 15 agent and principal recognition criteria processes that specifically relate to the
resale of standard software and have an impact on those resellers within the industry. Computacenter plc included a preliminary assessment
of the impact of the tentative agenda decision within note 3.2.1 of the 2021 Annual Report and Accounts.
At its 20 April 2022 meeting, the Committee finalised and approved its agenda decision. The International Accounting Standards Board, at its
May 2022 meeting, did not object to the agenda decision.
The discussion and guidance within the approved agenda decision provides direction for the implementation of the principal or agent elements
of IFRS 15 Revenue from Contracts with Customers for value-added resellers where standard standalone software and implicitly, due to the
similarity in the transactional fact pattern, resold services such as maintenance contracts, extended warranties or support contracts, that are
sourced from a third-party vendor and resold to a customer. As noted in our 2021 Annual Report and Accounts the approved agenda decision has
impacted our existing treatment for the principal or agent recognition of these revenue streams, and whether they are recorded on a gross or net
basis within revenue. Previously such sales were recognised on a principal or gross basis, apart from in certain limited instances as described in
note 3.2.1 of the 2021 Annual Report and Accounts, with gross invoiced income reported as revenue, and costs of the resold software or services
presented as part of cost of goods sold.
The Group has now completed its assessment of the impacts of the agenda decision and revised its accounting policies accordingly. Standalone
revenue from standard software sales is now recognised on an agency or net basis where the margin earned on the contract is recognised as
revenue with zero cost of goods sold. Other software revenues, particularly where the Group has performed configuration or customisation
services, as part of the software sales agreement, or where the software is included alongside hardware elements within a pre-configured
bundle from the vendor and resold within the pre-set bundle, continue to be recognised on a principal basis. Similarly, the Group has determined
that third-party services agreements resold on a standalone basis are also recognised on an agent basis due to the similar fact pattern of the
transaction to that of software sales unless these are also included alongside hardware elements within a pre-configured bundle from the
vendor and resold within the pre-set bundle.
Management continues to assess the classification of other revenue contracts for Technology Sourcing revenue recognition on either an agent or
a principal basis. Because the identification of the principal in a contract is, on occasion, not always clear and the level of judgement required can,
in small number of instances, be high with the outcomes of assessments finely balanced, Management makes a determination by evaluating the
nature of our promise to our customer as to whether it is a performance obligation to provide the specified goods or services ourselves, in that
we are the principal, or to arrange for those goods or services to be provided by the other party, where we are the agent.
We determine whether we are a principal or an agent for each specified good or service promised to the customer by evaluating the nature of our
promise to the customer against the following non-exhaustive list of indicators that a performance obligation could involve an agency relationship:
• we do not control each specified good or service before that good or service is delivered to the customer;
• the vendor retains primary responsibility for fulfilling the sale;
• we take no inventory risk before or after the goods have been ordered, during shipping or on return;
• we do not have discretion to establish pricing for the vendor’s goods, limiting the benefit we can receive from the sale of those goods; and
• our consideration is in the form of a, usually predetermined, commission.
164 | Computacenter plc Annual Report and Accounts 2022
Financial Statements As a result, the Group continues to report all hardware elements of its Technology Sourcing business, along with its internally provided Managed
Services and Professional Services revenues, on a principal basis.
The Group will continue to report Technology Sourcing Gross Invoiced Income and aggregated with our Services revenues as Total Group Gross
Invoiced Income as an Alternative Performance Measure.
The changes in the Group’s revenue accounting policies to reflect the agenda decision of the Committee have resulted in the following impact
on the current year Financial Statements and, in accordance with IAS8, a retrospective restatement of the relevant prior year reported
Financial Statements:
• Revenue and cost of sales decreased by the value of revenue assessed as being recognised on an agency basis by £2,581.7 million in 2022
(2021: £1,889.0 million). The retrospective application of the agenda decision resulted in a reduction of previously reported revenue and cost of
sales for 2021 by £1,691.3 million.
• Gross profit, operating profit, and profit before and after taxes have remained unchanged in all periods. As a result, there is no impact on basic
and diluted earnings per share.
Year to 31 December 2021
Previous Accounting Policy
Revised Accounting Policy
Adjustment to
gross invoiced
income for
income
recognised as
agent
£m
197.7
Gross invoiced
income
£m
6,923.5
Adjustment to
gross invoiced
income for
income
recognised as
agent
£m
1,889.0
Revenue
£m
5,034.5
Revenue
£m
6,725.8
Gross invoiced
income
£m
6,923.5
3.2.2 Bill and hold
The Group generates some of its revenue through its bill and hold arrangements with its customers. These arise when the customer is invoiced
but the product is not shipped to the customer until a later date, in accordance with the customer’s request in a written agreement. In order to
determine the appropriate timing of revenue recognition, it is assessed whether control has transferred to the customer.
A bill and hold arrangement is only put in place when a customer lacks the physical space to store the product or the product previously ordered is
not yet needed in accordance with the customer’s schedule and the customer wants to guarantee supply of the product. In order to determine the
bill and hold arrangements, the following criteria must be met:
a) the reason for the bill and hold arrangement must be substantive (for example: the customer has requested the arrangement);
b) the product must be identified separately as belonging to the customer;
c) the product currently must be ready for physical transfer to the customer; and
d) the entity cannot have the ability to use the product or to direct it to another customer.
Judgement is required to determine if all of the criteria (a) to (d) have been met, to recognise a bill and hold sale. This is determined by
segregation and readiness of inventory and the review and approval of all customer requests, in order to assess whether the accounting policy
had been correctly applied to recognise a bill and hold sale.
£386.9 million of product sold is held by the Group for bill and hold transactions as at 31 December 2022 (2021: £281.9 million).
3.2.3 Exceptional items
Exceptional items remain a core focus of Management with the alternative performance measure regulations providing further guidance
in this area.
Management is required to exercise its judgement in the classification of certain items as exceptional and outside of the Group’s adjusted1
results. The overall goal of Management is to present the Group’s underlying performance without distortion from one-off or non-trading events
regardless of whether they are favourable or unfavourable to the underlying result.
To achieve this, Management has considered the materiality, infrequency and nature of the various items classified as exceptional this year
against the requirements and guidance provided by IAS 1, our Group accounting policies and regulatory interpretations and guidance.
In reaching its conclusions, Management considers not only the effect on the overall underlying Group performance but also where an item is
critical in understanding the performance of its component Segments which is of relevance to investors and analysts when assessing the Group
result and its future prospects as a whole.
Further details of the individual exceptional items, and the reasons for their disclosure treatment, are set out in note 8.
3.3 Change in critical estimates and critical judgements
During the year, Management reassessed the critical estimates and critical judgements.
Exceptional items have been included as a critical judgement since these are a core focus of Management when reporting alternative
performance measures and require consideration of materiality, infrequency and nature of the items.
Apart from change discussed above, the critical accounting estimates and judgements reported in the Group’s 2021 Annual Report and Accounts
are unchanged.
Computacenter plc Annual Report and Accounts 2022 | 165
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
4 Segment information
The Segment information is reported to the Board and the Chief Executive Officer. The Chief Executive Officer is the Group’s Chief Operating
Decision Maker (CODM). The operating Segments remain unchanged from those reported at 31 December 2021.
The Segmental reporting structure is the basis on which internal reports are provided to the Chief Executive Officer, as the CODM, for assessing
performance and determining the allocation of resources within the Group, in accordance with IFRS 8.25. Segmental performance is measured
based on external revenues, gross profit, adjusted1 operating profit and adjusted1 profit before tax. As noted on page 64, Central Corporate Costs
continue to be disclosed as a separate column within the Segmental note.
Segmental performance for the years ended 31 December 2022 and 31 December 2021 were as follows:
UK
£m
Germany
£m
France
£m
North
America
£m
International
£m
Central
Corporate
Costs
£m
1,864.2
1,704.7
606.7
3,131.7
174.3
(1,055.1)
809.1
(551.6)
1,153.1
(170.9)
435.8
(773.8)
2,357.9
147.5
312.8
460.3
1,269.40
259.2
(178.7)
80.5
2.6
83.1
315.7
374.7
690.4
1,843.5
325.1
(184.2)
140.9
(2.2)
138.7
41.7
136.4
178.1
613.9
76.7
(69.6)
7.1
(0.8)
6.3
122.5
26.9
149.4
2,507.3
238.3
(185.3)
53.0
(4.2)
48.8
(30.3)
144.0
9.2
83.2
92.4
236.4
47.8
(36.5)
11.3
(0.8)
10.5
–
–
–
–
–
–
–
–
(23.7)
(23.7)
–
(23.7)
Year ended 31 December 2022
Revenue
Technology Sourcing revenue
Gross invoiced income
Adjustment to gross invoiced income for
income recognised as agent
Total Technology Sourcing revenue
Services revenue
Professional Services
Managed Services
Total Services revenue
Total revenue
Results
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit/(loss)
Net interest
Adjusted1 profit/(loss) before tax
Exceptional items:
– unwinding of discount relating to
acquisition of a subsidiary
– costs relating to acquisition of a subsidiary
Total exceptional items
Amortisation of acquired intangibles
Profit before tax
The reconciliation of adjusted1 operating profit to operating profit as disclosed in the Consolidated Income Statement is as follows:
Year ended 31 December 2022
Adjusted1 operating profit
Amortisation of acquired intangibles
Exceptional items
Operating profit
Total
£m
7,481.6
(2,581.7)
4,899.9
636.6
934.0
1,570.6
6,470.5
947.1
(678.0)
269.1
(5.4)
263.7
(2.0)
(1.8)
(3.8)
(10.9)
249.0
Total
£m
269.1
(10.9)
(1.8)
256.4
166 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Year ended 31 December 2022
Other Segment information
Property, plant and equipment
Right-of-use assets
Intangible assets
Capital expenditure:
Property, plant and equipment
Right-of-use assets
Software
Depreciation of property, plant and
equipment
Depreciation of right-of-use assets
Amortisation of software
Share-based payments
Year ended 31 December 2021
Revenue (restated*)
Technology Sourcing revenue
Gross invoiced income
Adjustment to gross invoiced income for
income recognised as agent
Total Technology Sourcing revenue
Services revenue
Professional Services
Managed Services
Total Services revenue
Total revenue
Results
Gross profit
Adjusted1 administrative expenses
Adjusted1 operating profit/(loss)
Net interest
Adjusted1 profit/(loss) before tax
Amortisation of acquired intangibles
Profit before tax
Germany
£m
France
£m
North
America
£m
International
£m
Central
Corporate
Costs
£m
40.7
53.8
17.5
7.8
22.6
0.5
6.8
30.2
0.4
1.9
5.6
18.2
10.4
2.2
4.8
0.3
2.2
4.9
0.1
0.1
11.7
22.5
250.6
3.9
10.5
0.1
3.3
5.5
1.4
0.7
6.5
14.6
14.1
2.6
4.5
0.4
2.3
5.3
0.4
–
–
–
–
–
–
–
–
–
–
–
UK
£m
29.6
10.3
49.5
7.2
2.6
10.5
6.9
4.6
5.7
5.9
UK
£m
Germany
£m
France
£m
North
America
£m
International
£m
Central
Corporate
Costs
£m
1,581.5
1,427.7
481.4
1,869.2
112.8
(638.3)
943.2
(485.1)
942.6
154.6
327.6
482.2
1,425.4
268.2
(165.3)
102.9
–
102.9
273.8
348.6
622.4
1,565.0
312.0
(174.2)
137.8
(2.7)
135.1
(98.2)
383.2
38.0
134.0
172.0
555.2
68.1
(64.6)
3.5
(0.8)
2.7
(642.9)
1,226.3
77.5
18.6
96.1
1,322.4
180.2
(149.2)
31.0
(2.7)
28.3
(24.5)
88.3
8.5
69.7
78.2
166.5
39.3
(28.0)
11.3
(1.0)
10.3
–
–
–
–
–
–
–
–
(23.7)
(23.7)
(23.7)
Total
£m
94.1
119.4
342.1
23.7
45.0
11.8
21.5
50.5
8.0
8.6
Total
£m
5,472.6
(1,889.0)
3,583.6
552.4
898.5
1,450.9
5,034.5
867.8
(605.0)
262.8
(7.2)
255.6
(7.6)
248.0
*
The comparative information is restated on account of a change in accounting policy for Technology Sourcing revenue and cost of sales, see note 3. Gross profit, operating profit, and
profit before and after taxes have remained unchanged.
Computacenter plc Annual Report and Accounts 2022 | 167
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
4 Segment information continued
The reconciliation of adjusted1 operating profit to operating profit as disclosed in the Consolidated Income Statement is as follows:
Year ended 31 December 2021
Adjusted1 operating profit
Amortisation of acquired intangibles
Operating profit
Other Segment information
Property, plant and equipment
Right-of-use assets
Intangible assets
Capital expenditure:
Property, plant and equipment
Right-of-use assets
Software
Depreciation of property, plant and
equipment
Depreciation of right-of-use assets
Amortisation of software
Share-based payments
UK
£m
Germany
£m
France
£m
North
America
£m
International
£m
Central
Corporate
Costs
£m
30.4
12.5
44.6
5.2
3.0
6.1
10.3
3.2
5.6
7.4
37.7
77.2
16.5
4.4
52.3
0.2
6.2
31.7
0.6
2.1
5.3
17.4
10.2
2.1
8.0
0.1
3.1
4.4
0.1
0.3
9.2
15.0
191.4
3.6
4.1
4.6
2.9
4.8
1.2
0.7
7.4
16.0
11.0
3.5
2.8
0.5
2.3
6.5
0.2
0.1
–
–
–
–
–
–
–
–
–
–
Total
£m
262.8
(7.6)
255.2
Total
£m
90.0
138.1
273.7
18.8
70.2
11.5
24.8
50.6
7.7
10.6
Charges for the amortisation of acquired intangibles (where initial recognition was an exceptional item or a fair value adjustment on acquisition)
are excluded from the calculation of adjusted1 operating profit. This is because these charges are based on judgements about their value and
economic life, are the result of the application of acquisition accounting rather than core operations, and whilst revenue recognised in the
Consolidated Income Statement does benefit from the underlying asset that has been acquired, the amortisation costs bear no relation to the
Group’s underlying ongoing operational performance. In addition, amortisation of acquired intangibles is not included in the analysis of Segment
performance used by the CODM.
Information about major customers
Included in revenues arising from the North American Segment are revenues of approximately £963.1 million (2021: £651.7 million) which arose
from sales to the Group’s largest customer.
5 Revenue
Revenue recognised in the Consolidated Income Statement is analysed as follows:
Revenue by type
Gross invoiced income
Adjustment to gross invoiced income for income recognised as agent
Technology Sourcing revenue
Services revenue
Professional Services
Managed Services
Total Services revenue
Total revenue
*
The comparative information is restated on account of a change in accounting policy for Technology Sourcing revenue and cost of sales, see note 3.
2022
£m
2021
(Restated*)
£m
7,481.6
(2,581.7)
4,899.9
636.6
934.0
1,570.6
6,470.5
5,472.6
(1,889.0)
3,583.6
552.4
898.5
1,450.9
5,034.5
168 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Contract balances
The following table provides the information about contract assets and contract liabilities from contracts with customers.
Trade receivables
Contract assets, which are included in prepayments
Contract assets, which are included in accrued income
Contract liabilities, which are included in deferred income
Note
20
31 December
2022
£m
1,666.9
23.7
135.2
273.2
31 December
2021
£m
1,239.8
20.2
148.1
257.6
The prepayments balance within the Consolidated Balance Sheet of £149.9 million consists of £23.7 million contract assets and £126.2 million
other prepayments.
The Group has implemented an expected credit loss impairment model with respect to contract assets using the simplified approach. Contract
assets have been grouped on the basis of their shared risk characteristics and a provision matrix has been developed and applied to these
balances to generate the loss allowance. The majority of these contract asset balances are with blue chip customers and the incidence of credit
loss is low. There has therefore been no material adjustment to the loss allowance under IFRS 9. Specific provisions are made against material
or high-risk balances based on trading experience or where doubt exists about the counterparty’s ability to pay. The expected credit losses on
contract assets which are within prepayments and accrued income are considered to be immaterial.
Significant changes in contract assets and liabilities
Contract assets are balances due from customers under long-term contracts as work is performed and therefore a contract asset is recognised
over the period in which the performance obligation is fulfilled. This represents the Group’s right to consideration for the services transferred to
date. Amounts are generally reclassified to trade and other receivables when these have been certified or invoiced to a customer. Refer to
note 2.11.1 for credit terms of trade receivables.
The increase in trade receivables mainly in the UK, Germany and North American Segments is driven by growth in revenue, as the Group
experienced a particularly strong fourth quarter of the year.
Win fees, deferred contract costs and fulfilment costs are included in the prepayments balance above. The Consolidated Income Statement
impact of the win fees was a recognition of a net income in 2022 of £2.7 million, with a corresponding cost to tax of £0.6 million for the year. As at
31 December 2022, the win fee balance was £11.4 million. The Consolidated Income Statement impact of fulfilment costs was a recognition of a
net income in 2022 of £3.1 million, with a corresponding tax of charge of £1.1 million for the year.
