00 Computacenter annual review 1997 Computacenter annual review 1997

Annual review 1997

Computacenter plc, Computacenter House, 93/101 Blackfriars Road, London SE1 8HL Telephone 0171 620 2222, Fax 0171 261 0510, www.computacenter.com 1 Computacenter annual review 1997

1 Introduction 2 Financial highlights Computacenter specialises in the provision 5 Chairman’s statement 6 Chief Executive’s review of distributed information technology and related 10 PRISM services 18 Group management and directors services to large corporate and public sector 20 Branch locations and international partners 22 Finance Director’s report organisations. The Group has operations in the 24 Auditors’ report on the summarised accounts UK, France and Germany. 25 Business report 28 Group profit and loss account 29 Group statement of total recognised Computacenter markets its services as PRISM. gains and losses 30 Group balance sheet These services address all stages of the 31 Company balance sheet 32 Group statement of cash flows technology life-cycle, from the Planning and Requisition of appropriate technology, through its Implementation within a company’s existing infrastructure to its subsequent Support and Management. Computacenter aims to be the preferred partner of organisations seeking to implement and support distributed IT. 2 Computacenter annual review 1997 3 Computacenter annual review 1997 Financial highlights Operating profit for the Group rose by 31.1% from £39.9 million to £52.3 million. In 1997 the Computacenter Group continued its unbroken record of growth in turnover and Fully diluted earnings per share increased from UK profit before tax. 13.1p in 1996 to 17.4p in 1997. Total Group turnover for the year increased by 28.5% from £882 million in 1996 to £1,133 million in 1997.

Group turnover (£m) Group operating profit (£m) Group profit before tax (£m) Group fully diluted earnings per share (pence)

463.0 564.1 882.5 1,133.5 8.5 13.2 39.9 52.3 7.3 12.2 34.2 47.1 1.7 4.6 13.1 17.4

1994 1995 1996 1997 1994 1995 1996 1997 1994 1995 1996 1997 1994 1995 1996 1997

The figures shown for 1995 and 1996 have been extracted from the statutory accounts of the Group for the period 2 October 1995 to 31 December 1996 and of the consolidated statutory accounts of Computacenter Ltd for the year ended 31 December 1995 in order to provide a meaningful 12 month comparison. The figures for 1994 are from the consolidated statutory accounts of Computacenter Ltd for the year ended 31 December 1994. 4 Computacenter annual review 1997 5 Computacenter annual review 1997 Chairman’s statement “Computacenter is a people business and a service business. The quality of our service depends entirely on the quality, teamwork and motivation of our staff.”

This Annual Report is the last We wrote in last year’s report that intention to float. And new schemes for Computacenter as a private our objective is to build a truly have been put in place, such as a Company. On Thursday 21 May 1998 great Company. Sharesave scheme, which are Computacenter plc was floated on the accessible to all staff. We laid emphasis on our core values London stock exchange. The offer which are to earn the loyalty of Over the last 17 years Computacenter was over 12 times over-subscribed. customers, staff and shareholders by has established an extremely strong The market’s enthusiasm for the delivering outstanding long-term value. competitive position in a market which issue reflected the Company’s is expected to continue to grow. Our continued success and positive We said that it is our strategic and staff are responsible for enabling us to growth prospects. operational objectives, not our reach this position. Computacenter is financial results, which drive our In the year to 31 December 1997, a people business and a service business. Profits are a consequence Group turnover was up over 28% to business. The quality of our service not a cause. £1.13 billion compared to 1996 and depends entirely on the quality, pre-tax profits rose almost 39% to These remain the principles on which teamwork and motivation of our staff. £47.1 million. our success is based. This is a landmark year for The founding shareholders and At the time of the flotation 17% of Computacenter. I would like to thank the management team have great the equity was held by over 700 all of our staff personally for their confidence in the future of the employees, excluding the founders. professionalism, commitment and business and have retained the vast Most of these employee shareholders hard work and I look forward to our majority of their shareholdings, selling have been with the Company at least continued success. just sufficient to enable the flotation four years and many much longer. to take place. The flotation has enabled us to provide liquidity to these loyal staff The timing of the offer reflects and also to provide a practical route management’s desire to continue to Philip Hulme, Chairman to continue to involve our staff in the realise its vision for the Company and ownership of the Company in the hold true to the principles which have future. On flotation, free shares were guided the Company’s success since issued to all employees who were it was founded in 1981. with the company on 31 March, the date of the announcement of the 6 Computacenter annual review 1997 7 Computacenter annual review 1997 Chief Executive’s review “In 1997 our largest ten accounts comprised four clearing banks, three investment banks, “In 1997 Computacenter’s customer base a leading telecommunications company, included significant relationships with a leading IT services organisation and 51 of the UK’s FTSE 100 companies.” one of the UK’s largest oil companies.”