As at 31 December 2022, the fulfilment costs balance was £4.9 million. No impairment loss was recorded for win fees or fulfilment costs during
the year.
Revenue recognised in the reporting period from accrued income was £21.8 million, with a debit to foreign exchange of £8.9 million. No impairment
loss was recorded for accrued income during the year.
Revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period was £178.4 million.
No revenue was recognised in the reporting period from performance obligations that were satisfied or partially satisfied in previous periods.
Remaining performance obligations (work in hand)
Contracts which have remaining performance obligations as at 31 December 2022 and 31 December 2021 are set out in the table below. The table
below discloses the aggregate transaction price relating to those remaining performance obligations, excluding both (a) amounts relating to
contracts for which revenue is recognised as invoiced and (b) amounts relating to contracts where the expected duration of the ongoing
performance obligation is one year or less.
Managed Services
As at 31 December 2022
As at 31 December 2021
Less than
one year
£m
729.1
720.4
One to
two years
£m
513.2
466.4
Two to
three years
£m
374.0
315.8
Three to
four years
£m
266.7
209.0
Four years
and beyond
£m
226.8
226.7
Total
£m
2,109.8
1,938.3
The duration of most contracts is between one and five years. However some contracts will vary from these typical lengths. Revenue is typically
earned over these varying timeframes. However the majority of the revenue noted above is expected to be earned in the short term.
Computacenter plc Annual Report and Accounts 2022 | 169
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
6 Group operating profit
This is stated after charging/(crediting):
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Loss/(Gain) on disposal of property, plant and equipment
Amortisation of software
Loss on disposal of intangibles
Amortisation of acquired intangible assets
Severance costs
Government grants
Loss/(Gain) on net foreign currency differences
Costs of inventories recognised as an expense (restated*)
2022
£m
21.5
50.5
0.5
8.0
–
10.9
1.9
(1.2)
0.4
2021
(restated*)
£m
24.8
50.6
(1.3)
7.7
0.5
7.6
9.6
(1.1)
(0.3)
4,270.0
3,063.1
*
The comparative information is restated on account of a change in accounting policy for Technology Sourcing revenue and cost of sales, see note 3. Gross profit, operating profit,
and profit before and after taxes have remained unchanged.
7 Auditor’s remuneration
Auditor’s remuneration:
– Audit of the Financial Statements
– Audit of subsidiaries
Total audit fees
Audit-related assurance services including the review of the Interim Report and Accounts
Taxation compliance services
Total non-audit services
Total fees
2022
£m
2021
£m
0.2
2.3
2.5
0.1
–
0.1
2.6
0.1
1.7
1.8
0.1
0.1
0.2
2.0
Audit-related assurance services represent the half year review and assurance over tax, both performed by the Group’s auditor KPMG LLP.
The Pivot audit for the year ended 31 December 2022 was performed by EY Canada for a fee of £0.3 million (2021: £0.5 million).
Other non-audit services and certain permissible taxation compliance services in 2021 were provided by EY, auditor of a North American subsidiary.
8 Exceptional items
Operating profit
Costs relating to acquisition of a subsidiary
Exceptional operating loss
Interest cost relating to acquisition of a subsidiary
Loss on exceptional items before taxation
Income tax
Tax credit relating to acquisition of a subsidiary
Loss on exceptional items after taxation
2022
£m
1.8
1.8
2.0
3.8
(0.2)
3.6
2021
£m
–
–
–
–
–
–
Included within 2022 are the following exceptional items:
• An exceptional cost during the year of £1.8 million resulted from costs directly relating to the acquisition of BITS and Emerge. These costs primarily
related to advisor’s fees and seller’s costs that were paid on completion of the transaction. As these costs are non-operational and unlikely to
recur they have been classified as exceptional items, consistent with our prior-year treatment of acquisition costs on material transactions.
• A further £2.0 million relating to the unwinding of the discount on the contingent payment for the purchase of BITS have been classified as
exceptional interest costs.
• A credit of £0.2 million arising from the tax benefit on the BITS exceptional acquisition costs has been recognised as tax on the above exceptional
items. As this credit is related to the acquisition and not operational activity within BITS and is of a one-off nature, it was classified as an
exceptional tax item.
170 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 9 Employee costs
The average monthly number of employees (including Executive Directors) during the year was made up as follows:
UK
Germany
France
North America
International
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Share-based payments
Contributions to defined contribution plans
Expenses relating to defined benefit plans (note 33)
Share-based payments arise from transactions accounted for as equity-settled share-based payment transactions.
10 Finance income
Bank interest received
Other interest received
11 Finance costs
Interest paid on bank loans and overdraft
Interest paid on credit facility
Interest paid on lease liabilities
Exceptional Interest cost relating to acquisition of a subsidiary (note 8)
Other interest paid
2022
No.
4,434
6,556
2,152
1,591
3,975
18,708
2022
£m
999.5
142.9
8.6
22.6
2.2
1,175.8
2022
£m
1.8
0.6
2.4
2022
£m
0.8
1.4
4.9
2.0
0.7
9.8
2021
No.
4,294
6,338
2,385
1,359
3,120
17,496
2021
£m
906.3
135.1
10.6
20.9
1.6
1,074.5
2021
£m
0.2
0.1
0.3
2021
£m
0.9
1.2
5.2
–
0.2
7.5
Computacenter plc Annual Report and Accounts 2022 | 171
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
12 Income tax
a) Tax on profit from ordinary activities
Tax charged in the Consolidated Income Statement
Current income tax
UK corporation tax
Foreign tax:
– operating results before exceptional items
– exceptional items
Total foreign tax
Adjustments in respect of prior years
Total current income tax
Deferred income tax
Operating results before exceptional items:
– origination and reversal of temporary differences
– change in tax rates
– adjustments in respect of prior years
Total deferred income tax
Tax charge in the Consolidated Income Statement
b) Reconciliation of the total tax charge
Profit before income tax
At the UK standard rate of corporation tax of 19 per cent (2021: 19 per cent)
Expenses not deductible for tax purposes
Non-deductible element of share-based payment charge
Adjustments in respect of prior years
Effect of different tax rates of subsidiaries operating in other jurisdictions
Change in tax rate
Other differences
Overseas tax not based on earnings
Previously unrecognised tax losses used to reduce deferred income tax expense
Previously unrecognised tax losses used to reduce current tax expense
Tax effect of income not taxable in determining taxable profit
At effective income tax rate of 26.0 per cent (2021: 24.8 per cent)
2022
£m
15.1
49.0
(0.2)
48.8
(5.1)
58.8
1.0
0.6
4.4
6.0
64.8
2022
£m
249.0
47.3
1.2
2.3
(0.7)
17.6
0.6
0.5
1.1
(3.2)
(0.9)
(1.0)
64.8
2021
£m
23.8
45.1
–
45.1
0.2
69.1
(4.2)
(3.3)
(0.1)
(7.6)
61.5
2021
£m
248.0
47.1
0.3
0.1
0.1
16.2
(3.3)
0.3
1.6
–
–
(0.9)
61.5
Taxation for subsidiaries operating in other jurisdictions is calculated at the rates prevailing in the respective jurisdictions, these being a blended
rate of 32 per cent in Germany (2021: 32 per cent) and a blended (Federal/State) rate of 25 per cent in the US (2021: 27 per cent), which mainly
drive the ‘Effect of different tax rates of subsidiaries operating in other jurisdictions’ above.
172 | Computacenter plc Annual Report and Accounts 2022
Financial Statements c) Tax losses
Deferred income tax assets of £3.9 million (2021: £0.6 million) have been recognised in respect of losses carried forward, primarily in France.
In considering the probable utilisation of the carried forward tax losses, and therefore the likely recoverability of these assets, the Group makes
an assessment based upon a reasonably foreseeable timeframe, being typically up to three years, taking into account the future expected profit
profile and business model of each relevant company or country. The reasonably foreseeable timeframe is derived based on the confidence the
Group has in the performance of these companies or countries and therefore the reliability of forecasts over the timeframe in which the asset
would be recovered. If the reasonably foreseeable timeframe is extended to five years for our French business, an additional £0.9 million of
deferred income tax asset would be recognised.
As at 31 December 2022, there were further unused tax losses across the Group of £293.5 million (2021: £295.8 million) for which no deferred
income tax asset has been recognised. Of these losses, £263.5 million (2021: £261.3 million) arise in France, £26.3 million (2021: £25.7 million) arise
in Germany and £3.7 million (2021: £8.8 million) arise in the Netherlands. No deferred tax has been recognised on these losses due to the potential
uncertainty around whether future taxable profits would be available against which these tax losses can be utilised. A significant proportion of
the losses arising in Germany have been generated in statutory entities that no longer have significant levels of trade.
The Group has other timing differences, primarily in France, of £28.7 million, for which no deferred tax asset has been recognised. These timing
differences mainly relate to the retirement benefit obligation which is of a long-term nature. The amount that would be recognised over our
reasonably foreseeable timeframe of up to three years would therefore be immaterial.
In addition, there are unutilised capital tax losses as at 31 December 2022 of £7.4 million (2021: £7.4 million) but no deferred tax asset has been
recognised as it is not considered probable that these losses will be utilised in the foreseeable future.
d) Deferred income tax
Deferred income tax as at 31 December 2022 and 31 December 2021 relates to the following:
Consolidated
Balance Sheet
Consolidated
Income Statement
Consolidated Statement
of Comprehensive Income
Deferred income tax assets/(liabilities)
Property, plant and equipment
Intangible assets
Inventories
Derivative financial instruments
Share-based payments
Tax losses carried forward
Other temporary differences
Deferred income tax (charge)/credit
Net deferred income tax asset/(liabilities)
Disclosed on the Consolidated Balance Sheet
Deferred income tax assets
Deferred income tax liabilities
Net deferred income tax asset/(liabilities)
2022
£m
(3.2)
(29.9)
3.9
1.2
6.8
3.9
7.9
(9.4)
11.3
(20.7)
(9.4)
2021
£m
2.8
(26.6)
4.4
0.2
14.6
0.6
8.4
4.4
30.2
(25.8)
4.4
2022
£m
(5.8)
(0.2)
(0.9)
–
(0.8)
3.2
(1.5)
(6.0)
2021
£m
(0.2)
0.5
3.0
–
2.6
0.1
1.6
7.6
2022
£m
–
–
–
1.0
–
–
–
1.0
2021
£m
–
–
–
0.2
–
–
–
0.2
Deferred tax is not recognised in respect of the Group’s investments in subsidiaries where Computacenter is able to control the timing of
remittance, or other realisation, of unremitted earnings and where remittance or realisation is not probable in the foreseeable future.
e) Factors affecting current and future tax charge
The main rate of UK Corporation tax for financial year 2022 is 19 per cent, as enacted in the Finance Act 2020. The March 2021 Budget announced
that a rate of 25 per cent will apply with effect from 1 April 2023, and this change was substantively enacted on 11 March 2021. The deferred
income tax in these Consolidated Financial Statements reflects this.
We are closely monitoring the Organisation for Economic Co-operation and Development’s Two Pillar Solution to address the tax challenges arising
from the Digitalisation of the Economy, which are expected to come into force on 31 December 2023. The accounting implications under IAS 12 will
be determined when the relevant legislation is available.
Computacenter plc Annual Report and Accounts 2022 | 173
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
13 Earnings per share
Earnings per share amounts are calculated by dividing profit attributable to ordinary equity holders by the weighted average number of ordinary
shares outstanding during the year (excluding own shares held).
To calculate diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive
potential shares. Share options granted to employees where the exercise price is less than the average market price of the Company’s ordinary
shares during the year are considered to be dilutive potential shares.
Profit attributable to equity holders of the Parent
Basic weighted average number of shares (excluding own shares held)
Effect of dilution:
Share options
Diluted weighted average number of shares
Basic earnings per share
Diluted earnings per share
14 Dividends paid and proposed
Amounts recognised as distributions to owners in the financial year
Equity dividends on ordinary shares:
Paid prior financial year dividend
Paid interim dividend
Proposed (not recognised as a liability as at 31 December)
Equity dividends on ordinary shares:
Proposed final dividend at financial year end
2022
£m
182.8
2022
£m
112.8
2.1
114.9
2022
pence
162.1
159.1
2022
Pence/share
2022
£m
2021
Pence/share
49.4
22.1
71.5
55.6
24.9
80.5
38.4
16.9
55.3
2021
£m
185.3
2021
£m
113.0
2.2
115.2
2021
pence
164.0
160.9
2021
£m
43.4
19.0
62.4
45.8
52.3
49.4
56.4
174 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 15 Property, plant and equipment
Cost
At 1 January 2021
Relating to acquisition of subsidiaries (note 18)
Additions
Disposals
Transfers
Foreign currency adjustment
At 31 December 2021
Relating to acquisition of subsidiaries (note 18)
Additions
Disposals
Transfers
Foreign currency adjustment
At 31 December 2022
Accumulated depreciation and impairment
At 1 January 2021
Provided during the year
Disposals
Transfers
Foreign currency adjustment
At 31 December 2021
Provided during the year
Disposals
Transfers
Foreign currency adjustment
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
At 1 January 2021
Freehold
land and
buildings
£m
Short leasehold
improvements
£m
Fixtures,
fittings,
equipment
and vehicles
£m
Property, plant
and equipment
excluding
right-of-use
assets £m
Right-of-
use assets
£m
87.0
–
–
–
(0.5)
(1.5)
85.0
–
–
–
–
1.1
86.1
44.9
2.0
–
(0.4)
0.1
46.6
2.0
–
–
0.1
48.7
37.4
38.4
42.1
33.4
–
3.5
(1.6)
–
(1.1)
34.2
0.8
2.7
(2.9)
10.7
3.0
48.5
13.3
4.5
(1.3)
–
(0.6)
15.9
4.7
(2.7)
8.0
1.9
27.8
20.7
18.3
20.1
154.9
0.3
15.3
(24.9)
(3.1)
(5.8)
136.7
0.2
21.0
(17.2)
(12.5)
5.6
133.8
110.1
18.3
(19.0)
(1.7)
(4.3)
103.4
14.8
(15.8)
(8.5)
3.9
97.8
36.0
33.3
44.8
275.3
0.3
18.8
(26.5)
(3.6)
(8.4)
255.9
1.0
23.7
(20.1)
(1.8)
9.7
268.4
168.3
24.8
(20.3)
(2.1)
(4.8)
165.9
21.5
(18.5)
(0.5)
5.9
174.3
94.1
90.0
107.0
207.3
1.4
70.2
(25.3)
–
(11.5)
242.1
0.8
45.0
(78.0)
–
12.3
222.2
77.7
50.6
(19.9)
–
(4.4)
104.0
50.5
(56.9)
–
5.2
102.8
119.4
138.1
129.6
Total
£m
482.6
1.7
89.0
(51.8)
(3.6)
(19.9)
498.0
1.8
68.7
(98.1)
(1.8)
22.0
490.6
246.0
75.4
(40.2)
(2.1)
(9.2)
269.9
72.0
(75.4)
(0.5)
11.1
277.1
213.5
228.1
236.6
The Group leases various properties, equipment and cars. Rental contracts are typically made for fixed periods of two to 10 years, but might have
extension options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease
agreements do not impose any covenants, but leased assets cannot be used as security for borrowing purposes.
Transfers for the year ended 31 December 2022 relate to computer equipment, incorrectly classed in Computacenter AG, which have been
reclassed to inventories. The net book value transferred was £1.1 million (cost of £1.5 million and accumulated depreciation of £0.4 million).
Transfers for the year ended 31 December 2022 relate to assets, incorrectly classed to fixtures, fittings, equipment and vehicles, in
Computacenter France SAS, which have been reclassed to short leasehold improvements. The net book value transferred was £3.3 million
(cost of £11.4 million and accumulated depreciation of £8.1 million).
Transfers for the year ended 31 December 2022 relate to assets, incorrectly classed to short leasehold improvements, in Computacenter AG & Co
oHG, which have been reclassed to fixtures, fittings, equipment and vehicles. The net book value transferred was £0.9 million (cost of £0.9 million).
As at 31 December 2022, the net book value of recognised right-of-use assets relating to land and buildings was £88.9 million (2021: £82.7 million)
and plant and equipment £30.5 million (2021: £55.4 million). The depreciation charge for the year relating to those assets was £22.9 million
(2021: £21.0 million) and £27.6 million (2021: £29.6 million), respectively.