Computacenter is the largest The product of this investment is a From our original base in the South of We remain focused on the continual A new Enhanced Warranty £1 million of orders a day and UK-owned company specialising year-on-year progressive improvement England, we now have an international investment in, and development of, maintenance service extended providing easy access for customers in providing distributed information in the quality and effectiveness of network of sales and service operations our services, infrastructure, systems standard manufacturer warranties by to information on stock availability, technology and related services our services, continual innovation with over 30 offices in the UK, France and people. During 1997, a wide providing a cost-effective next-day delivery and prices. On-Trac is now to large corporate and public in service range and delivery and and Germany. range of initiatives were taken to on-site service for new equipment. installed with over 300 customers in sector organisations. the building of economies of scale, strengthen our business and build It also allows the price for one, two the UK, France and Germany. We were delighted last year to receive all of which benefit both us and our competitive advantage. or three years’ support to be bundled Our strategic objective is to be these Computing magazine’s 1997 Award Over the year, our internal IT customers and underpin our long-term into the capital purchase price. organisations’ preferred partner when for Excellence in Technical Support, infrastructure enjoyed over 99.9% customer relationships. Services they wish to implement and support recognising our new Enhanced We introduced a new call management system availability. distributed IT. The results show in our continued Warranty service. Computacenter continued to enhance system, ‘Lynx’, at the CallCenter, our growth. Group turnover has now and develop its services and saw software support facility. This enabled Infrastructure We work with our customers to help The Company also won two doubled over the past two years. increased revenues from these the centre’s 65 employees to handle them realise the potential of the EuroChannels Innovator Awards The bulk of our equipment is Our number of employees increased activities in 1997. 135,000 calls during the year. technology whilst at the same time for Best European Customer distributed from our logistics centre from 1,744 at the end of 1995 to managing their costs of ownership. Support Services and for European Technical services were developed at Radlett, Hertfordshire. 3,245 at the end of last year. Over the Internal systems Reseller of the Year. These were around enterprise networking Over the years, we have invested in past three years, our profit before tax In 1997, Radlett handled 357,000 won against competing entries and cabling infrastructures, Over 90 of the 150 people employed in developing a wide range of services, has increased from £12.2 million to system units – an average of almost from across Europe. management of systems and our internal IT division are focused on together with systems and best £47.1 million and our after-tax 1,000 for each day of the year. networks across the enterprise, the development and implementation practice, which can be replicated earnings from £7.1 million to The Computing award reflected the SAP infrastructure installations, of new proprietary systems. 60% of systems are now despatched across our customer base. We have £31.1 million. views of end-users; the EuroChannel and Unix implementations. with all software pre-configured to also invested in our centralised awards those of the industry on a On-Trac, our customer procurement 91% of our turnover came from New services also covered specific customer requirements. systems and facilities. range of services including Help Desk and tracking software, now handles selling directly to corporate and public emerging technologies such support from our CallCenter. some 35% of our business, sector companies. The remaining as Internet/Intranet and the processing on-line an average of 9% came through our distribution Computacenter was also named network computer. business, CCD, which supplies Dealer of the Year by publisher VNU. hardware and a limited range of services to small and medium-sized computer resellers. 8 Computacenter annual review 1997 Chief Executive’s review continued 9 Computacenter annual review 1997 “We enjoy long-term trading relationships with many of our customers. Nine of the ten largest accounts in 1994 were still significant customers in 1997.”

1997 year-end employee numbers 1997 year-end employee deployment

1,453 1,744 2,359 3,245 1 Business support 15% 2 Operations 8% 1 3 Direct (CCD) 2% 4 Account 2 management 20% 3 5 Services 56% 5 4