Computacenter plc Annual Report and Accounts 2022 | 175
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
16 Intangible assets
Cost
At 1 January 2021
Additions
Disposals
Transfers
Foreign currency adjustment
At 31 December 2021
Relating to acquisition of subsidiaries (note 18)
Additions
Disposals
Transfers
Foreign currency adjustment
At 31 December 2022
Accumulated amortisation and impairment
At 1 January 2021
Provided during the year
Disposals
Transfers
Foreign currency adjustment
At 31 December 2021
Provided during the year
Disposals
Transfers
Foreign currency adjustment
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
At 1 January 2021
Goodwill
£m
Software
£m
Acquired intangible assets
Customer
relationships
£m
Others
£m
165.0
2.3
–
–
(1.4)
165.9
10.6
–
–
–
13.1
189.6
11.0
–
–
–
(0.9)
10.1
–
–
–
0.6
10.7
178.9
155.8
154.0
109.9
11.5
(9.2)
0.6
(0.8)
112.0
–
11.8
(5.7)
–
1.4
119.5
92.0
7.7
(8.7)
0.3
(0.9)
90.4
8.0
(5.8)
–
0.9
93.5
26.0
21.6
17.9
112.7
–
–
–
1.3
114.0
39.5
–
–
–
13.6
167.1
10.2
7.5
–
–
0.1
17.8
9.6
–
–
2.5
29.9
137.2
96.2
102.5
22.6
–
–
–
(0.5)
22.1
1.1
–
–
–
1.4
24.6
22.3
0.1
–
–
(0.4)
22.0
1.3
–
–
1.3
24.6
–
0.1
0.3
Total
£m
410.2
13.8
(9.2)
0.6
(1.4)
414.0
51.2
11.8
(5.7)
–
29.5
500.8
135.5
15.3
(8.7)
0.3
(2.1)
140.3
18.9
(5.8)
–
5.3
158.7
342.1
273.7
274.7
17 Impairment testing of goodwill, other intangible assets and other non-current assets
Goodwill acquired through business combinations has been allocated to the following CGUs:
• Computacenter (UK) Limited
• Computacenter Germany
• Computacenter AG
• Computacenter Belgium
• Computacenter United States Inc. (formerly Fusionstorm)
• Computacenter Netherlands (formerly Misco Solutions B.V.)
• PathWorks GmbH
• Pivot Technology Solutions, Inc. (Pivot) USA CGU
• Pivot Technology Solutions, Inc. (Pivot) Canada CGU
• ITL logistics GmbH
• Emerge CGU
• Business IT Source Holdings, Inc (BITS)
These represent the lowest level within the Group at which goodwill is monitored for internal Management purposes. Certain other corporate
assets are unable to be allocated against specific CGUs. These assets are tested across an aggregation of CGUs that utilise the asset.
176 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Movements in goodwill
1 January 2021
Relating to
acquisition of
subsidiaries
Foreign currency
adjustment
31 December
2021
Relating to
acquisition of
subsidiaries
Foreign currency
adjustment
31 December
2022
Market growth
rate
Discount rate
(pre tax)
Discount rate
(post tax)
CC* (UK)
Limited
£m
35.0
CC*
Germany
£m
16.1
CC* AG**
£m
3.3
CC*
Belgium
£m
1.5
CC* US,
Inc
£m
36.6
CC*
Netherlands
£m
3.3
PathWorks
GmbH
£m
3.2
Pivot
Technology
Solutions,
Inc
(USA
CGU)
£m
50.1
Pivot
Technology
Solutions,
Inc
(Canada
CGU)
£m
4.9
ITL
logistics
GmbH
£m
–
Business IT
Source
Holdings
£m
–
Emerge
£m
–
1.4
–
–
–
–
–
–
–
(1.1)
(0.1)
(0.1)
0.4
(0.2)
(0.1)
–
0.6
36.4
15.0
3.2
1.4
37.0
3.1
3.1
50.7
–
0.8
36.4
15.8
0.3
3.5
0.1
1.5
4.4
41.4
0.2
3.3
0.3
3.4
5.8
56.5
–
0.1
5.0
0.6
5.6
0.9
–
0.9
0.1
1.0
–
–
–
2.1
–
2.1
Total
£m
154.0
2.3
(0.5)
155.8
–
–
–
8.5
10.6
(0.1)
12.5
8.4
178.9
1.6%
1.3%
1.6%
1.6%
1.9%
1.6%
1.6%
1.9%
1.9%
1.3%
1.8%
2.0%
17.1% 14.1% 11.9% 15.9% 15.4%
11.5%
12.1%
13.3%
17.0%
13.6%
14.2%
16.0%
12.7%
9.9% 10.4% 11.8% 11.0%
8.8%
10.4%
10.1%
12.7%
9.9%
10.9%
12.0%
*
**
CC – Computacenter.
On the 1st January 2022, cITius AG was merged into Computacenter AG to consolidate activity of the group in Switzerland and reduce management time in overseeing the two entities in
this region. The above figures for Computacenter AG therefore include the previous cITius goodwill balance.
Key assumptions used in value-in-use calculations
The recoverable amounts of all CGUs have been determined based on a value-in-use calculation. To calculate this, cash flow projections are based
on financial budgets approved by senior Management covering a three-year period and on long-term market growth rates of between 1.3 per cent
and 1.9 per cent (2021: between 1.7 per cent and 2.3 per cent) thereafter.
Key assumptions used in the value-in-use calculation for all CGUs for 31 December 2022 and 31 December 2021 are:
• budgeted revenue, which is based on long-run market growth forecasts and taking into account forecast inflation;
• budgeted gross margins, which are based on average gross margins achieved in the year immediately before the budgeted year, adjusted for
expected long-run market pricing trends and taking into account forecast inflation; and
• the discount rate applied to cash flow projections ranges from 10.1 per cent to 12.7 per cent (2021: 7.1 per cent to 13.0 per cent) which
represents the Group’s post-tax measure estimating the weighted-average cost of capital based on the rate of government bonds in the
relevant market and in the same currency as the cash flows, adjusted for a risk premium to reflect the increased risk of investing in
equities generally.
Each CGU generates value substantially in excess of the carrying value of goodwill attributed to each one. Management therefore believes
that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its
recoverable amount.
Foreseeable costs for achieving planned reductions in Scope 1 and 2 greenhouse gas emissions have been included as assumptions within the
forecast models used to assess impairment. These include the cost of transition to green energy and the purchase of carbon offset credits within
our baseline financial forecasts. The costs of longer-term planned reductions in Scope 3 emissions have also been considered when making these
assessments, although specific costs are not usually as available for direct input into the forecast models. Reductions in Scope 3 emissions will
be achievable primarily through the greenhouse gas reduction programmes of our key vendors, where the vast majority of the emissions in the
value-chain occur.
Other acquired intangible assets
Other acquired intangible assets consist of customer relationships, order back log and tools and technology. The expected useful lives are shown
in note 2.
Other non-current assets
When there is an indication of impairment within a CGU, the carrying values of the non-current assets are compared to their recoverable amount,
which is the higher of the assets’ fair value less costs of disposal or the value-in-use of the CGU calculated as described above.
Computacenter plc Annual Report and Accounts 2022 | 177
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
18 Investments
a) Investment in associate
The following table illustrates summarised information of the investment in associates:
Cost
At 1 January and 31 December
Impairment
At 1 January and 31 December
Carrying value
2022
£m
0.1
–
0.1
2021
£m
0.1
–
0.1
Gonicus GmbH
The Group has a 20 per cent (2021: 20 per cent) interest in Gonicus GmbH, whose principal activity is the provision of open-source software.
Gonicus is a private entity, incorporated in Germany, that is not listed on any public exchange and therefore there is no published quotation price
for the fair value of this investment. The reporting date of Gonicus is 31 December.
b) Investment in subsidiaries
The Group’s subsidiary undertakings are as follows:
Name
Computacenter Pty Ltd.
Computacenter Services Australia Pty Ltd.
Computacenter NV/SA
Computacenter Brasil Importacao, Comercio e
Servicos Ltda
Computacenter TeraMach Inc.
Computacenter Pivot Hong Kong Limited
Computacenter Services Hong Kong Limited
Computacenter (UK) Limited
R.D. Trading Limited
Pivot Solutions International (UK) Ltd.
Computacenter France SAS
Computacenter NS
Computacenter AG & Co oHG
Computacenter Aktiengesellschaft
Computacenter Management GmbH
Computacenter Managed Services GmbH
Computacenter Germany AG & Co oHG
Computacenter Holding GmbH
Alfatron GmbH Elektronik – Vertrieb
C’NARIO Informationsprodukte Vertriebs-GmbH
E’ZWO Computer vertriebs
ITL logistics GmbH
Computacenter Ireland Limited
Computacenter Services Ireland Limited
Computacenter Japan K.K.
Computacenter B.V.
Computacenter Services Singapore Pte. Ltd.
Computacenter Singapore Pte. Ltd.
Computacenter (Pty) Limited
Computacenter AG
Computacenter TS GmbH
Computacenter United States Inc.
FusionStorm Acquisition Corp.
FusionStorm International Inc.
Computacenter Holdings Inc.
Country of incorporation
Australia1
Australia2
Belgium3
Brazil4
Canada5
China7
China8
England9
England10
England11
France12
France12
Germany13
Germany14
Germany14
Germany14
Germany15
Germany15
Germany15
Germany15
Germany15
Germany16
Ireland17
Ireland18
Japan19
Netherlands20
Singapore21
Singapore22
South Africa23
Switzerland24
Switzerland25
USA26
USA26
USA26
USA26
178 | Computacenter plc Annual Report and Accounts 2022
Nature of business
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure service
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
Proportion of voting rights
and shares held
2022
100%i
100%i
100%vi
100%i
100%i
100%i
100%i
100%
95%vii
100%i
100%
100%iv
100%
100%
100%
100%
100%ii
100%
100%ii
100%ii
99.09%ii
100%i
100%i
100%i
100%i
100%
100%
100%i
100%i
100%
100%iii
100%v
100%v
100%v
100%
2021
100%i
–
100%vi
–
100%i
100%i
–
100%
95%vii
100%i
100%
100%iv
100%
100%
100%
100%
100%ii
100%
100%ii
100%ii
99.09%ii
100%i
100%i
100%i
–
100%
–
100%i
100%i
100%
100%iii
100%v
100%v
100%v
100%
Financial Statements Name
Business IT Source Holdings, Inc.
Pivot Technology Solutions, Ltd.
Pivot Technology Services Corp.
ARC Acquisition (US), Inc.
ProSys Information System Inc. (WBE)
Applied Computer Solutions (WBE)
Digica Group Finance Limited
Computacenter Immobilien GmbH
Computacenter Information Technology
(Shanghai) Company Limited
Computacenter Services Kft
Computacenter India Private Limited
Computacenter Services (Malaysia) Sdn. Bhd
Computacenter México S. A. de C.V.
Pivot of the Americas, S. A. de C.V.
Computacenter Poland sp. Z.o.o.
Computacenter Services S.R.L.
Computacenter Services (Iberia) SLU
FusionStorm Netherlands Cooperatief
Computacenter Quest Trustees Limited
Computacenter Trustees Limited
Allnet Limited
Amazon Computers Limited
Amazon Energy Limited
Amazon Systems Limited
CAD Systems Limited
Compufix Limited
Computacenter (FMS) Limited
Computacenter (Management Services) Limited
Computacenter (Mid-Market) Limited
Computacenter Distribution Limited
Computacenter Leasing Limited
Computacenter Maintenance Limited
Computacenter Overseas Holdings Limited
Computacenter Services Limited
Computacenter Software Limited
Computacenter Solutions Limited
Computacenter Training Limited
Computadata Limited
Computer Services Group Limited
Digica Group Limited
Digica Group Holdings Limited
Digica SMP Limited
Digica (FMS) Limited
ICG Services Limited
Kit Online Limited
M Services Limited
Merchant Business Systems Limited
Merchant Systems Limited
Logival (SARL)
Damax GmbH
Computacenter (US) Defense Inc.
Country of incorporation
USA27
USA28
USA28
USA29
USA28
USA30
England9
Germany13
China31
Hungary32
India33
Malaysia34
Mexico35
Mexico36
Poland37
Romania38
Spain39
Netherlands40
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
England9
France12
Switzerland24
USA26
Computacenter plc is the ultimate Parent entity of the Group
Nature of business
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
IT infrastructure services
Investment property
Investment property
International call centre services
International call centre services
International call centre services
International call centre services
International call centre services
International call centre services
International call centre services
International call centre services
International call centre services
Financial holdings
Employee share scheme trustees
Employee share scheme trustees
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Dormant company
Proportion of voting rights
and shares held
2022
100%v
100%v
100%v
100%v
46.4%viii
40%ix
100%i
100%ii
100%i
100%i
100%vi
100%i
100%vi
100%i
100%i
87.47%i
100%i
100%v
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%iv
100%iii
100%v
2021
–
100%v
100%v
100%v
44.9%viii
40%ix
100%i
100%ii
100%i
100%i
100%vi
100%i
100%vi
100%i
100%i
90%i
100%i
100%v
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%i
100%iv
100%iii
100%v
Computacenter plc Annual Report and Accounts 2022 | 179
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
18 Investments continued
i
ii
Includes indirect holdings of 100 per cent via Computacenter (UK) Limited
Includes indirect holdings of 100 per cent via Computacenter Holding GmbH, excludes
E’ZWO Computervertriebs which is 99.09 per cent
Includes indirect holdings of 100 per cent via Computacenter AG
iii
Includes indirect holdings of 100 per cent via Computacenter France SAS
iv
Includes indirect holdings of 100 per cent via Computacenter (U.S.) Inc.
v
vi
Includes indirect holdings of 1 per cent via Computacenter (UK) Limited
vii Includes indirect holdings of 95 per cent via Computacenter (UK) Limited
viii Includes indirect holdings of 46.4 per cent via Pivot Technology Services Corp.
Includes indirect holdings of 40 per cent via Pivot Technology Services Corp.
ix
1 Tower 2, Darling Park, 201 Sussex Street, Sydney, New South Wales 2000, Australia
² Suite 2003, 109 Pitt Street, Sydney NSW 2000, Australia
³ Ikaroslaan 31, B-1930 Zaventem
⁴ Rua Cel Jose Eusebio, nº 95, Conj 13 CEP 01239-030, Higlenópolis, São Paulo, Brazil
⁵ 1130 Morrison Drive, Suite 105, Ottawa, ON K2H 9N6 Canada
⁷ Unit 2, 10/F, NEO, 123 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong
⁸ Rooms 1001-03, 10/F Wing on Kowloon Centre, 345 Nathan Road, Kowloon, Hong Kong
⁹ Hatfield Avenue, Hatfield, Hertfordshire AL10 9TW
¹⁰ Tekhnicon, Springwood, Braintree, Essex CM7 2YN
¹¹ 25 Canada Square, Level 37, London, United Kingdom, E14 5LQ
¹² 229 rue de la Belle Etoile, ZI Parid Nord II, BP 52387, 95943 Roissy CDG Cedex
¹³ Computacenter Park 1, 50170 Kerpen, Germany
¹⁴ Kattenbug 2, 50667 Koln
¹⁵ Werner-Eckert-Str. 16 – 18, 81829 Munchen
¹⁶ Trias Gewerbepark, Lohstrasse 25 b, Schwaig D-85445
¹⁷ Skybridge House, Corballis Road North, Dublin Airport, Swords, Co. Dublin, K67P6K2
¹⁸ 6th Floor, 2 Grand Canal Square, Dublin 2, Dublin D02A342, Ireland
¹⁹ Cross Office Mita 601, 5-29-20, Shiba, Minato-ku, Tokyo, 108-0014, Japan
²⁰ Gondel 1, 1186 MJ Amstelveen, Netherlands
²¹ 51 Changi Business Park, Central 2, #04-05 The Signature, Sinapore 486066
²² 4 Battery Road, #25-01 Bank of China Building, Singapore 049908
²³ Klein D’Aria Estate, 97 Jip de Jager Drive, Belville, 7535, Cape Town
²⁴ Riedstrasse 14, CH-8953 Dietikon
²⁵ Luzernerstrasse 52c, CH 6025 Neudorf
²⁶ 1 University Ave, Suite 102, Westwood, MA 02090
²⁷ 850 Asbury Drive, Buffalo Grove, IL 60089
²⁸ 6025 The Corners Parkway, Suite 100, Norcorss, GA 30092
²⁹ 900 Arion Pkwy, Suite 110, San Antonio, TX 78216
³⁰ 15461 Springdale Street, Huntington Beach, CA 92649
³¹ Unit 229, Block 2, Building 1, Huanhu West 2nd Road no. 888 Nanhui New Town, Putong
District Shanghai
³² Haller Gardens, Building D. 1st Floor, Soroksari ut 30 – 34, Budapest 1095
³³ 4th Floor, Purva Premiere, Residency Road, Bangalore 560025
³⁴ Level 9, Tower 1, Puchong Financial Corporate Centre, Jalan Puteri 1/2, Bandar Puteri
47100 Puchong, Selangor Darul Ehsan
³⁵ Av. Paseo de la Reforma, No.412 floor 5, Col.Juarez, Delegacion Cuauhtemoc, CP06600,
Mexico City
³⁶ Presa de la Angostura 23 PB, Colonia Irrigacion 11500, Distrito Federal, Mexico City
³⁷ Ul. Glogowska 31/33, 60 – 702, Poznan, Poland
³⁸ “Stables Office”, 20A Onisifor Ghibu, Record Park, Cluj-Napoca, CJ 400185 Romania
³⁹ Carrer de Sancho De Avila 52 – 58, 08018, Barcelona
⁴⁰ Prins Bernhardplein 200, 1097JB Amsterdam
c) Computacenter Japan K.K formerly Emerge 360 Japan k.k (Emerge Japan)
On 25 May 2022, the Group acquired 100 per cent of the share capital in Emerge 360 Japan k.k (Emerge Japan) from Emerge 360, Inc., for a cash
consideration of $3.5 million. The acquistion-related costs amounting to £0.1 million are included in the Consolidated Income Statement. Emerge
Japan is an IT Outsourcing Services provider based in Tokyo, Japan. The business has presence in Japan, Singapore, Australia and Hong Kong.