1994 1995 1996 1997

In addition to our core direct-to- Channel assembly In June last year, we acquired ICG provides customers with a Computacenter a more attractive customer business, overall investment BITService, a computer services single interface for all national and employer and help staff motivation. In 1997 Computacenter became in stock and logistics enables our company based in Bad Homburg international IT requirements. This can one of the first companies in the UK Over a two-year period in which our reseller distribution business, CCD, to on the outskirts of Frankfurt. help reduce the cost of managing the to launch a full channel assembly staff has doubled, our retention rates pass on significant cost and service The company has since been IT functions of foreign subsidiaries programme with IBM. have improved significantly. benefits to customers. renamed Computacenter Germany. and of international roll-outs. This approach increases availability We have now added a new ICG provides Computacenter with During 1997, we opened a number Future prospects for the customer and reduces our product supply operation and additional leverage with vendors and of new facilities. These included an stockholding requirements. Similar opened offices in Dusseldorf, a significant marketing advantage. The demand for distributed IT 11,400 sq. ft. training and account terms have now been agreed with Munich and Ludwigshafen. systems and support services management centre in Bristol, a Developments in 1997 included Hewlett-Packard. continues to grow rapidly. 12,000 sq. ft. centre in Reading, Computacenter Germany employed a closer association with WM-data AB, and some 13,000 sq. ft. of office We believe that channel assembly 112 people at the end of 1997 and Scandinavia’s leading IT services We believe we have the right strategy, accommodation in Birmingham. can bring economic benefits to achieved a turnover of £7 million. company, which is now ICG’s infrastructure, services, systems and Computacenter, its suppliers and its exclusive representative in Sweden, people to continue to add value on Work continues apace on our new Both France and Germany offer customers. It also helps us achieve Finland and Denmark. behalf of our customers. 210,000 sq. ft. logistical and considerable opportunities, and superior levels of customer service. headquarters centre at Hatfield we are pleased with the way the We look forward to the future with Consequently we expect to see Employees in Hertfordshire in the UK. businesses are developing. considerable confidence. substantial further growth in this area. The ability to attract and retain skilled The main logistics building will offer International Computer Group (ICG) staff is especially important in an considerably greater storage capacity, France and Germany industry renowned for skills shortages much higher levels of automation Computacenter is a co-founder of the Computacenter France’s turnover and staff turnover. and will enable us to meet the International Computer Group – an grew 48% to FF 920 million and the rapidly growing demand for channel international joint venture agreement A key management focus is to earn company reported its first profit. assembly and individually configured between leading IT service companies and retain the loyalty of our staff. Mike Norris, Chief Executive network systems. France is Europe’s third largest IT in 42 countries. We do this through our training, market, and Computacenter is now career development and benefits the country’s fourth largest reseller, programmes. By continuing to build employing some 400 people. our market leadership we also make 10 Computacenter annual review 1997 11 Computacenter annual review 1997 PRISM describes Computacenter’s range of Planning services. They are modular and flexible, so that Working with customers to plan and customers can choose one, several or all of integrate their distributed IT systems. the services and tailor them to their needs.

Over the following pages Architecture design Project planning Technology management we give an overview of each We help design distributed IT Computacenter’s project managers Decentralised purchasing can make of the five elements of PRISM. infrastructures, from initial definition help reduce the risk of implementing it difficult for many IT managers to • Planning of the technical architecture and complex IT solutions. Key to their know exactly what equipment and • Requisition standards through to detailed design success in this area is our project software are being used in their • Implementation and testing of the chosen solution. management methodology, PRIDE organisations, what software is • Support The technology may span desktop, (PRojects In a Dynamic Environment). running and whether the software • Management server and network operating is legally licensed. systems, local and wide area Specialist consultancy Computacenter helps customers networks, cabling systems, electronic We have in-depth, specialist expertise maintain control through hardware and mail and groupware systems and in enterprise networking and cabling software audits and automated tools Internet/Intranet environments. infrastructures, management of to track and manage distributed IT systems and networks across the assets. We also offer security audits Multi-platform integration enterprise, SAP infrastructure and security products and processes Once a technology has been selected, installations and Unix implementations, to protect against viruses and prevent it is likely to have to be integrated as well as emerging technologies the theft of both data and equipment. with other new and existing systems such as Internet/Intranet and the involving a range of different network computer. Computacenter’s computing platforms and hardware largest group of specialist consultants and software from different vendors. is in the field of Microsoft technologies. 12 Computacenter annual review 1997 13 Computacenter annual review 1997 Requisition Implementation Fast and efficient provision of Configuring, installing and integrating best of breed technology. distributed IT.

Product supply and delivery Channel assembly Portfolio management Configuration and installation Systems engineering Project management Companies typically demand rapid Computacenter is one of the first Individual customers usually purchase The Radlett configuration Technically demanding implementations The scale of projects has tended to delivery and high availability of companies in the UK to embark on a distributed IT products which originate centre has been equipped with such as servers, network infrastructure increase. Computacenter is often standard products. Computacenter full channel assembly programme from a wide range of different Computacenter’s Automatic and operating software, e-mail involved in projects involving hundreds holds on average over £100 million with IBM. Customers specify vendors. Computacenter can manage Configuration Engineer (ACE) system, systems, groupware or server or thousands of individual PCs, worth of inventory. their exact requirements and this complexity on behalf of its which enables customers’ unique migrations require high levels of sometimes to be installed over a Computacenter builds their machines customers, including portfolio software configurations to be systems engineering skills. wide geographic area, sometimes We maintain some 28,000 products in to order. This approach increases selection, negotiation of prices downloaded on to the customers’ in complex environments, such as our current range from over 600 Computacenter employs over availability for the customer and and terms, product acquisition PCs at the centre. There is capacity dealing rooms. Often the timescales different suppliers. The main 200 trained and vendor-accredited reduces stockholding requirements and invoice consolidation. for up to 1,200 systems to be worked are challenging. categories of products sold are customer engineers who are able for Computacenter. A similar on at any one time. It is also equipped system units (portables, desktops to carry out installation and systems In 1997, Computacenter’s project programme has been agreed to pre-configure and test complete and servers), printers, networking engineering work throughout the UK. managers directed 170 technical with Hewlett Packard. installations (for example, networks equipment, peripherals and software. and logistical projects on behalf of PCs, file servers, peripherals and Many of the engineers are assigned of customers. High availability of product must Electronic commerce software) prior to delivery at the to customers’ sites on a longer-term be married with fast and accurate customer’s site. basis. Computacenter uses an electronic delivery and invoicing. For stock items procurement and tracking system, that do not require configuration, ‘On-Trac’, which enables customers customers can typically expect to access Computacenter’s computer delivery in less than 24 hours from the network from their own PCs. time of the original order. We typically Customers can look up prices, deliver over 12,000 items a day to our obtain detailed product information, UK customers. prepare their own specifications, check product availability, place orders, track their orders from initial order to delivery, check invoice status and receive a variety of management reports. 14 Computacenter annual review 1997 15 Computacenter annual review 1997 Support Management Complementing our customers’ internal IT Delivering on-site services to over support operations. 130,000 desktop users.