The acquisition has been accounted for using the purchase method of accounting.
d) Business IT Source Holdings, Inc.
On 1 July 2022 the Group acquired 100 percent of the voting shares of Business IT Source Holdings, Inc. (BITS) for a cash consideration of
$32.0 million and a contingent consideration of $44.4 million. The acquistion-related costs amounting to £1.7 million are included in the
Consolidated Income Statement. BITS is one of the fastest-growing, value-added resellers in the United States of America. Two further earn-out
payments in April 2023 and April 2024 are contingent on the future performance of the acquired business through to 31 December 2023. The value
of these contingent payments has been determined in accordance with the share purchase agreement. The acquisition has been accounted for
using the purchase method of accounting.
180 | Computacenter plc Annual Report and Accounts 2022
Financial Statements The following table summarises the recognised amounts of assets acquired, and liabilities assumed, at the date of acquisition:
Property, plant and equipment (including right-of-use assets)
Customer relationship and order book
Deferred income tax assets
Inventories
Trade and other receivables
Prepayments
Cash and short-term deposits
Bank overdraft
Trade and other payables
Financial liabilities
Lease liabilities
Income tax payable
Net assets acquired
Goodwill arising on acquisition
Discharged by:
Cash consideration
Contingent consideration
Cash paid on acquisition
Cash and cash equivalents acquired:
Cash and short-term deposits
Bank overdraft
Cash outflow on acquisition
Fair value
to the Group
2022
£m
1.8
40.6
0.3
37.8
37.3
0.2
0.8
(0.2)
(58.6)
(3.2)
(0.8)
(1.2)
54.8
8.5
63.3
26.6
36.7
63.3
26.6
0.8
(0.2)
26.0
The initial accounting for the acquisition of BITS is expected to be final apart from customer relationship and tax balances which have only been
provisionally determined at the date of finalisation of these Consolidated Financial Statements based on Management’s best estimates.
Deferred tax liabilities on goodwill, customer relationship intangibles, and order book intangibles, arising on the acquisition, have not been
recognised. These are either expected to be deductible for US tax purposes, or recognised on post-acquisition movement, as tax benefits are
claimed, due to a difference between the tax and accounting base. A deferred tax liability will therefore be recognised in future periods.
Measurement of fair values
Customer relationship and order book has been valued using the income approach (excess earnings) valuation technique. This approach states
that the value of an intangible asset is given by the present value of the earnings it generates, net of a reasonable return on other assets also
contributing to that stream of earnings (contributory asset charges).
The trade receivables comprised gross amounts due of $41.3 million, against which an allowance for expected credit losses of $0.3 million was
made at the date of acquisition. The rest of the assets have been valued using market comparison and cost technique. This approach considers
market prices for similar items when they are available, and depreciated replacement cost when appropriate.
Management has to make certain assumptions in determining the fair value of customer relationships. If new information becomes available
within one year about facts and circumstances that existed at the date of acquisition which identifies adjustments to this, or any additional
provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.
From the date of acquisition to 31 December 2022, BITS contributed £184.6 million to the Group’s revenue, £7.2 million to adjusted1 operating profit
and £7.0 million to adjusted1 profit after tax.
Contingent consideration
Contingent consideration, with an initial fair value of $44.4 million based on BITS’s adjusted EBITDA growth and indebtedness, is payable over a
two-year earn-out period to 2024. The initial fair value reflects the discounted value of estimated payments, measured at the time of acquisition, and
reflects management’s estimate of future performance at that time. Remeasurement of contingent consideration reflecting changes after the
acquisition date will be recorded in profit or loss. Management’s projected estimate was based on BITS’s 2022 and 2023 EBITDA and indebtedness
forecast.
Computacenter plc Annual Report and Accounts 2022 | 181
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
18 Investments continued
The fair value is based on unobservable inputs and the projected outcome is classified as a level 3 fair value estimate under the IFRS fair value
hierarchy. The potential undiscounted amount of all future payments in respect of contingent consideration that the Group could be required to
make under the contingent consideration arrangement is $52.1 million. The arrangement has a number of elements which only become payable
on the achievement of specific performance targets.
e) Acquisitions in previous period
In 2022, no changes were recorded to the fair values of ITL logistics GmbH (ITL) and the 4.99 per cent of the voting shares in R.D. Trading Limited
(RDC), both of which were acquired in 2021.
f) Pivot Technology Solutions Inc. (Pivot)
Applied Computer Solutions (ACS)
ACS is a 40 per cent-owned affiliate of a Pivot subsidiary, whose principal office is located in Huntington Beach, California, USA. Despite not owning
a majority of the voting rights, Computacenter controls this entity through a Pivot subsidiary for accounting purposes, based on the following
facts and circumstances:
• Pivot has the right in its sole discretion to either acquire, at any time, shares of ACS that it does not already own, or to designate a different
owner to purchase the shares provided such transfer(s) are in compliance with applicable Women Business Enterprise (WBE) requirements;
• Pivot has multiple representatives on the ACS board of directors;
• any significant decisions made at ACS requires the approval of the ACS board of directors and/or shareholders, including board changes,
payment of dividends, mergers or acquisitions, material changes to compensation, incurring debt in excess of $0.1 million, causing any
material change in the business, and/or assignment or termination of any material agreement; and
• Pivot receives the majority of the benefits from the activities of ACS.
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Total comprehensive income (loss)
% interest held
2022
$m
23.6
17.2
34.7
0.6
245.5
1.7
40%
2021
$m
60.0
16.4
6.8
0.2
206.5
2.8
40%
ProSys Information Systems, Inc (ProSys)
ProSys is a 46.4 per cent-owned affiliate of a Pivot subsidiary, whose principal office is located in Norcross, Georgia, USA. Despite not owning
a majority of the voting rights, Computacenter controls this entity through a Pivot subsidiary for accounting purposes based on the following
facts and circumstances:
• Pivot has the right to either acquire, at any time, the remaining shares of ProSys it does not already own or to designate a different owner
to purchase the shares provided such transfer(s) are in compliance with applicable WBE requirements;
• Pivot is represented on the ProSys board of directors and any significant decisions made at ProSys requires the approval of the board of
directors and/or shareholders, including changes to its board of directors, payment of dividends, mergers or acquisitions, material changes
to compensation, incurring debt in excess of $0.1 million, causing any material change in the business, and/or assigning or termination of any
material agreement; and
• Pivot receives the majority of the benefits from the activities of ProSys.
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Total comprehensive income (loss)
% interest held
182 | Computacenter plc Annual Report and Accounts 2022
2022
$m
186.0
19.5
186.9
9.8
709.6
1.8
46.4%
2021
$m
197.9
13.2
185.8
12.0
677.1
1.7
46.4%
Financial Statements 19 Inventories
Inventories for re-sale
20 Trade and other receivables
Trade receivables before provisions
Allowance for expected credit losses
Provision for credit notes
Trade receivables
Other receivables
2022
£m
417.7
2021
£m
341.3
2022
£m
1,689.6
(6.7)
(16.0)
1,666.9
46.3
1,713.2
2021
£m
1,265.2
(7.8)
(17.6)
1,239.8
35.4
1,275.2
Trade receivables are non-interest bearing and are generally on 30- to 90-day credit terms. Note 27 sets out the Group’s strategy towards
credit risk.
Other receivables generally arise from transactions outside the usual operating activities of the Group and comprise tax receivables (VAT, GST,
franchise taxes, and sales and use taxes) of £27.6 million (2021: £24.4 million) and other receivables of £18.7 million (2021: £11.0 million).
The movements in the allowance for expected credit losses were as follows:
At 1 January
Relating to acquisition
Charge for the year
Utilised
Unused amounts reversed
Foreign currency adjustment
At 31 December
2022
£m
7.8
0.3
4.8
(0.7)
(5.9)
0.4
6.7
2021
£m
7.8
–
7.5
(0.4)
(6.9)
(0.2)
7.8
The following table provides information about the expected credit losses allowance determined upon applying the simplified Expected Credit
Loss (ECL) model under IFRS 9:
2022
Expected loss rate
Gross carrying amount
Provision
2021
Expected loss rate
Gross carrying amount
Provision
Neither past due
nor impaired
£m
Total
£m
0.4%
1,689.6
6.7
0.6%
1,265.2
7.8
0.1%
1,327.2
1.9
0.2%
1,046.4
2.2
Past due but not impaired
<30 days
£m
30–60 days
£m
60–90 days
£m
90–120 days
£m
>120 days
£m
0.3%
223.5
0.6
0.4%
133.5
0.6
0.4%
75.3
0.3
0.6%
32.6
0.2
3.6%
22.4
0.8
3.4%
31.9
1.1
4.7%
12.7
0.6
15.4%
11.0
1.7
8.8%
28.5
2.5
20.4%
9.8
2.0
Year-on-year fluctuations in the ECL model percentages are due to changes to the mix of customers and their associated credit history, coupled
with the impact of known specific deal transactions which may or may not attract greater risk weighting in the ECL calculations.
Computacenter plc Annual Report and Accounts 2022 | 183
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
21 Cash and cash equivalents
Cash and short-term deposits
Bank overdraft
Cash and cash equivalents in the consolidated cash flow statement
2022
£m
275.1
(10.7)
264.4
2021
£m
285.2
(12.0)
273.2
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of
between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective short-term
deposit rates. The fair value of cash and cash equivalents is £264.4 million (2021: £273.2 million).
During the year ended 31 December 2022, the Group continued to maintain strong cash generation and finance its operational requirements from
its cash balance. The overdraft facilities are retained by the Group and can be used upon requirement. The uncommitted overdraft facilities
available to the Group are £13.3 million as at 31 December 2022 (2021: £13.3 million).
Expected credit loss on cash and cash equivalents is negligible and therefore no provision is held.
22 Trade and other payables
Trade payables
Accruals
Social Security and other taxes
Other payables
Contingent consideration – note 18(d)
2022
£m
1,320.5
305.9
123.9
68.3
38.9
1,857.5
2021
£m
989.3
252.3
116.9
51.9
–
1,410.4
Trade payables are non-interest bearing and are normally settled on net monthly terms.
The Group’s subsidiary, BITS, has an arrangement through Wells Fargo for a short-term extended supplier interest bearing credit facility.
$2.5 million of this facility was used as at 31 December 2022. The rest of the Group had no short-term supplier extended-term interest-bearing
credit facilities (2021: nil).
Other payables, which principally relate to other taxes, social security costs and accruals, are non-interest bearing and have an average term
of one to three months.
The Group regularly participates in industry standard vendor rebate plans, primarily relating to volume discounts on purchases, often paid
retrospectively. Rebates are factored into the calculation of the purchase cost of inventory valuations. Owing to the nature of these rebate plans,
the calculation of rebates is not subject to significant estimation uncertainty, nor is their recognition a matter of significant judgement.
23 a) Financial liabilities
Current
Bank loans
Credit facility
Other loans
Non-current
Bank loans
Other loans
There are no material differences between the fair value of financial liabilities and their book value.
184 | Computacenter plc Annual Report and Accounts 2022
2022
£m
2.6
–
4.9
7.5
7.8
4.8
12.6
20.1
2021
£m
5.4
7.0
2.7
15.1
9.8
6.9
16.7
31.8
Financial Statements Bank loans
The Group has one principal bank loan:
• A total loan of €38.5 million was drawn at various stages between December 2017 and July 2018 to finance the fit out of the new German
headquarters building and Integration Center in Kerpen. Further details are shown below:
– €8.0 million drawn in December 2017, with a fixed interest rate at 1.65 per cent per annum. The remaining balance of loan of €1.6 million was
fully repaid during 2022.
– €8.9 million drawn in December 2017 carries fixed interest rate at 1.95 per cent per annum. The balance on this loan as at 31 December 2022
was €4.5 million. Repayments commenced in H1 2018 and will continue for five years;
– €8.5 million drawn in July 2018, carries fixed interest rate at 0.95 per cent per annum. The balance on this loan as at 31 December 2022 was
€0.5 million. Repayments commenced in H2 2018 and will be repaid by June 2023; and
– €13.1 million taken out in 2018, carries fixed interest rate at 0.75 per cent per annum. The balance on this loan as at 31 December 2022 was
€6.7 million. Repayments commenced in H2 2018 and will continue for five years.
• Computacenter China had a loan of £0.6 million at 31 December 2021 which was fully repaid during 2022.
For movement in bank loans refer to note 31 analysis of changes in net funds.
Other loans
Pivot
Prior to acquisition, Pivot entered into a five-year contract with a customer to provide an infrastructure-as-a-service arrangement starting
in October 2020. At the same time, Pivot entered into a separate payment agreement for $17.3 million to fund the majority of the components
required by the customer. This payment agreement is with the vendor supplying the hardware components of the arrangement, with repayment
terms aligned with those in the contract with the customer. The payment agreement with the vendor is an unsecured payable incurring nil
interest charges. The balance at end of the year was $9.3 million (£7.7 million).
BITS
The recently acquired BITS subsidiary came with a flooring arrangement with Wells Fargo. There was $2.5 million interest bearing debt relating
to supplier invoices as at 31 December 2022 with an interest rate of 6.08 per cent.
Credit facility
The Pivot subsidiary had a revolving credit facility with JPMorgan Chase Bank of $100.0 million which was senior secured, asset based. This was
repaid in full during 2022 and all security was released.
On 9 December 2022, the Group entered into a new unsecured multicurrency revolving loan facility of £200.0 million in order to rationalise its
treasury operations. The new facility has a term of five years plus two one-year extension options exercisable on the first and second anniversary
of the facility. The Group-specific committed facility of £60.0 million that was due to expire on 8 September 2023 was terminated and all security
was released. The revolving credit facility which its subsidiary, Pivot, had with JPMorgan Chase Bank, N.A. (JPMC) of $100.0 million that was due to
expire on 14 May 2024 was also repaid in full and all security was released. The new facility was not used as at end of the year.
23 b) Lease liabilities
At 1 January
Additions during the year
Relating to acquisition of a subsidiary
Gross payment of lease liabilities
Interest relating to lease liabilities
Early terminations during the year
Exchange adjustment
At 31 December
Current
Non-current
2022
£m
146.1
45.0
0.8
(55.2)
4.9
(22.0)
7.5
127.1
36.9
90.2
127.1
2021
£m
137.5
70.2
1.4
(55.4)
5.2
(5.3)
(7.5)
146.1
43.0
103.1
146.1
Computacenter plc Annual Report and Accounts 2022 | 185
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
24 Derivative financial instruments
Financial instruments at fair value through profit and loss
Foreign exchange forward contracts
Financial instruments at fair value through other comprehensive income
Cash flow hedges
Foreign exchange forward contracts
Current assets
Current liabilities
2022
£m
1.8
1.8
(3.0)
(1.2)
7.5
(8.7)
(1.2)
2021
£m
1.6
1.6
(0.5)
1.1
3.6
(2.5)
1.1
Cash flow hedges
Financial assets and liabilities at fair value through other comprehensive income
Forward contracts
These amounts reflect the change in the fair value of foreign exchange forward contracts designated as cash flow hedges which are used to
hedge intra-Group services or customer/supplier contracts where the underlying cost is denominated in a foreign currency. These are based on
highly probable forecast transactions in euros, Hungarian forint, Indian rupees, Japanese yen, South African rand, Swedish krona and US dollars.
Financial assets and liabilities at fair value through profit or loss
Forward contracts
The Group also enters into other foreign exchange forward contracts with the intention to reduce the foreign exchange risk of expected sales and
purchases. When these other contracts are not designated in hedge relationships they are measured at fair value through profit and loss within
administrative expenses.
The foreign exchange forward contract balances vary with the level of expected foreign currency costs and changes in the foreign exchange
forward rates.
Effectiveness of hedging
The terms of the foreign currency forward contracts have been negotiated for the expected highly probable forecast transactions to which hedge
accounting has been applied. No significant element of hedge ineffectiveness required recognition in the Consolidated Income Statement.
The cash flow hedges of the forecasted costs were assessed to be highly effective and a net unrealised loss of £3.0 million (2021: £0.5 million)
with a deferred tax asset of £1.1 million (2021: £0.1 million) relating to the hedging instruments is included in the Consolidated Statement of
Comprehensive Income. The amounts retained in the Consolidated Statement of Comprehensive Income of £3.0 million (2021: £0.5 million) are
expected to mature and affect the Consolidated Income Statement between 2023 and 2026.
186 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Forward currency contracts
At 31 December 2022 the Group held foreign exchange contracts as hedges of an intra-Group loan and future expected payments to suppliers.