Computacenter employs over of remote diagnostics, rapid despatch IT training Some organisations choose to flexible, with the customer deciding the PRIDE project management 360 staff delivering Support services of parts and on-site repairs by out-source the whole of their IT the degree of out-tasking, including methodology. By spreading the Training reduces support costs and including hardware maintenance, specially trained engineers, many of function to a third party. In these taking on the customer’s existing cost of these developments over improves the return on IT investment. telephone support and training, an whom are based permanently on cases, Computacenter is able to work personnel, if required. its substantial contract base, In 1997, Computacenter trained 85% increase since the end of 1995. customers’ sites. in partnership with other out-sourcing Computacenter is frequently able over 40,000 delegates in its 12 UK The managed services operation can companies, such as CSC, IBM and to provide more cost-effective In early 1996, we opened our A significant proportion of the training centres. Bespoke courses are turn Computacenter, its staff and EDS, to provide the distributed IT solutions than are available to the new CallCenter in Milton Keynes, cost of maintenance is covered frequently developed for customers as resources, into a virtual extension element of a total out-sourcing customer in-house. Computacenter’s which now employs over 60 by manufacturers’ warranties. part of large scale roll-out or system of a company’s IT department. contract. expertise in this area helps customers technical specialists. Computacenter has invested in migration projects. The range of available managed both to control their IT costs and systems to capture these credits However, many organisations do not services includes all the elements improve service levels. Hardware maintenance services efficiently. wish to out-source their entire IT of PRISM described above. function. They prefer to retain overall As many of Computacenter’s systems Computacenter has invested in Telephone support responsibility for IT management and are used for business-critical sophisticated tools and methodologies strategy and use third party partners applications, customers need a fast Computacenter’s CallCenter provides and employs a team of personnel to ‘out-task’ responsibility for certain and effective hardware maintenance 24 hour support and last year handled to ensure that expertise is shared support functions. Computacenter has service. over 135,000 calls. The CallCenter between the different managed established a range of managed provides support on standard software services sites. New managed services Our standard maintenance offering is services in response to this growing applications and operating systems as contracts are implemented using a “Next Day” service. We also offer requirement. Our approach is very well as customer specific applications. a range of enhanced maintenance Sophisticated fault diagnosis and services. For example, “Enhanced remote management tools are used Server Support” makes extensive use to allow support specialists to update customers’ systems remotely. 16 Computacenter annual review 1997 17 Computacenter annual review 1997 Making a difference We asked some of our customers to describe the benefits of a partnership with Computacenter.

We were asked to provide a We were asked to supply training for We were asked to support the We were asked to provide and We were asked to develop and We were asked to implement a managed maintenance and support 320 staff at nine UK locations, in PC integration of three existing IT support a desktop environment implement an e-mail environment for common operating environment to service for PCs, associated hardware familiarity and Microsoft applications, infrastructures and introduction of a for the UK operations of this leading B&Q’s head office and retail estate. support the worldwide activities of and applications. to support the migration to a distributed computing environment. international insurance company. BP Exploration. “We got the results we wanted. common operating environment. “Managing a fixed network cost “What stood out about Computacenter “A large number of PC equipment and It has achieved what we set out “We were not interested in the nitty effectively is difficult at the best “Employees who had never before was that they took a long term view software manufacturers seem to to achieve. It was delivered inside gritty of day-to-day problems. of times. When you have so many been comfortable with IT are now while helping us with short term have a supermarket mentality; they time and under budget. I am happy From the outset we knew what mobile units as well it can be one achieving substantial productivity problems. We were able to draw will sell you the kit, and lots of it, but that Computacenter is on the case we wanted delivered and left the big headache. That’s why it is nice to gains, and those who were already on their experience in areas like getting any really deep support is for the next phases, because not ‘How’ to Computacenter, who took have a company like Computacenter comfortable have started to expand networking and platform design extremely difficult. We value the only do they help us on this project, on the pivotal role of smoothing the to take those problems away.” the ways they use their systems where they not only gave us tactical fact that Computacenter has its they use their intelligence from path with IBM, whose hardware we with very positive effects.” assistance, but produced research own dedicated product specialists other work they are doing for us to were implementing, and making sure into long term trends.” who bring specific knowledge and make sure that we all have a broad it was delivered on time. In the event expertise to bear on issues and often perspective.” it was not only completed inside provide us with better information time but inside budget as well and than the original manufacturers!” has given us a platform that allows us to deal with future changes in a co-ordinated fashion, while maintaining a top-quality standard environment.” 18 Computacenter annual review 1997 19 Computacenter annual review 1997 Group management and directors

1 2 3 4 5 6 7 8 9 10 11 12

Executive Directors Senior Management John Joslin, General Manager, Non-Executive Directors Services and Operations (Aged 33) Philip Hulme, Chairman Mike Norris, Chief Executive Tony Conophy, Finance Director Computacenter’s operating Joined Computacenter in 1987. Peter Ogden (Aged 49) (Aged 36) (Aged 40) committee is chaired by the (Aged 50) Philip Hulme graduated from Imperial Mike Norris graduated with a degree Tony Conophy has been a member Chief Executive, meets regularly Chris New, General Manager, Peter Ogden founded Computacenter College London with a first class in Computer Science and Mathematics of the Institute of Chartered and reports to the Board. Business Development (Aged 39) with Philip Hulme in 1981. He is engineering degree. In 1971 he won from East Anglia University in 1983. Management Accountants since 1982. The members are Mike Norris, Joined Computacenter in 1987. Chairman of Computasoft, a director a Harkness Fellowship and entered He joined Computacenter in 1984 He qualified with Semperit (Ireland) Philip Hulme, Tony Conophy of Omnia Limited, and a non-executive the MBA programme at Harvard as a salesman in the City office. Ltd and then worked for five years at and the following members Alan Pottinger, Company Secretary director of the Abbey National and Business School. On graduating he In 1986 he was Computacenter’s top Cape Industries PLC group. He joined of Computacenter’s senior and Head of Human Resources Anglo & Overseas Trust. joined the Boston Consulting Group, national account manager. Following Computacenter in 1987 as Financial management: (Aged 40) for whom he worked in the United appointments as Regional Manager Controller, rising in 1991 to General Joined Computacenter in 1986. Adrian Beecroft States, South Africa and the UK, for London operations in 1988 and Manager of Finance. In 1996 he was Richard Archer, General Manager, (Aged 51) rising to Vice President and Director General Manager of the Systems appointed Finance and Commercial London (Aged 38) Craig Routledge, General Manager, Adrian Beecroft has been Chairman of in 1979. He was appointed to head Division in 1992 with full national Director of Computacenter (UK) Joined Computacenter in 1991. Managed Services (Aged 40) Apax Partners & Co. Ventures Limited the London office in 1980. In 1981 sales and marketing responsibilities, Limited with responsibility for all Joined Computacenter in 1990. since 1990 and has served on the he founded Computacenter with he became Chief Executive in financial, purchasing and vendor Andy Chudzik, General Manager, boards of a number of private and Peter Ogden, and has worked for December 1994 with responsibility for relations activities. South of England (Aged 40) Andy Stafford, General Manager, public companies. the Company on a full-time basis all day-to-day activities and reporting Joined Computacenter in 1988. IT Services (Aged 34) since then. channels across Computacenter. Joined Computacenter in 1998. Rod Richards Mike Davies, General Manager, (Aged 42) Technical Services (Aged 37) Rod Richards has been a director Joined Computacenter in 1992. of Foreign and Colonial Ventures since 1988, is a non- executive Martin Hellawell, General Manager, director of PSD Group PLC and has Corporate Development served on the boards of a number and Marketing (Aged 33) of private companies. Joined ICG in 1990 and Computacenter in 1994.