The exchange contracts are being used to reduce the exposure to foreign exchange risk. The terms of these contracts are detailed below:
31 December 2022
UK
Germany
France
Belgium
US
India
Buy currency
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Euros
US dollars
Hungarian forint
SA rand
Euros
Euros
Euros
Euros
Sterling
US dollars
Hungarian forint
Swiss francs
Polish zloty
Romanian leu
Euros
Euros
US dollars
Euros
US dollars
US dollars
US dollars
Indian rupees
Sell currency
Euros
US dollars
Hungarian forint
Swiss francs
Swedish krona
SA rand
Japanese yen
Norwegian krone
Hong Kong dollars
Singapore dollars
Polish zloty
Canadian dollars
Sterling
Sterling
Sterling
Sterling
US dollars
Hungarian forint
Polish zloty
SA rand
Euros
Euros
Euros
Euros
Euros
Euros
Hungarian forint
SA rand
Euros
SA rand
Euros
SA rand
Japanese yen
Sterling
Nominal value of
contracts (millions)
£1.2
£26.2
£1.7
£6.0
£28.7
£11.0
£0.4
£0.1
£0.5
£1.5
£0.4
£6.3
€12.2
$133.4
HUF 2,207.3
ZAR 319.3
€83.7
€5.4
€0.6
€1.1
£1.3
$86.9
HUF 600.0
CHF 0.2
PLN 2.1
RON 1.0
€3.1
€1.8
$8.1
€2.0
$0.3
$5.8
$66.2
INR 2,364.3
Maturity dates
Jan 23 – Oct 23
Jan 23 – Mar 23
Jan 23 – Feb 24
Jan 23 – Sep 23
Jan 23 – Oct 23
Jan 23 – Aug 25
Jun 23
Jan 23
Jun 23
Feb 23
Jan 23
Jan 23 – Mar 23
Jan 23 – Apr 24
Jan 23 – Oct 26
Jan 23 – Jun 24
Jan 23 – Dec 26
Jan 23 – May 26
Jan 23 – Jun 24
Feb 23 – Mar 23
Jan 23 – Oct 25
Jan 23
Jan 23 – Jul 23
Jan 24 – Apr 24
Jan 23
Jan 23 – Mar 23
Jan 23
Jan 23 – Jun 24
Jan 23 – Jun 24
Jan 23 – Mar 23
Jan 23 – Sep 25
Feb 23
Jan 23 – May 26
Jan 23 – Mar 23
Jan 23 – Nov 25
Contract rates
1.086 – 1.136
1.116 – 1.229
454.525 – 502.086
1.090 – 1.115
12.231 – 12.600
20.523 – 24.926
155.236
11.874
9.453
1.621
5.286
1.630 – 1.639
0.859 – 0.901
0.705 – 0.960
0.002
0.039 – 0.049
0.985 – 1.106
377.720 – 464.114
4.780 – 4.812
19.194
1.152 – 1.162
0.922 – 1.027
0.002
0.984
0.204 – 0.212
0.202
373.040 – 460.777
17.467 – 20.747
0.935 – 1.020
18.481 – 21.021
0.961
15.825 – 19.321
124.570 – 138.064
0.01
Computacenter plc Annual Report and Accounts 2022 | 187
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
24 Derivative financial instruments continued
31 December 2021
UK
Germany
France
Belgium
US
Buy currency
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Sterling
Euros
US dollars
Hungarian forint
Euros
Euros
Euros
Euros
Euros
US dollars
Mexican peso
Hungarian forint
Romanian leu
Sterling
Euros
Euros
Euros
US dollars
Sterling
Euros
US dollars
US dollars
US dollars
Sell currency
Euros
US dollars
Hungarian forint
Swiss francs
Swedish krona
SA rand
Japanese yen
Mexican peso
Sterling
Sterling
Sterling
Sterling
US dollars
Hungarian forint
Polish zloty
SA rand
Euros
Euros
Euros
Euros
Euros
Hungarian forint
Polish zloty
SA rand
Euros
Euros
SA rand
Euros
SA rand
Japanese yen
Nominal value of
contracts (millions)
£1.5
£19.1
£1.3
£0.4
£0.3
£18.5
£2.0
£0.0
€11.0
$81.2
HUF 2,536.0
€0.4
€110.3
€1.5
€1.6
€1.5
$55.2
MXN 3.5
HUF 160.0
RON 3.8
£0.4
€6.4
€0.1
€2.5
$9.0
£0.3
€0.2
$0.6
$5.7
$30.7
Maturity dates
Jan 22 – Oct 23
Jan 22 – Mar 22
Jan 22 – Dec 22
Dec 22
Jan 22
Jan 22 – Aug 25
Feb 22
Jan 22
Jan 22 – Mar 22
Jan 22 – Dec 24
Jan 22 – Dec 23
Jan 22
Jan 22 – Jun 22
Jan 22 – Dec 22
Jan 22 – Jun 22
Jan 22 – Oct 25
Jan 22 – Jun 22
Jan 22
Jan 22 – Feb 22
Jan 22 – Mar 22
Jan 22 – Feb 22
Jan 22 – Dec 23
Jan 22
Jan 22 – Jun 24
Jan 22 – Mar 22
Jan 22
Jan 22 – May 22
Mar 22 – Apr 22
Jan 22 – May 26
May 22 – Jun 22
Contract rates
1.086 – 1.169
1.321 – 1.380
389.996 – 456.392
1.212
12.223
20.536 – 27.262
155.616
27.742
0.839 – 0.856
0.705 – 0.802
0.002
0.850 – 0.856
1.127 – 1.168
358.850 – 367.957
4.595 – 4.688
19.194
0.856 – 0.889
0.043
0.003
0.200 – 0.202
1.184 – 1.185
354.184 – 386.614
4.594
18.041 – 22.701
0.883 – 0.884
1.195
18.324 – 22.714
0.883 – 0.887
15.271 – 19.321
113.000 – 113.050
25 Leases as a lessor
Operating lease receivables where the Group is lessor
The Group entered into commercial leases with customers on certain items of machinery and software. These leases have remaining terms
of between one and five years.
Future amounts receivable by the Group under the non-cancellable operating leases as at 31 December are as follows:
Within one year
After one year
2022
£m
3.6
6.4
2021
£m
3.5
9.0
188 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 26 Provisions
At 1 January 2021
Amount unused reversed
Arising during the year
Utilisation
Exchange adjustment
At 31 December 2021
Amount unused reversed
Arising during the year
Utilisation
Exchange adjustment
At 31 December 2022
Current 2022
Non-current 2022
Current 2021
Non-current 2021
Customer
contract
provisions
£m
9.6
(3.7)
3.5
(2.9)
(0.6)
5.9
(1.8)
1.3
(1.5)
0.3
4.2
2.5
1.7
4.2
2.0
3.9
5.9
Property
provisions
£m
4.9
–
0.8
(0.1)
–
5.6
(0.3)
0.8
(0.5)
0.1
5.7
1.0
4.7
5.7
1.1
4.5
5.6
Other
provisions
£m
2.1
(0.5)
0.3
(0.1)
(0.1)
1.7
(0.9)
0.4
(0.3)
–
0.9
0.3
0.6
0.9
0.4
1.3
1.7
Total
provisions
£m
16.6
(4.2)
4.6
(3.1)
(0.7)
13.2
(3.0)
2.5
(2.3)
0.4
10.8
3.8
7.0
10.8
3.5
9.7
13.2
Customer contract provision
These provisions result from customer contracts where total cost exceeds total revenue. Refer to note 2.12.1 for further details.
Property provisions
Assumptions used to calculate the property provisions are based on 100 per cent of the market value of any contractual dilapidation expenses
on empty properties and the Directors’ best estimates of the likely time before the relevant leases can be reassigned or sublet, which ranges
between one and nine years. The provisions in relation to the UK and European operations are discounted at 3 per cent. These costs are mainly
dilapidation expenses which have not been included as part of the lease liability under IFRS 16.
Other provisions
Included within other provisions are legal claims and other costs associated with the completion of the acquisition of Computacenter NS.
Computacenter plc Annual Report and Accounts 2022 | 189
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
27 Financial instruments
An explanation of the Group’s financial instrument risk management objectives, policies and strategies is set out in the Group Finance Director’s
review on pages 66 and 67.
Credit risk
The Group principally manages credit risk through management of customer credit limits. The credit limits are set for each customer based on
the creditworthiness of the customer and the anticipated levels of business activity. These limits are initially determined when the customer
account is first set up and are regularly monitored thereafter.
In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade receivables from the
date the credit was initially granted up to the reporting date and considers forward-looking information to determine the appropriate expected
credit loss for the whole remaining life of the trade receivable. The maximum exposure on trade receivables, as at the reporting date, is their
carrying value.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, current asset
investment and forward currency contracts, the Group’s exposure to credit risk arises from default of the counterparty, with a maximum
exposure equal to the carrying amount of cash and cash equivalents. The Group manages its counterparty credit risk by placing cash on deposit
with a reputable banking institution, with no more than £85.0 million deposited at any one time.
Aside from the counterparty risk above, there are no significant concentrations of credit risk within the Group.
Interest rate risk
The Group finances its operations through a mixture of retained profits, bank borrowings, cash, short-term deposits, finance leases and loans
for certain customer contracts. The Group’s bank borrowings, existing committed and uncommitted facilities and deposits are at floating rates.
No interest rate derivative contracts have been entered into. If long-term borrowings were to be utilised in the future, the Group’s policy would be
to maintain these borrowings at fixed rates to limit the Group’s exposure to interest rate fluctuations.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates, with all other variables held constant, of the
Group’s profit before tax (through the impact on floating rate borrowings). There is no impact on the Group’s equity.
2022
Sterling
Euro
US dollars
2021
Sterling
Euro
US dollars
Change in
basis points
Effect on profit
before tax
£m
+100
+100
+100
+25
+25
+25
0.7
0.1
1.0
0.4
0.1
0.2
The impact of a reasonable possible decrease to the same range shown in the table would result in an opposite impact on the profit before tax
of the same magnitude.
Fair values
The carrying value of the Group’s short-term receivables and payables is a reasonable approximation of their fair values. The fair value of all other
financial instruments carried within the Consolidated Financial Statements is not materially different from their carrying amount.
190 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Exchange rate sensitivity
The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales,
purchases and receivables are denominated and the respective functional currencies of Group companies. The functional currencies of main
overseas subsidiaries are primarily the euro (€), US dollar ($), Canadian dollar (CAD) and Swiss franc (CHF).
The Group’s risk management policy is to hedge all of its expected foreign currency exposure in respect of sales and purchases as soon as these
are committed. The Group uses forward exchange contracts to manage its currency risk. The main currencies managed by forward foreign
exchange contracts are the South African rand (ZAR), Hungarian forint (HUF), euro (€), US dollar ($), Canadian dollar (CAD), Japanese yen (JPY),
Polish zloty (PLN), Swiss franc (CHF), Swedish krona (SEK), Norwegian krone (NOK), Indian rupee (INR), Hong Kong dollar (HKD), Singapore dollar (SGD)
and Mexican peso (MXN).
However, hedge accounting is mainly applied to the expected trading cash flows denominated in South African rand (ZAR), Hungarian forint (HUF),
euro (€), US dollar ($), Indian rupee (INR), Swedish krona (SEK) and Japanese yen (JPY) where the exposure extends beyond one year and there is
a strong expectation that the expected future foreign currency cash flow will occur. The Group uses forward foreign exchange contracts,
designated as cash flow hedges, to hedge these cash flows. When a commitment is entered into, forward foreign exchange contracts are
normally used to increase the hedge to 100 per cent of the expected exposure, although between 80 per cent and 110 per cent of the expected
exposure should be hedged to meet the risk management policy. The Group designates its forward foreign exchange contracts to hedge its
cashflow risk and applies a hedge ratio of 1:1. The Group’s policy is for the critical terms of the forward exchange contracts to align with the
hedged item.
The Group determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency,
amount and timing of their respective cash flows. The Group assesses whether the derivative designated in each hedging relationship is expected
to be and has been effective in offsetting changes in cash flows of the hedged item using the hypothetical derivative method.
In these hedge relationships, the main sources of ineffectiveness are:
• the effect of the counterparties’ and the Group’s own credit risk on the fair value of the forward foreign exchange contracts, which is not
reflected in the change in the fair value of the hedged cash flows attributable to the change in exchange rates;
• actual cash flows in foreign currencies varying from forecast cash flows; and
• changes in the timing of the hedged transactions.
Other than differences arising from the translation of results of operations outside of the Group’s functional currency, reasonably foreseeable
movements in the exchange rates of +10 per cent or -10 per cent would not have a material impact on the Group’s profit before tax or equity.
The summary quantitative data about the Group’s exposure to currency risk as reported to the Management of the Group is as follows:
Trade and other receivables
Trade and other payables
Forecast future cash flow (net)
Forward exchange contracts
Net exposure
31 December 2022
millions
31 December 2021
millions
$
737.8
(759.6)
(175.3)
(197.1)
197.1
–
€
792.1
(838.4)
(47.1)
(93.4)
93.4
–
$
543.4
(570.9)
(173.9)
(201.4)
€
659.0
(682.2)
(228.2)
(251.4)
201.4
251.4
–
–
Computacenter plc Annual Report and Accounts 2022 | 191
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
27 Financial instruments continued
Liquidity risk
The table below summarises the maturity profile of the Group’s financial liabilities as at 31 December based on contractual discounted payments:
On demand
£m
<3 months
£m
3–12 months
£m
1–2 years
£m
2–5 years
£m
>5 years
£m
Total
£m
Year ended 31 December 2022
Bank loans and credit facility
Lease liabilities
Derivative financial instruments
Contingent payments
Trade and other payables
Year ended 31 December 2021
Bank loans and credit facility
Lease liabilities
Derivative financial instruments
Trade and other payables
2.1
–
–
–
–
2.1
1.6
9.2
5.3
–
1,818.6
1,834.7
3.8
27.7
2.7
17.2
–
51.4
5.0
28.6
0.3
21.7
–
55.6
7.6
43.8
0.4
–
–
51.8
–
17.8
–
–
–
17.8
20.1
127.1
8.7
38.9
1,818.6
2,013.4
On demand
£m
<3 months
£m
3–12 months
£m
1–2 years
£m
2–5 years
£m
>5 years
£m
Total
£m
7.0
–
–
–
7.0
2.5
10.7
0.6
1,410.4
1,424.2
5.6
32.3
0.9
–
38.8
5.0
32.1
0.6
–
37.7
10.3
49.1
0.4
–
59.8
1.4
21.9
–
–
23.3
31.8
146.1
2.5
1,410.4
1,590.8
The table below summarises the maturity profile of the Group’s financial liabilities as at 31 December based on contractual undiscounted payments:
On demand
£m
<3 months
£m
3–12 months
£m
1–2 years
£m
2–5 years
£m
>5 years
£m
Total
£m
Year ended 31 December 2022
Bank loans and credit facility
Lease liabilities
Derivative financial instruments
Contingent payments
Trade and other payables
Year ended 31 December 2021
Bank loans and credit facility
Lease liabilities
Derivative financial instruments
Trade and other payables
2.1
–
–
–
–
2.1
1.7
10.2
5.3
–
1,818.6
1,835.8
3.9
30.6
2.7
17.9
–
55.1
5.1
31.4
0.3
25.3
–
62.1
8.0
48.3
0.4
–
–
56.7
–
19.2
–
–
–
19.2
20.8
139.7
8.7
43.2
1,818.6
2,031.0
On demand
£m
<3 months
£m
3–12 months
£m
1–2 years
£m
2–5 years
£m
>5 years
£m
Total
£m
7.0
–
–
–
7.0
2.5
13.5
0.6
1,410.4
1,427.0
5.8
33.7
0.9
–
40.4
5.2
35.2
0.6
–
41.0
10.8
53.9
0.4
–
65.1
1.4
23.9
–
–
25.3
32.7
160.2
2.5
1,410.4
1,605.8
Fair value measurements recognised in the Consolidated Balance Sheet
Financial instruments which are recognised at fair value subsequent to initial recognition are grouped into Levels 1 to 3 based on the degree
to which the fair value is observable. The three levels are defined as follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The contingent consideration that resulted from the acquisition of BITS of $52.1 million, was measured at Level 3 fair value, subsequent to initial
recognition. The Group used discounted cash flows (DCF) as a valuation technique to derive the fair value of the contingent consideration as at the
date of acquisition. Having considered a range of possible earn out scenarios, management determined that a full accrual of $52.1m discounted
to $44.4 million using a weighted average discount rate of 12 per cent, should be recorded as contingent consideration. This estimate provides
a reasonable approximation as to the value of the contingent consideration and any reasonably possible change in the underlying assumptions
would not have a material impact on the financial statements. The carrying value as at 31 December 2022 of £38.9 million ($46.9 million) is
included in Trade and other payables.
192 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Derivative financial instruments
At 31 December 2022 the Group had forward currency contracts, which were measured at Level 2 fair value subsequent to initial recognition,
to the value of an asset of £7.5 million and a liability of £8.7 million (2021: asset of £3.6 million and liability of £2.5 million).
The net realised loss on forward currency contracts, designated as cashflow hedges, during the year of £0.5 million (2021: gains of £0.4 million)
with a deferred tax asset of £0.1 million (2021: deferred tax liability of £0.1 million), are offset by broadly equivalent realised gains on the related
underlying transactions.