From left to right: 1 Philip Hulme 2 Mike Norris 3 Tony Conophy 4 Andy Chudzik 5 Martin Hellawell 6 Richard Archer 7 Andy Stafford 8 Mike Davies 9 John Joslin 10 Chris New 11 Alan Pottinger 12 Craig Routledge 20 Computacenter annual review 1997 21 Computacenter annual review 1997 Branch locations and international partners

Computacenter branches ICG Members and Associates

For general enquiries contact Unit 38, Lambourne Crescent Computacenter House Training ICG Worldwide Americas Computacenter on 0800 617000 Cardiff Business Park, Llanishen 93-101 Blackfriars Road Argentina Inacom Argentina Computacenter provides training or visit our web site at CARDIFF CF1 5GG LONDON SE1 8HL EMEA Brazil Inacom do Brasil services through branch offices and at www.computacenter.com Telephone 01222 761331 Telephone 0171 620 2222 Austria Computer Systemvertrieb Canada Inacom Information the following training-only locations: Fax 01222 747834 Fax 0171 261 0510 Belgium Systemat & Datarelay Systems Ltd UK 4th Floor, Broad Street House Czech Republic Csc Computer Columbia Inacom de Columbia Unit 2, Oak Court, Betts Way Enterprise House 55 Old Broad Street Services Ecuador Inacom de Ecuador The Glover Pavilion CRAWLEY, West Sussex RH10 2GB Waterfront 2000, Waterfront Quays LONDON EC2M 1RX Denmark WM-data BFC Mexico Inacom de Mexico Aberdeen Science & Technology Park Telephone 01293 560750 Salford Quays Telephone 0171 650 5700 Finland WM-data Faci Peru Profesional Consulters Balgownie Road, Bridge of Don Fax 01293 562251 MANCHESTER M5 2XW Fax 0171 650 5750 France Computacenter France USA Inacom ABERDEEN AB22 8GH Telephone 0161 848 8088 Keith House Germany Computacenter Germany Venezuela Inacom de Venezuela Telephone 01224 825000 Fax 0161 848 9431 Theatre Square, SWINDON 2 Redheughs Rigg, South Gyle Greece ABC Group Fax 01224 828191 Wiltshire SN1 1QN EDINBURGH EH12 9DQ 1 Thames Valley Park Hungary Duna Elektronika Kft Asia Pacific Telephone 01793 423000 Aqueous House Telephone 0131 317 7166 READING, Berkshire RG6 1PT Ireland Cara Group Australia Business Computers Fax 01793 421277 Rocky Lane, Waterlinks Fax 0131 317 7338 Telephone 0118 935 6000 Italy TC Sistema of Australia (BCA) BIRMINGHAM B6 5RQ Fax 0118 926 1584 Luxembourg Systemat & Datarelay China SECOM 4th Floor France Telephone 0121 359 4455 Netherlands RAET Systems Hong Kong System-Pro Stock Exchange House Trevelyan House Fax 0121 359 5649 58 Rue de la Belle Etoile & Services India CMS Computers 7 Nelson Mandela Place 7 Church Road Z.I. de Paris Nord II Norway WM-data Cimtec Japan JBCC 1 Westpoint Court GLASGOW G2 1QY WELWYN GARDEN CITY B.P. 50387, 95943 Roissy CDG France Portugal Prológica Malaysia Oriental Data Systems Great Park Road, Almondsbury Telephone 0141 226 8222 Hertfordshire AL8 6NT Telephone 00 33 1 48 17 41 00 Russia R-Style Singapore JOS Technology BRISTOL BS12 4PS Fax 0141 226 8223 Telephone 01707 373707 Fax 00 33 1 48 63 04 72 South Africa Tac Technologies Telephone 01454 614444 Fax 01707 373541 Unit 9, Pavillion Business Park Spain Logic Control Associate members in Chile, Cyprus, Fax 01454 620803 Royds Hall Road Germany Sweden WM-data Owell Egypt, Iceland, Indonesia, Israel, LEEDS LS12 6AJ Switzerland ALSO Korea, Latvia, New Zealand, Pakistan, Rhein/Main GmbH, Siemenstrasse 21 Telephone 0113 279 8686 Turkey Tepum Philippines, Poland, Puerto Rico, 61352 Bad Homburg, Germany Fax 0113 231 1594 United Arab Emirates Romania, Slovakia, Taiwan, Thailand, Telephone 00 49 6172 6740 Al Bawardi Computers Vietnam Fax 00 49 6172 674 100 United Kingdom Computacenter UK 22 Computacenter annual review 1997 23 Computacenter annual review 1997 Finance Director’s report “The culture of the Group is one of empowerment and incentivisation.”

Turnover Interest Staff costs In June 1997 the Group acquired Capital expenditure in 1997 included Financial management 75.8% of the ordinary share capital of £9.9 million in respect of freehold The Group has an unbroken record of Net interest charges for the year were In 1997 increased recruitment to the The culture of the Group is one of Bitservice GmbH, a small German land and construction costs in consistent organic growth in turnover £5.2 million compared to £5.7 million Group’s service divisions reduced empowerment and incentivisation. company, immediately renaming it connection with the new assembly and in UK profit before tax. During on a comparable annual basis. sales per employee from £460,000 The Group’s customer account Computacenter Beteiligung GmbH. and configuration plant at Hatfield. 1997 the Group achieved another year This represents an interest cover per person in 1996 to £399,000 per management model, which has been of high growth, with total Group of 10 times (1996: 7 times on person in 1997. The increased In addition, the Group has agreed to The Group operates complex working refined over many years, ensures that turnover for the year increasing by a comparable annual basis). services mix is also evident from the acquire the remaining 24.2% under an capital mechanisms, including each account manager’s goals are 28.5% to £1,133 million compared to staff costs trend which has increased earn-out contract which is contingent incentives to staff, to encourage congruent with the overall business. £882 million on a comparable annual Taxation from 7.6% of turnover in 1996 to on the level of turnover in 1999 and the prompt collection of debts and A large internal IT development team, basis in 1996*. Turnover generated 9.2% of turnover in 1997. We expect cumulative earnings before interest and management of inventory. which is expensed through the profit The Group’s effective tax rate for in the UK accounted for 91% of this trend to continue in the future. tax achieved between 1 January 1997 and loss account as staff costs, the year is 33.9% compared with the Group total, with the remainder and 31 December 1999. Assets employed creates the complex systems 34.5% in 1996 on a comparable generated from France and Germany. Overseas operations that measure most attributes of annual basis. The improvement in the At 31 December 1997 Group net Cash flow the Group’s, and often the individual’s, rate was caused principally by the During the year the Group’s French assets employed (calculated as net Operating profit performance. The cumulative effect reduction in the statutory tax rate in business achieved particularly pleasing The Group has continued to generate assets plus long term debt) had of these investments is a source of Operating profit for the Group rose the UK to 31% and the use of brought growth in turnover and made a significant cash from operations as set increased to £74.0 million compared competitive advantage. by 31.1% to £52.3 million from forward tax losses in France. positive contribution to Group profits out in the Group cash flow statement. to £53.8 million at 31 December 1996. £39.9 million on a comparable annual for the first time. Computacenter Overall the working capital of the This was principally due to retained basis. The increase in the operating Dividends France currently employs approximately Group increased by £18.1 million, earnings for the year of £25.7 million, margin achieved, from 4.5% in 1996 400 people and achieved a turnover producing operational cash flows of offset by the write-off of goodwill on A dividend was paid during the year to 4.6% in 1997, was primarily due to of FF 920 million during the year. £42.6 million. After interest, tax the acquisition of Computacenter equal to 3.2p per ordinary share the conversion of an operating loss in This represents annual growth of payments, capital expenditure, Germany of £2.6 million. Pre-tax Tony Conophy, Finance Director (4.0p gross after adding the tax credit France in 1996 to a profit in 1997. 48% in French Franc terms. acquisitions and dividends the Group return on net assets employed associated with the dividend). It is the had a net cash outflow of £1.9 million. for the year was 82%. Group’s policy that dividends will be During the year £1.9 million of debt proposed by the Directors if the was retired. Group’s operating results, financial condition, investment strategy and

other factors permit. *The comparative figures used in the Chairman’s statement, the Chief Executive’s review and the Finance Director’s report have been extracted from the statutory accounts of the Group for the period 2 October 1995 to 31 December 1996 in order to provide a meaningful 12 month comparison. 24 Computacenter annual review 1997 25 Computacenter annual review 1997 Auditors’ report on the Business report summarised accounts

We have examined the summarised Important notes Directors The Directors present their business UK business Computacenter’s extensive range accounts of Computacenter Services report and the summarised accounts Computacenter Limited has again of services, marketed as “PRISM” The auditors’ report on the statutory Mr P W Hulme (Chairman) Group plc set out on pages 28 to 32. of the Group for the year ended enjoyed a year of exceptional growth (Procurement, Requisition, accounts for the year ended Mr P J Ogden In our opinion the summarised 31 December 1997. in turnover and profitability. Turnover Implementation, Support and 31 December 1997 was unqualified Mr P A B Beecroft accounts have been properly increased by 21.9% to £1,033.8 Management), together with its and did not contain a statement Mr R L Richards extracted from the Group’s statutory Principal activities million from £848.1 million in 1996 continued investment in people, under sections 237(2) or 237(3) Mr M J Norris accounts for the year ended (15 months). processes and systems, ensured that of the Companies Act 1985. (appointed 30 March 1998) The Group’s principal activities are 31 December 1997. it was ideally placed to take advantage Mr F A Conophy the design, project management, The Company continued to focus on The financial information contained of these trends. Ernst & Young (appointed 30 March 1998) implementation and support of the provision of distributed IT systems in this section includes the audited Chartered Accountants integrated information technology and related services to the corporate The increase in profitability was largely consolidated financial statements of Registered Auditor Secretary (IT) systems. and public sector marketplace. in line with the increase in sales. Computacenter Services Group plc. Reading Increased sales resulted from the The growth of the Company’s service However, it does not contain Mr A J Pottinger FCIS 30 March 1998 Review of the business acquisition of new customers and also business made a major contribution sufficient information to convey a the provision of a wider range of to profitability. full understanding of the results Auditors The Group has again enjoyed a year products and services to existing and state of affairs of the Group. of exceptional growth in turnover Over the year, the Company created Ernst & Young customers. The Company’s growth For further information the full Report and profitability. Turnover for the over 850 new jobs, mostly in its Apex Plaza rate was substantially ahead of the and Accounts should be consulted. Group increased by 21.7% to service divisions. Reading RG1 1YE market and resulted in increased £1,133.5 million from £931.2 million market share. for the 15 month period ended Overseas operations Registered Office 31 December 1996. Operating profit A number of trends have driven The Group’s French business achieved Computacenter House rose by 29.7% to £52.3 million from the growth in the market including particularly pleasing growth in 93-101 Blackfriars Road £40.3 million for the 15 month period continuing reductions in hardware turnover and moved into profit after London SE1 8HW ended 31 December 1996. costs, which help customers to cost interest. The Group expanded its justify additional investments in European operations, acquiring Registered Number IT, and the growing availability of Frankfurt based BitService, a German enterprise software applications 3110569 for client server technology. 26 Computacenter annual review 1997 Business report continued 27 Computacenter annual review 1997