28 Capital management
Computacenter’s approach to capital management is to ensure that the Group has a strong capital base to support the development of the
business and to maintain a strong credit rating, whilst aiming to maximise shareholder value. Consistent with the Group’s aim to maximise return
to shareholders, the Company’s dividend policy is to maintain a dividend cover of between 2 to 2.5 times. In 2022, the cover was 2.5 times on an
adjusted1 profit basis (2021: 2.5 times).
Capital, defined as net funds3, that the Group monitors is disclosed in note 31.
Each operating country manages its working capital in line with Group policies. The key components of working capital, i.e. trade receivables,
inventory and trade payables, are managed in accordance with an agreed number of days targeted in the budget process, in order to ensure
efficient capital usage. An important element of the process of managing capital efficiently is to ensure that each operating country rewards
behaviour at an account manager and account director level, to minimise working capital at a transactional level. This is achieved by increasing
commission payments for early payment by customers and reduced commission payments for late payment by customers, which encourages
appropriate behaviour. Management intends to implement Group policies into acquired businesses over time with the introduction of systems,
reward mechanisms and other operational practices that support these policies.
The Group regularly reviews the adequacy of its facilities against any foreseeable peak borrowing requirement. See note 21 for details on
uncommitted overdraft facilities available to the Group.
In certain circumstances, the Group deposits its funds in short-term investments that do not fulfil the criteria to be classified as cash and cash
equivalents. The Group considers these deposits when managing the net funds3 of the business, and accordingly includes these deposits within
adjusted net funds3.
Capital is allocated across the Group, in order to ensure each operating company is able to manage its working capital needs efficiently and to
minimise its exposure to exchange rates. Each country finances its own working capital requirements, typically resulting in borrowings in France
and the US, with cash on deposit in the UK and Germany. An internal cash pooling arrangement has been implemented which utilises internal
Group financing arrangements.
On 9 December 2022, the Group entered into a multicurrency revolving loan committed facility of £200 million. This replaced the previous
committed facility of £60 million which was terminated and all security was released. This new facility has a term of five years plus two one year
extension options exercisable on the first and second anniversary of the facility. The Group is subject to certain key financial covenants under this
syndicated facility with Barclays, Lloyds, HSBC, BNP Paribas, JPMorgan and PNC Bank. These covenants, as defined in the agreement, are
monitored regularly to ensure compliance. As at 31 December 2022, the Group was in compliance with all covenants.
The Group’s Pivot subsidiary is also subject to certain key financial covenants under its JPMC Credit facility. The facility has been terminated during
the year and all security has been released.
The recently acquired BITS subsidiary maintain a ringfenced ‘Accounts Receivable and Inventory’ facility with Wells Fargo of up to $100 million,
secured on the assets of that subsidiary. The facility is provided on a rolling basis and the latest amendment was signed on 5 July 2022.
29 Issued capital and reserves
Issued share capital – ordinary shares
Issued and fully paid
At 1 January 2022 and 31 December 2022
7⁵⁄₉ pence
ordinary
shares
No. ’000
122,688
Total
£m
9.3
During the year, the issued share capital remained unchanged.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at the general
meetings of the Company. On a winding up of the Company, holders of ordinary shares may be entitled to the residual assets of the Company.
The Company has a number of share option schemes under which options to subscribe for the Company’s shares have been granted to Executive
Directors and certain senior Management (note 30).
Share premium
The share premium account is used to record the aggregate amount or value of premiums paid when the Company’s shares are issued/redeemed
at a premium.
Capital redemption reserve
The capital redemption reserve is used to maintain the Company’s capital following the purchase and cancellation of its own shares. During the
year, the Company repurchased nil of its own shares for cancellation (2021: nil).
Computacenter plc Annual Report and Accounts 2022 | 193
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
29 Issued capital and reserves continued
Own shares held
Own shares held comprise the following:
i) Computacenter Employee Share Ownership Plan (ESOP)
Shares in the Parent undertaking comprise 1,060,021 ordinary shares of 7⁵⁄₉ pence each in Computacenter plc (2021: 920,218) purchased by the
Computacenter Employee Share Ownership Plan (the Plan). The principal purpose of the Plan is to be funded with shares that will satisfy discretionary
executive share plans. The number of shares held represents 0.86 per cent of the Company’s issued share capital (2021: 0.75 per cent).
Since 31 December 2002, the definition of beneficiaries under the ESOP Trust has been expanded to include employees who have been awarded
options to acquire ordinary shares of 7⁵⁄₉ pence each in Computacenter plc under other employee share plans of the Group, namely the
Computacenter Service Group plc Approved Executive Share Option Plan, the Computacenter plc Employee Share Option Scheme 1998, the
Computacenter Service Group plc Unapproved Executive Share Option Scheme, the Computacenter Performance Related Share Option Scheme
1998, the Computacenter plc Sharesave Plus Scheme and any future similar share ownership schemes.
All costs incurred by the Plan are settled directly by Computacenter (UK) Limited and charged in the accounts as incurred.
The Plan Trustees have waived the dividends receivable in respect of 1,060,021 ordinary shares of 7⁵⁄₉pence each (2021: 920,218) that it owns
which are all unallocated shares.
ii) Treasury shares
The Company holds, in treasury, the ordinary shares purchased by way of tender offer on 14 February 2018. Following the purchase, the Company’s
issued share capital consisted of 122,687,970 ordinary shares of 7⁵⁄₉ pence each (2021: 122,687,970), each carrying one voting right, of which the
Company held 8,546,861 ordinary shares in treasury (2021: 8,546,861).
As at 31 December 2022, the total number of voting rights in the Company which may be used by shareholders as the denominator for the
calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company under the
Disclosure and Transparency Rules is 114,141,109 (2021: 114,141,109). The percentage of voting rights attributable to those shares it holds in
treasury following the share buy-back in 2018 is 6.97 per cent (2021: 6.97 per cent).
Translation and hedging reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the Financial Statements of foreign
subsidiaries. The hedging reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective in cash flow
hedges. Included within translation and hedging reserves is a hedging reserve debit balance of £1.7 million (2021: £0.2 million debit balance).
Non-controlling interests
The non-controlling amounts are as follows:
Applied Computer Solutions (ACS)
ProSys Information Systems, Inc (ProSys)
R.D. Trading Limited (RDC)
2022
£m
2.5
3.7
0.1
6.3
2021
£m
1.7
2.8
(0.2)
4.3
194 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 30 Share-based payments
Computacenter Performance Share Plan (PSP)
Under the Computacenter PSP, shares granted will be subject to certain performance conditions as described in the Annual Report on
Remuneration. As at 31 December 2022 the number of shares outstanding was as follows:
Date of grant
23/03/2012
20/03/2014
26/03/2015
22/03/2016
22/03/2017
21/03/2018
21/03/2018
21/03/2019
23/03/2020
23/03/2020
23/03/2020
11/05/2020
02/11/2020
22/03/2021
21/03/2021
21/03/2021
10/06/2021
21/03/2022
21/03/2022
21/03/2022
The following table illustrates the number (No.) of share options for the PSP Scheme:
PSP Scheme
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year***
Outstanding at the end of the year
Exercisable at the end of the year
Maturity date
23/03/2015
20/03/2017
26/03/2018
22/03/2019
22/03/2020
21/03/2021
21/03/2021
21/03/2022
21/03/2022
21/03/2023
21/03/2023
21/03/2023
21/03/2023
21/03/2024
21/03/2022
21/03/2023
21/03/2024
21/03/2025
21/03/2023
21/03/2024
Share price at
date of grant
433.0p
682.5p
720.0p
845.0p
736.5p
1182.67p
1182.67p
1192.00p
993.00p
993.00p
993.00p
1472.00p
2265.00p
2175.00p
2175.00p
2175.00p
2671.00p
2911.00p
2911.00p
2911.00p
2022
Number
outstanding
–
6,557
19,225
33,093
110,576
39,205
97,364
242,498
–
418,605
173,892
2,853
14,504
340,822
–
11,685
7,384
271,109
10,879
10,880
1,811,131
2021
Number
outstanding
1,685
18,513
33,267
64,761
182,625
83,642
97,364
484,082
24,303
429,244
173,892
2,853
14,504
353,966
11,684
11,685
7,384
–
–
–
1,995,454
2022
No.
2021
No.
1,995,454
297,424
(28,762)
(452,985)
1,811,131
1,949,901
384,719
(70,043)
(269,123)
1,995,454
548,518
481,857
*** The weighted average share price at the date of exercise for the options exercised was £28.25 (2021: £20.46).
The weighted average remaining contractual life for the options outstanding as at 31 December 2022 was 1.2 years (2021: 1.0 years).
Computacenter plc Annual Report and Accounts 2022 | 195
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
30 Share-based payments continued
Computacenter Sharesave Scheme (SAYE)
The Group operates a Sharesave Scheme which is available to all employees and full-time Executive Directors of the Group and its subsidiaries
who have worked for a qualifying period. All options granted under this scheme are satisfied at exercise by way of a transfer of shares from the
Computacenter Qualifying Employee Share Trust. During the year, 1,007,817 options were granted (2021: 672,082) with a fair value of £6,412,764
(2021: £4,461,737).
Under the scheme the following options have been granted and are outstanding at the year-end:
Date of grant
October 2015
October 2016
October 2017
October 2017
October 2018
October 2018
October 2019
October 2019
October 2019
October 2020
October 2020
October 2020
October 2021
October 2021
October 2021
December 2022
December 2022
December 2022
Exercisable between
01/12/2020 – 31/05/2021
01/12/2021 – 31/05/2022
01/12/2020 – 31/05/2021
01/12/2022 – 31/05/2023
01/12/2021 – 31/05/2022
01/12/2023 – 31/05/2024
01/12/2022 – 31/05/2023
01/12/2024 – 31/05/2025
23/10/2019 – 23/10/2021
01/12/2023 – 31/05/2024
01/12/2025 – 31/05/2026
01/12/2020 – 26/01/2023
01/12/2024 – 31/05/2025
01/12/2026 – 31/05/2027
01/12/2021 – 25/01/2024
01/12/2022 – 01/06/2026
01/12/2022 – 01/06/2028
01/12/2022 – 07/05/2025
Share
price
600.00p
577.00p
888.00p
789.00p
1,186.00p
1,054.00p
1,138.00p
1,011.00p
1,138.00p
2,092.00p
1,860.00p
2,217.00p
2,571.00p
2,286.00p
2,468.00p
1,899.00p
1,899.00p
1,899.00p
2022
Number
outstanding
–
–
–
231,920
–
452,689
114,795
553,222
–
183,556
472,070
10,623
150,632
410,593
31,138
271,287
684,333
48,194
3,615,052
2021
Number
outstanding
–
110,580
–
583,494
67,830
466,853
274,150
585,518
12,856
204,399
507,477
13,719
170,353
463,513
36,057
–
–
–
3,496,799
The following table illustrates the number (No.) and weighted average exercise price (WAEP) of share options for the Sharesave Scheme:
Sharesave Scheme
Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year***
Outstanding at the end of the year
Exercisable at the end of the year
2022
No.
3,496,799
1,007,817
(183,219)
(706,345)
3,615,052
2022
WAEP
£14.30
£16.33
£19.03
£8.82
£15.70
2021
No.
3,726,208
672,082
(114,095)
(787,396)
3,496,799
2021
WAEP
£11.20
£23.68
£13.16
£7.80
£14.30
357,535
£9.51
190,682
£8.55
Note
*** The weighted average share price at the date of exercise for the options exercised was £22.08 (2021: £27.21).
The weighted average remaining contractual life for the options outstanding as at 31 December 2022 was 2.3 years (2021: 3.0 years).
196 | Computacenter plc Annual Report and Accounts 2022
Financial Statements The fair value of the PSP, DBP and SAYE plans are estimated as at the date of grant using the Black-Scholes valuation model. The following tables
give the assumptions made during the years ended 31 December 2022 and 31 December 2021:
2022
Nature of the
arrangement
Date of grant
Number of
instruments
granted
Exercise price
Share price at
date of grant
Contractual life
(years)
Vesting
conditions
Expected
volatility
Expected option
life at grant date
(years)
Risk-free
interest rate
Dividend yield
Fair value per
granted
instrument
determined at
grant date
PSP
scheme
21/03/22
PSP
scheme
21/03/22
PSP
scheme
21/03/22
PSP
scheme
21/03/22
PSP
scheme
21/03/22
DBP
scheme
21/03/22
DBP
scheme
21/03/22
SAYE
scheme
01/12/22
SAYE
scheme
01/12/22
SAYE
scheme
01/12/22
101,562
nil
143,189
nil
7,245
nil
1,992
nil
21,677
nil
10,879
nil
10,880
nil
49,100
£16.65
272,829
£17.72
685,888
£15.75
£29.11
£29.11
£29.11
£29.11
£29.11
£29.11
£29.11
£18.99
£18.99
£18.99
3
See note 1
below
3
See page 127
of the Annual
Report on
Remuneration
3
3
3
Three-year
service period
Three-year
service period
See note 1
below
1
See page 127
of the Annual
Report on
Remuneration
2
See page 127
of the Annual
Report on
Remuneration
2
Two-year
service period
and savings
requirement
3
Three-year
service period
and savings
requirement
5
Five-year
service period
and savings
requirement
n/a
n/a
n/a
n/a
n/a
n/a
n/a
28.80%
38.10%
37.30%
3
n/a
2.1%
3
n/a
2.1%
3
n/a
2.1%
3
n/a
2.1%
3
n/a
2.1%
1
n/a
2.1%
2
n/a
2.1%
2
3
5
0.45%
4.25%
0.45%
4.25%
0.45%
4.25%
£27.32
£27.32
£27.32
£27.32
£27.32
£28.50
£27.90
£4.01
£5.16
£7.01
Computacenter plc Annual Report and Accounts 2022 | 197
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
30 Share-based payments continued
2021
Nature of the
arrangement
Date of grant
Number of
instruments
granted
Exercise price
Share price at
date of grant
Contractual life
(years)
Vesting
conditions
Expected
volatility
Expected option
life at grant date
(years)
Risk-free
interest rate
Dividend yield
Fair value per
granted
instrument
determined at
grant date
PSP
scheme
22/03/21
PSP
scheme
22/03/21
PSP
scheme
22/03/21
PSP
scheme
10/06/21
PSP
scheme
10/06/21
DBP
scheme
21/03/21
DBP
scheme
21/03/21
SAYE
scheme
25/10/21
SAYE
scheme
25/10/21
SAYE
scheme
25/10/21
142,078
nil
198,076
nil
13,812
nil
1,425
nil
5,959
nil
11,684
nil
11,685
nil
36,057
£24.68
171,506
£25.71
464,519
£22.86
£21.75
£21.75
£21.75
£26.71
£26.71
£21.75
£21.75
£27.40
£27.40
£27.40
3
See note 1
below
3
See page 120
of the Annual
Report on
Remuneration
in the 2021
Annual Report
and Accounts
3
3
3
Three-year
service period
Three-year
service period
See note 1
below
1
See page 120
of the Annual
Report on
Remuneration
in the 2021
Annual Report
and Accounts
2
See page 120
of the Annual
Report on
Remuneration
in the 2021
Annual Report
and Accounts
2
3
5
Two-year
service period
and savings
requirement
Three-year
service period
and savings
requirement
Five-year
service period
and savings
requirement
n/a
n/a
n/a
n/a
n/a
n/a
n/a
40.30%
39.00%
36.10%
3
3
3
3
3
1
2
2
3
5
n/a
0.60%
n/a
0.60%
n/a
0.60%
n/a
0.50%
n/a
0.50%
n/a
0.60%
n/a
0.60%
3.89%
1.21%
3.89%
1.21%
3.89%
1.21%
£21.34
£21.34
£21.34
£26.30
£26.30
£21.61
£21.47
£5.87
£5.93
£6.96
Note
1.
Issued under the terms of the Computacenter Performance Share Plan 2005, as amended at the AGMs held on 19 May 2015 and 18 May 2018. One-quarter of the shares will vest if the
compound annual EPS growth over the performance period equals five per cent per annum. One-half of the shares will vest if the compound annual EPS growth over the performance
period equals 7.5 per cent and the shares will vest in full if the compound annual EPS growth over the performance period equals 10 per cent. If the compound annual EPS growth over the
performance period is between five and 10 per cent, shares awarded will vest on a straight-line basis. The performance period usually covers a period of three years from 1 January of
the year the award is granted.
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur.
The expected volatility reflects the assumption that the recent historical volatility is indicative of future trends, which may not necessarily be the
actual outcome. No other features of the options granted were incorporated into the measurement of fair value.
198 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 31 Analysis of changes in net funds
Cash and short-term deposits
Bank overdrafts
Cash and cash equivalents
Bank loans and credit facility
Adjusted net funds3 (excluding lease liabilities)
Lease liabilities
Net funds
The financing cash flows included in the table above are detailed as follows:
At
1 January
2022
£m
285.2
(12.0)
273.2
(31.8)
241.4
(146.1)
95.3
Cash flows
in year
£m
(2.9)
1.3
(1.6)
12.9
11.3
55.2
66.5
Non-cash
flow
£m
–
–
–
–
–
(28.7)
(28.7)
Exchange
differences
£m
(7.2)
–
(7.2)
(1.2)
(8.4)
(7.5)
(15.9)
At
31 December
2022
£m
275.1
(10.7)
264.4
(20.1)
244.3
(127.1)
117.2
Balance at 1 January 2022
Changes from financing cash flows
Interest paid
Interest paid on lease liabilities
Repayment of loans
Repayment of credit facility
Payment of capital element of lease liabilities
Bank overdraft reduction
New loans relating to acquisition of a subsidiary
New borrowings – bank loans
Total changes from financing cash flows
The effect of changes in foreign exchange rates
Other changes
New leases
New leases relating to acquisition of a subsidiary
Early termination of leases
Interest expense
Total other changes
Balance at 31 December 2022
Cash and short-term deposits
Bank overdrafts
Cash and cash equivalents
Bank loans and credit facility
Adjusted net funds3 (excluding lease liabilities)
Lease liabilities
Net funds
Bank loans
(24.8)
Credit facility
(7.0)
Bank overdraft
(12.0)
Others
–
Lease
liabilities
(146.1)
Liabilities from
financing
activities
(189.9)
0.8
–
9.6
–
–
–
(3.7)
–
6.7
(1.2)
–
–
–
(0.8)
(0.8)
(20.1)
1.4
–
–
11.0
–
–
–
(4.0)
8.4
–
–
–
–
(1.4)
(1.4)
–
At
1 January
2021
£m
309.8
–
309.8
(121.2)
188.6
(137.5)
51.1
–
–
–
–
–
1.3
–
–
1.3
–
–
–
–
–
–
(10.7)
Cash flows
in year
£m
(17.1)
(12.0)
(29.1)
89.0
59.9
55.4
115.3
0.7
–
–
–
–
–
–
–
0.7
–
–
–
–
(0.7)
(0.7)
–
–
4.9
–
–
50.3
–
–
–
55.2
(7.5)
(45.0)
(0.8)
22.0
(4.9)
(28.7)
(127.1)
2.9
4.9
9.6
11.0
50.3
1.3
(3.7)
(4.0)
72.3
(8.7)
(45.0)
(0.8)
22.0
(7.8)
(31.6)
(157.9)
Non-cash
flow
£m
–
–
–
–
–
(71.5)
(71.5)
Exchange
differences
£m
(7.5)
–
(7.5)
0.4
(7.1)
7.5
0.4
At
31 December
2021
£m
285.2
(12.0)
273.2
(31.8)
241.4
(146.1)
95.3
Computacenter plc Annual Report and Accounts 2022 | 199
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
31 Analysis of changes in net funds continued
The financing cash flows included in the table above are detailed as follows:
Balance at 1 January 2021
Changes from financing cash flows
Interest paid
Interest paid on lease liabilities
Repayment of loans
Repayment of credit facility
Payment of capital element of lease liabilities
Bank overdraft
New borrowings – bank loan
Total changes from financing cash flows
The effect of changes in foreign exchange rates
Other changes
New leases
New leases relating to acquisition of a subsidiary
Early termination of leases
Interest expense
Total other changes
Balance at 31 December 2021
Bank loans
(62.8)
Credit
facility
(58.4)
Bank overdraft
–
Others
–
Lease
liabilities
(137.5)
Liabilities from
financing
activities
(258.7)
0.9
–
48.6
–
–
–
(10.7)
38.8
0.1
–
–
–
(0.9)
(0.9)
(24.8)
1.2
–
–
51.1
–
–
–
52.3
0.3
–
–
–
(1.2)
(1.2)
(7.0)
–
–
–
–
–
(12.0)
–
(12.0)
–
–
–
–
–
–
(12.0)
0.2
–
–
–
–
–
–
0.2
–
–
–
–
(0.2)
(0.2)
–
–
5.2
–
–
50.2
–
–
55.4
7.5
(70.2)
(1.4)
5.3
(5.2)
(71.5)
(146.1)
2.3
5.2
48.6
51.1
50.2
(12.0)
(10.7)
134.7
7.9
(70.2)
(1.4)
5.3
(7.5)
(73.8)
(189.9)
32 Capital commitments
As at 31 December 2022, the Group had a £3.4 million commitment for capital expenditure (2021: £1.2 million).
33 Pensions and other post-employment benefit plans
The Group operates a defined contribution pension scheme available to all UK employees and similar schemes are operating, as appropriate for
the jurisdiction, for North America and Germany. The amount recognised as an expense for this plan is detailed in note 9.
The Group has a provision against the retirement benefit obligations in France under the Indemnités de Fin de Carrière (IFC) as described in
note 2.12.3 Economic outflows under the obligation only occur if eligible employees reach the statutory retirement age whilst still in employment
or are made redundant. The Group made £0.5 million of payments during 2022 under this obligation (2021: £0.3 million).
In estimating the provision required, Management is required to make a number of assumptions. The key areas of estimation uncertainty are the
discount rate applied to future cash flows, the turnover rate of employed personnel and rate of salary increases over the length of their projected
employment. The level of unrealised actuarial gains or losses is sensitive to changes in the discount rate, which is affected by market conditions
and therefore subject to variation. Management makes use of an independent actuarial valuation in reaching its conclusions.
The net liability recognised in the Consolidated Balance Sheet as at 31 December 2022 in respect of the Group’s French retirement benefit
obligations under the IFC was £23.0 million (2021: £21.8 million). Key movements during the year include a charge to the Consolidated Income
Statement of £2.2 million (2021: £1.6 million) for the service cost and an actuarial gain taken through reserves of £1.7 million (2021: £1.2 million).
The key driver of actuarial gain this year was the change in experience and financial assumptions, mainly due to a change in the discount rate
assumption used in the actuarial valuation.
200 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Total defined benefit liability
Movements in total defined benefit liability:
Balance at 1 January
Included in Consolidated Income Statement
Current service cost
Interest cost
Included in Consolidated Statement of Comprehensive Income
Remeasurements loss
Actuarial (gain)/loss arising from:
– Changes in demographic assumptions
– Change in financial assumptions
– Experience adjustment
Effect of movements in exchange rates
Other
Benefits paid
Balance at 31 December
Actuarial assumptions
The following are the principal actuarial assumptions at 31 December (expressed as weighted averages):
Discount rate
Future salary growth
Turnover rates:
– Non-managers
– Supervisors
– Executives
2022
£m
23.0
2022
£m
21.8
2.0
0.2
2.2
(1.7)
6.7
(8.7)
0.3
1.2
(0.5)
(0.5)
(0.5)
23.0
2022
%
3.8
4.0
5.7
2.7
2.7
2021
£m
21.8
2021
£m
23.3
1.5
0.1
1.6
(1.2)
1.0
(1.6)
(0.6)
(1.6)
(2.8)
(0.3)
(0.3)
21.8
2021
%
1.0
2.0
5.7
2.7
2.7
At 31 December 2022, the discount rate used was 3.8 per cent (2021: 1.0 per cent) with reference to the iBoxx € Corporate AA 10y + index.
Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have
affected the defined benefit obligation by the amounts shown below.
Discount rate
Future salary growth
Turnover rates
2022
£m
2021
£m
Increase (1%)
2.3
(2.7)
2.5
Decrease (1%)
(2.8)
2.4
(2.9)
Increase (1%)
2.5
(3.0)
1.9
Decrease (1%)
(3.0)
2.5
(2.3)
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the
sensitivity of the assumptions shown.
Computacenter plc Annual Report and Accounts 2022 | 201
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
34 Related-party transactions
During the year, the Group entered into transactions, in the ordinary course of business, with related parties. Transactions entered into are as
described below:
Biomni provides the Computacenter e-procurement system used by many of Computacenter’s major customers. An annual fee has been agreed
on a commercial basis for use of the software for each installation. Both Peter Ogden and Philip Hulme are Directors of and have a material
interest in Biomni Limited.
The table below provides the total amount of transactions that have been entered into with related parties for the relevant financial year:
Biomni Limited
Sales to related parties
Purchase from related parties
2022
£m
–
0.6
2021
£m
–
0.6
There is no outstanding balance as at 31 December 2022 (31 December 2021: nil).
Terms and conditions of transactions with related parties
Outstanding balances at the year end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any
related-party receivables. The Group has not recognised any allowance for expected credit losses relating to amounts owed by related parties.
This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the
related party operates.
Compensation of key management personnel (including Directors)
The Board of Directors is identified as the Group’s key management personnel. Please refer to the information given in the remuneration table
in the Annual Report on Remuneration on page 122 for details of compensation given. A summary of the compensation of key management
personnel is provided below:
Short-term employee benefits
Social security costs
Share-based payment transactions
Pension costs
Total compensation paid to key management personnel
2022
£m
2.1
0.5
3.4
0.1
6.1
2021
£m
2.8
0.4
3.9
0.1
7.2
The interests of the key management personnel in the Group’s share incentive schemes are disclosed in the Annual Report on Remuneration on
pages 125 to 128.
35 Contingent liabilities
The Company has given a guarantee in the normal course of business to suppliers of subsidiary undertakings for an amount not exceeding
£192.7 million (2021: £126.3 million).
During the ordinary course of business, the Group can be subject to complaints and threatened or actual legal proceedings brought primarily by
customers or vendors, but also on behalf of current or former employees, investors or other third parties, as well as legal and regulatory reviews,
challenges, investigations and enforcement actions, both in the UK and overseas.
Where material, such matters are periodically reassessed, with the assistance of external professional advisers where appropriate, to determine
the likelihood of the Group incurring a liability. In those instances where it is concluded that it is more likely than not that a payment will be made,
a provision is established to Management’s best estimate of the amount required at the relevant balance sheet date. In some cases it will not be
possible to form a view, for example because the facts are unclear or because further time is needed to properly assess the merits of the case,
and no provisions are held in relation to such matters.
In these circumstances, specific disclosure in relation to a contingent liability will be made where material. However, the Group does not currently
expect the final outcome of any such case to have a material adverse effect on its financial position, operations or cash flows either separately or
in aggregate.
202 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Company Balance Sheet
As at 31 December 2022
Non-current assets
Intangible assets
Investment property
Investments
Current assets
Debtors
Prepayments
Total assets
Current liabilities
Trade and other payables
Income tax payable
Total liabilities
Net assets
Capital and reserves
Issued share capital
Share premium
Capital redemption reserve
Merger reserve
Own shares held
Retained earnings
Shareholders’ equity
Note
3
4
5
6
2022
£m
8.2
10.9
475.0
494.1
0.1
2.5
2.6
496.7
52.3
0.9
53.2
53.2
443.5
9.3
4.0
75.0
55.9
(127.7)
427.0
443.5
2021
£m
16.7
11.9
443.0
471.6
0.1
0.3
0.4
472.0
73.8
1.7
75.5
75.5
396.5
9.3
4.0
75.0
55.9
(115.5)
367.8
396.5
The profit for the year ended 31 December 2022 included in the accounts of the Company is £147.1 million (2021: £2.3 million).
The accompanying notes on pages 205 to 208 form an integral part of these financial statements.
Approved by the Board on 6 April 2023.
MJ Norris
Chief Executive Officer
FA Conophy
Group Finance Director
Computacenter plc Annual Report and Accounts 2022 | 203
Company Statement of Changes in Equity
For the year ended 31 December 2022
At 1 January 2022
Profit for the year
Total comprehensive income for the year
Exercise of options
Share options granted to employees of
subsidiary companies
Purchase of own shares
Equity dividends
At 31 December 2022
At 1 January 2021
Profit for the year
Total comprehensive income
Exercise of options
Share options granted to employees of
subsidiary companies
Purchase of own shares
Equity dividends
At 31 December 2021
Issued
share
capital
£m
9.3
–
–
–
–
–
–
9.3
9.3
–
–
–
–
–
–
9.3
Share
premium
£m
4.0
–
–
–
Capital
redemption
reserve
£m
75.0
–
–
–
Merger
reserve
£m
55.9
–
–
–
Own shares
held
£m
(115.5)
–
–
22.2
Retained
earnings
£m
367.8
147.1
147.1
(16.0)
Shareholders’
equity
£m
396.5
147.1
147.1
6.2
–
–
–
4.0
4.0
–
–
–
–
–
–
4.0
–
–
–
75.0
75.0
–
–
–
–
–
–
75.0
–
–
–
55.9
55.9
–
–
–
–
–
–
55.9
–
(34.4)
–
(127.7)
(111.7)
–
–
21.7
–
(25.5)
–
(115.5)
8.6
–
(80.5)
427.0
432.8
2.3
2.3
(15.5)
10.6
–
(62.4)
367.8
8.6
(34.4)
(80.5)
443.5
465.3
2.3
2.3
6.2
10.6
(25.5)
(62.4)
396.5
The accompanying notes on pages 205 to 208 form an integral part of these financial statements.
204 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Notes to the Company Financial Statements
For the year ended 31 December 2022
1 Authorisation of Financial Statements
The Parent Company’s Financial Statements of Computacenter plc (the Company) for the year ended 31 December 2022 were authorised for issue
by the Board of Directors on 6 April 2023 and the Balance Sheet was signed on the Board’s behalf by MJ Norris and FA Conophy. Computacenter plc
is a public limited company incorporated and domiciled in England and Wales. The Company’s ordinary shares are traded on the London
Stock Exchange.
2 Summary of significant accounting policies
Basis of preparation and statement of compliance with FRS 101
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101).
The financial statements are prepared under the historical cost convention.
No profit and loss account is presented by the Company as permitted by section 408 of the Companies Act 2006. The results of Computacenter plc
are included in the Consolidated Financial Statements of Computacenter plc which are available from Computacenter plc, Hatfield Business Park,
Hatfield Avenue, Hatfield, AL10 9TW. The accounting policies which follow set out those policies which apply in preparing the Financial Statements
for the year ended 31 December 2022. The Financial Statements are prepared in pound sterling and all values are rounded to the nearest hundred
thousand except when otherwise indicated.
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards (adopted IFRSs), but makes amendments where necessary in order to comply with the Companies Act 2006
and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
(a) the requirements of paragraphs 45(b) and 46-52 of IFRS 2 Share-based Payment;
(b) the requirements of paragraphs 62, B64(d), B64(e), B64(g), B64(h), B64(j) to B64(m), B64(n)(ii), B64 (o)(ii), B64(p), B64(q)(ii), B66 and B67 of
IFRS 3 Business Combinations;
(d) the requirements of IFRS 7 Financial Instruments: Disclosures;
(e) the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
(f) the requirement in paragraph 38 of IAS 1 Presentation of Financial Statements to present comparative information in respect of:
(i) paragraph 79(a)(iv) of IAS 1;
(ii) paragraph 73(e) of IAS 16 Property, Plant and Equipment;
(iii) paragraph 118(e) of IAS 38 Intangible Assets; and
(iv) paragraphs 76 and 79(d) of IAS 40 Investment Property.
(g) the requirements of paragraphs 10(d), 10(f), 39(c) and 134-136 of IAS 1 Presentation of Financial Statements;
(h) the requirements of IAS 7 Statement of Cash Flows;
(i) the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
(j) the requirements of paragraph 17 of IAS 24 Related Party Disclosures;
(k) the requirements in IAS 24 Related Party Disclosures to disclose related-party transactions entered into between two or more members of
a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member; and
(l) the requirements of paragraphs 134(d)-134(f) and 135(c)-135(e) of IAS 36 Impairment of Assets.
As applicable, equivalent disclosures are included in the Consolidated Financial Statements of the Group in which the entity is consolidated.
Intellectual property
Licences purchased in respect of intellectual property are capitalised, classified as an intangible asset on the Balance Sheet and amortised on
a straight-line basis over the period of the licence, normally 20 years.
Depreciation of fixed assets
Freehold land is not depreciated. Depreciation is provided on all other tangible fixed assets at rates calculated to write off the cost, less
estimated residual value, of each asset evenly over its expected useful life, as follows:
Freehold buildings
25 years
Investment property
Investment property is defined as land and/or buildings held by the Company to earn rental income or for capital appreciation or both, rather than
for sale in the ordinary course of business or for use in supply of goods or services or for administrative purposes. The Company recognises any
part of an owned (or leased under a finance lease) property that is leased to third-parties as investment property, unless it represents an
insignificant portion of the property.
Investment property is measured initially at cost including transaction costs. Subsequent to initial recognition, the Company elected to measure
investment property at cost less accumulated depreciation and accumulated impairment losses, if any (i.e. applying the same accounting
policies, including useful lives, as for property, plant and equipment). The fair values, which reflect the market conditions at the balance sheet
date, are disclosed in note 4.
Computacenter plc Annual Report and Accounts 2022 | 205
Notes to the Company Financial Statements continued
For the year ended 31 December 2022
2 Summary of significant accounting policies continued
Investments
Fixed-asset investments are shown at cost less provision for impairment.
Impairment of assets
The carrying values of assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not
be recoverable.
Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the profit and loss account.
Amounts owed by/to subsidiary undertakings
Intra-Group receivables are recognised initially at fair value, and subsequently at amortised cost using the effective interest rate method, less an
allowance for any uncollectable amounts. The Company assesses for doubtful debts (impairment) using the expected credit losses model as
required by IFRS 9. For intra-Group receivables, the Company applies the simplified approach which requires expected lifetime losses to be
recognised from the initial recognition of the receivables.
Intra-Group payables are recognised initially at fair value, and subsequently at amortised cost using the effective interest rate method.
Share-based payment transactions
The accounting policy in relation to share-based payment transactions is disclosed in full in the Consolidated Financial Statements. In addition,
the financial effect of awards by the Company of options over its equity shares to employees of subsidiary undertakings is recognised by the
Company in its individual financial statements as an increase in its investment in subsidiaries, with a credit to equity equivalent to the IFRS 2 cost
in subsidiary undertakings.
On transition to IFRS, the Group did not apply the measurement rules of IFRS 2 to equity-settled awards granted before 7 November 2002 or
granted after that date and vested before 1 January 2005. However, later modifications of such equity instruments are measured under IFRS 2.
Taxation
Corporation tax payable is provided on taxable profits at the current tax rate. Where Group relief is surrendered from other subsidiaries in the
Group, the Company is required to pay to the surrendering company an amount equal to the loss surrendered multiplied by the current tax rate.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions
or events that result in an obligation to pay more, or a right to pay less, tax in the future have occurred at the balance sheet date.
Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in periods in which timing differences reverse,
based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Own shares held
Shares in the Company, held by the Company, are classified in shareholders’ equity as own shares held and are recognised at cost. Consideration
received for the sale of such shares is also recognised in equity, with any difference between the proceeds from sale and the original cost being
taken to revenue reserves. No gain or loss is recognised in the performance statements on the purchase, sale, issue or cancellation of equity
shares.
Merger accounting and the merger reserve
Prior to 1 January 2013, certain significant business combinations were accounted for using the pooling of interests method (or merger accounting),
which treats the merged groups as if they had been combined throughout the current and comparative accounting periods. Merger accounting
principles for these combinations gave rise to a merger reserve in the balance sheet, being the difference between the nominal value of new
shares issued by the Parent Company for the acquisition of the shares of the subsidiary and the subsidiary’s own share capital and share
premium account. These transactions have not been restated, as permitted by the IFRS 1 transitional arrangements.
The merger reserve is also used where more than 90 per cent of the shares in a subsidiary are acquired and the consideration includes the issue
of new shares by the Company, thereby attracting merger relief under the Companies Act 1985 and, from 1 October 2009, the Companies Act 2006.
The merger reserve of £55.9 million was created on acquisition of Computacenter (UK) Limited on 14 October 1995 by Computacenter plc.
Immediately following the acquisition, this merger reserve was reduced to nil in the Group’s Consolidated Financial Statements due to the write
off of goodwill arising on the consolidation of Computacenter (UK) Limited.
206 | Computacenter plc Annual Report and Accounts 2022
Financial Statements 3
Intangible assets
Cost
At 1 January 2022 and 31 December 2022
Accumulated amortisation
At 1 January 2022
Charge in the year
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
4
Investment properties
Cost
At 1 January 2022 and 31 December 2022
Accumulated depreciation
At 1 January 2022
Charge in the year
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
Intellectual
property
£m
169.7
153.0
8.5
161.5
8.2
16.7
Freehold land
and buildings
£m
42.4
30.5
1.0
31.5
10.9
11.9
Investment property represents a building owned by the Company that is leased to Computacenter (UK) Ltd, a fully owned subsidiary of the Company.
The fair value of investment property amounted to £33.5 million at 31 December 2022 (2021: £38.7 million). The fair values for disclosure purposes
have been determined using either the support of qualified independent external valuers or by internal valuers with the necessary recognised
and relevant professional qualification, applying a combination of the present value of future cash flows and observable market values of
comparable properties. Management’s most recent external valuation of this property took place in February 2016. As this property is leased
to a subsidiary and is carried at depreciated cost value, an updated external valuation was not sought at 31 December 2022.
Computacenter plc Annual Report and Accounts 2022 | 207
Notes to the Company Financial Statements continued
For the year ended 31 December 2022
5
Investments
Cost
At 31 December 2021
Additions
Impairment
Share-based payments
At 31 December 2022
Amounts provided
At 31 December 2021
Provided during the year
At 31 December 2022
Net book value
At 31 December 2022
At 31 December 2021
Investments in
subsidiary
undertakings
£m
Loans to
subsidiary
undertakings
£m
565.0
28.0
–
4.0
597.0
122.0
–
122.0
475.0
443.0
2.8
–
–
–
2.8
2.8
–
2.8
–
–
Total
£m
567.8
28.0
–
4.0
599.8
124.8
–
124.8
475.0
443.0
During the year, the Company made an investment of $33.6 million into Computacenter Holdings Inc., a fully-owned US subsidiary, by way of
a capital contribution.
The carrying values of investments are reviewed annually or when events or changes in circumstances indicate that the carrying value may not
be recoverable. The Company assesses if such indicators exist at the end of each reporting period by considering external and internal factors
including whether the carrying amount of an investment exceeds the investee’s net assets or if a dividend exceeds the total comprehensive
income of the investee.
Details of the principal investments at 31 December in which the Company holds more than 20 per cent of the nominal value of ordinary share
capital are given in note 18 to the Consolidated Financial Statements.
6 Trade and other payables
Accruals
Amount owed to subsidiary undertaking
2022
£m
0.3
52.0
52.3
2021
£m
–
73.8
73.8
The movement in amount owed to subsidiary undertaking is mainly due to repayment of loans.
7 Financial liabilities
Bank loans
On 9 December 2022, Computacenter Group entered into a new multicurrency revolving loan facility of £200.0 million in order to rationalise its
treasury operations. The new facility has a term of five years plus two one-year extension options exercisable on the first and second anniversary
of the facility. The Company paid arrangement fees of £2.5 million which are included within Prepayments on the Balance Sheet and amortised
over the term of the facility. The facility was not used and the amount outstanding as at 31 December 2022 was £nil (2021: £nil).
A loan of £100.0 million was drawn at a 2.05 per cent interest rate to finance the acquisition of Computacenter United States Inc. Repayment of this
loan commenced in the first half of 2019 and was fully paid in 2021.
8 Contingent liabilities
The Company has given a guarantee in the normal course of business to suppliers of subsidiary undertakings for an amount not exceeding
£192.7 million (2021: £126.8 million).
The Company has provided cross guarantees in respect of certain bank loans and overdrafts of its subsidiary undertakings. The amount
outstanding at 31 December 2022 is £nil (2021: £nil).
9 Auditor’s remuneration
All auditor’s remuneration is borne by Computacenter (UK) Ltd, a fully-owned UK subsidiary of the Company. The amount payable to the auditor in
respect of the audit of the Company is £0.2 million (2021: £0.1 million), all of which is payable to KPMG LLP. The Company is exempt from providing
details of non-audit fees as it prepares Consolidated Financial Statements in which the details are required to be disclosed on a consolidated
basis (see note 7 to the Consolidated Financial Statements).
10 Distributable reserves
Dividends are paid from the standalone balance sheet of Computacenter plc, and as at 31 December 2022, the distributable reserves are
approximately £246.3 million (2021: £199.3 million).
208 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Disclaimer: forward-looking statements
This Annual Report and Accounts includes statements that are, or may be deemed to be, ‘forward-looking statements’. These forward-looking
statements can be identified by the use of forward-looking terminology, including the terms ‘anticipates’, ‘believes’, ‘estimates’, ‘expects’, ‘intends’,
‘may’, ‘plans’, ‘projects’, ‘should’ or ‘will’, or, in each case, their negative or other variations or comparable terminology, or by discussions of
strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts.
They appear in a number of places throughout this Annual Report and Accounts and include, but are not limited to, statements regarding the
Group’s intentions, beliefs or current expectations concerning, amongst other things, results of operations, prospects, growth, strategies and
expectations of its respective businesses.
By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-
looking statements are not guarantees of future performance and the actual results of the Group’s operations and the development of the
markets and the industry in which they operate or are likely to operate and their respective operations may differ materially from those
described in, or suggested by, the forward-looking statements contained in this Annual Report and Accounts. In addition, even if the results
of operations and the development of the markets and the industry in which the Group operates are consistent with the forward-looking
statements contained in this Annual Report and Accounts, those results or developments may not be indicative of results or developments in
subsequent periods. A number of factors could cause results and developments to differ materially from those expressed or implied by the
forward-looking statements, including, without limitation, those risks in the risk factor section of this Annual Report and Accounts, as well as
general economic and business conditions, industry trends, competition, changes in regulation, currency fluctuations or advancements in
research and development.
Forward-looking statements speak only as of the date of this Annual Report and Accounts and may, and often do, differ materially from actual
results. Any forward-looking statements in this Annual Report and Accounts reflect the Group’s current view with respect to future events and are
subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group’s operations, results of operations
and growth strategy.
Neither Computacenter plc nor any of its subsidiaries undertakes any obligation to update the forward-looking statements to reflect actual
results or any change in events, conditions or assumptions or other factors unless otherwise required by applicable law or regulation.
Computacenter plc Annual Report and Accounts 2022 | 209
Group five-year financial review
Group five-year summary results
As of 31 December
Revenue
Adjusted1 operating profit
Adjusted1 profit before tax
Profit for the year
Adjusted1 diluted earnings per share
Adjusted net funds3
Headcount (monthly average)
2018
£m
4,352.6
118.8
118.2
80.9
75.7p
66.2
15,117
2019
£m
5,052.8
151.5
146.3
101.6
92.5p
137.1
15,816
2020
£m
5,441.3
206.4
200.5
154.2
126.4p
188.6
16,764
2021
£m
5,034.5*
262.8
255.6
186.5
165.6p
241.4
17,496
2022
£m
6,470.5
269.1
263.7
184.2
169.7p
244.3
18,708
* Revenue for the year ended 31 December 2021 has been restated to reflect the change in revenue recognition policies relating to software licences and third-party services agreements
resold on a standalone basis following the finalisation of an agenda decision by the IFRS Interpretation Committee.
Group five-year summary balance sheet
As at 31 December
Tangible assets
Right-of-use assets
Intangible assets
Investment in associate
Deferred tax asset
Non-current prepayments
Inventories
Trade and other receivables (including income tax receivables)
Prepayments and accrued income
Derivative financial instruments
Cash and short-term deposits
Current liabilities
Non-current liabilities
Net assets
Financial calendar
Title
AGM
Ex-dividend date
Dividend record date
Dividend payment date
Interim results announcement
2018
£m
106.3
–
184.6
0.1
9.6
3.5
99.5
1,180.4
171.2
3.9
200.4
(1,351.1)
(160.6)
447.8
2019
£m
101.4
110.9
175.6
0.1
9.2
3.5
122.2
996.5
176.3
3.3
217.9
(1,257.8)
(166.6)
492.5
2020
£m
107.0
129.6
274.7
0.1
10.1
23.6
211.3
1,105.9
228.2
1.6
309.8
(1,586.2)
(184.8)
630.9
2021
£m
90.0
138.1
273.7
0.1
30.2
16.6
341.3
1,284.0
251.1
3.6
285.2
(1,783.7)
(185.4)
744.8
2022
£m
94.1
119.4
342.1
0.1
11.3
19.4
417.7
1,727.8
265.7
7.5
275.1
(2,246.8)
(161.4)
872.0
Date
17 May 2023
15 June 2023
16 June 2023
14 July 2023
8 September 2023
210 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Corporate information
Board of Directors
Peter Ryan (Non-Executive Chair)
Mike Norris (Chief Executive Officer)
Tony Conophy (Group Finance Director)
Rene Haas (Non-Executive Director)(Resigned
on 1 December 2022)
Philip Hulme (Non-Executive Director)
Ljiljana Mitic (Non-Executive Director)
Peter Ogden (Non-Executive Director)
Ros Rivaz (Senior Independent Director)
Pauline Campbell (Non-Executive Director)
René Carayol (Non-Executive Director)
(Appointed on 1 November 2022)
Principal bankers
Barclays Bank plc
1 Churchill Place
Canary Wharf
London
E14 5HP
United Kingdom
Tel: +44 (0) 345 7345 345
HSBC Bank plc
8 Canada Square
London
E14 5HQ
United Kingdom
Tel: +44 (0) 345 740 4404
Auditor
KPMG LLP
15 Canada Square
London
E14 5GL
United Kingdom
Tel: +44 (0) 20 7311 1000
Company Secretary
Simon Pereira
Registered office
Hatfield Avenue
Hatfield
Hertfordshire
AL10 9TW
United Kingdom
Tel: +44 (0) 1707 631000
Stockbrokers and investment bankers
Credit Suisse
One Cabot Square
London
E14 4QJ
United Kingdom
Tel: +44 (0) 20 7888 8888
Investec Investment Banking
30 Gresham Street
London
EC2V 7QP
United Kingdom
Tel: +44 (0) 20 7597 4000
Registrar and transfer office
Equiniti
Aspect House
Spencer Road
Lancing
West Sussex
BN99 6DA
United Kingdom
Tel: +44 (0) 371 384 2027
Solicitor
Linklaters
One Silk Street
London
EC2Y 8HQ
United Kingdom
Tel: +44 (0) 20 7456 2000
Company registration number
3110569
Internet address
Computacenter Group
www.computacenter.com
Computacenter plc Annual Report and Accounts 2022 | 211
Principal offices
UK and Group headquarters
Computacenter plc
Hatfield Avenue
Hatfield
Hertfordshire
AL10 9TW
United Kingdom
Tel: +44 (0) 1707 631000
Belgium
Computacenter NV/SA
Ikaroslaan 31
B-1930 Zaventem
Belgium
Tel: +32 (0) 2 704 9411
France
Computacenter France SAS
229 rue de la Belle Étoile
ZI Paris Nord II
BP 52387
95943 Roissy CDG Cedex
France
Tel: +33 (0) 1 48 17 41 00
Germany
Computacenter AG & Co. oHG
Computacenter Park 1
50170 Kerpen
Germany
Tel: +49 (0) 2273 5970
Computacenter AG
Kattenbug 2
50667 Köln
Germany
Tel: +49 (0) 22142 07430
Computacenter Germany AG & Co. oHG
Werner-Eckert-Str. 16-18
81829 München
Germany
Tel: +49 (0) 8945 7120
Hungary
Computacenter Services Kft
Haller Gardens, Building D. 1st Floor
Soroksári út 30-34
Budapest 1095
Hungary
Tel: +36 1 777 7488
Spain
Computacenter Services (Iberia) S.L.U.
Carrer de Sancho De Avila 52-58
08018 Barcelona
Spain
Tel: +34 936 207 000
Switzerland
Computacenter AG
Riedstrasse 14
CH-8953 Dietikon
Switzerland
Tel: +41 (0) 43 322 40 80
USA
Computacenter United States, Inc.
1 University Avenue
Suite 102, Westwood
MA 02090
United States of America
Tel:+ 1 800-228-8324
Pivot Technology Solutions, Inc.
6026 The Corner Parkway, Suite 100
Norcross, GA 30092
United States of America
Tel: +1 800-228-8324
Business IT Source, Inc.
850 Asbury Drive
Buffalo Grove
IL 60089
United States of America
Tel: +1 847-793-0600
India
Computacenter India Private Limited,
4th Floor, Purva Premiere,
Residency Road,
Bangalore 560025
India
Tel: +91 95386 11122
Japan
Computacenter Japan K.K.
Cross Office Mita 601
5-29-20 Shiba
Minato-ku Tokyo
Japan
Tel: +81 3 6809 3032
Malaysia
Computacenter Services (Malaysia) Sdn Bhd
Level 9, Tower 1
Puchong Financial Corporate Centre
Jalan Puteri 1/2, Bandar Puteri
47100 Puchong
Selangor Darul Ehsan
Malaysia
Tel: +603 7724 9626
Mexico
Computacenter México S.A. de C.V.
Av. Paseo de la Reforma, No. 412-5
Col. Juárez
Delegación Cuauhtémoc
CP 06600
México City
México
Tel: +52 (55) 6844 0700
Netherlands
Computacenter B.V.
Gondel 1
1186 MJ Amstelveen
Netherlands
Tel: +31 (0) 88 435 8000
Romania
Computacenter Services S.R.L.
Stables Office
20A Onisifor Ghibu
Record Park
Cluj-Napoca, CJ 400185
Romania
South Africa
Computacenter (Pty) Ltd
Building 1
Klein D’Aria Estate
97 Jip de Jager Drive
Bellville, 7530
Cape Town
South Africa
Tel: +27 (0) 21 957 4900
212 | Computacenter plc Annual Report and Accounts 2022
Financial Statements Design and production:
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www.gather.london
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Computacenter is a leading independent technology
and services provider, trusted by large corporate
and public sector organisations. We help our
customers to Source, Transform, and Manage their IT
infrastructure to deliver digital transformation,
enabling people and their business. Computacenter
is a public company quoted on the London FTSE 250
(CCC.L) and employs over 20,000 people worldwide.
Computacenter plc
Hatfield Avenue, Hatfield, Hertfordshire AL10 9TW, United Kingdom
Tel: +44 (0) 1707 631000
www.computacenter.com
E&OE. All trademarks acknowledged.
© 2023 Computacenter.
All rights reserved.