PC services company now trading as Results and dividends Employee share schemes Equal opportunities Statement of directors’ responsibilities The Directors confirm that the full Computacenter Germany, in order to in respect of the accounts statutory accounts comply with the The Group’s activities resulted in The Group operates executive share The Group is committed to a policy develop its German operations and above requirements. a profit before tax of £47,099,000 option schemes for the benefit of of treating all its employees and job As noted on page 24, the summarised provide a service to customers with (1996 15 months: £34,012,000). employees. As at 31 December applicants equally. No employee or accounts presented on pages 28 to 32 The Directors are responsible for German support requirements. The Group profit for the year available 1997, options under the schemes potential employee receives less have been extracted from the full keeping proper accounting records The Directors would like to thank to shareholders amounted to to purchase shares of the Company favourable treatment or consideration statutory accounts of the Company which disclose with reasonable all staff for their contribution to the £31,087,000 (1996 15 months: have been granted to certain on grounds of race, colour, religion, and do not give all of the information accuracy at any time the financial Company’s continuing success. £22,466,000). The Directors have employees in respect of 25,021,824 nationality, ethnic origin, sex, contained in those accounts. position of the Group and to enable We look forward to building upon paid a dividend during the year of (1996: 24,547,388) ordinary shares disability or marital status or will them to ensure that the accounts Company law requires the Directors the Group’s unrivalled position £4,983,000 (1996 15 months: nil). of 5p each. 1,298,064 ordinary share be disadvantaged by any conditions comply with the Companies Act 1985. to prepare accounts for each financial within the industry, for the benefit options were exercised during of employment or the Group’s They are also responsible for period which give a true and fair view of shareholders, customers and Directors the year. requirements that cannot be justified safeguarding the assets of the Group of the state of affairs of the Company staff, in 1998 and beyond. as necessary on operational grounds. and hence for taking reasonable steps The Directors who served during the and of the Group and of the profit or Employee involvement To this end the Group has an Equal for the prevention and detection of year ended 31 December 1997 and loss of the Group for that period. In Future developments Opportunities Policy. This demonstrates fraud and other irregularities. those appointed subsequent to the The Group is committed to involve all preparing those accounts, the the Group’s commitment to make full The Group will continue to invest in year end are listed on page 24. employees in the performance and Directors are required to: use of the talents and resources of all Auditors people, infrastructure and information development of the Group. Employees its employees and to provide a healthy • select suitable accounting policies systems to improve the quality of Creditors payment policy are encouraged to discuss with Ernst & Young have expressed their environment which will encourage and then apply them consistently; service provided to its corporate and management matters of interest to willingness to continue in office as It is the policy of the Company that good and productive working public sector clients. Achieving total employees and subjects affecting • make judgements and estimates auditors and a resolution proposing each of the businesses should agree relationships within the organisation. customer satisfaction through day-to-day operations of the Group. that are reasonable and prudent; their reappointment will be submitted appropriate terms and conditions for operational excellence remains at the Annual General Meeting. its transactions with suppliers (ranging Charitable donations • state whether applicable accounting the corporate goal of the Group. from standard written terms to standards have been followed, subject The Group has made charitable By order of the board individually negotiated contracts) and to any material departures disclosed donations during the year amounting that payment should be in accordance and explained in the accounts; and to £98,809 (1996 15 months: A J Pottinger, Secretary with those terms and conditions, £17,618). • prepare the accounts on the going 30 March 1998 provided that the supplier has also concern basis unless it is inappropriate complied with them. to presume that the Group will continue in business. 28 Computacenter annual review 1997 29 Computacenter annual review 1997 Group profit and loss account Group statement of total recognised For the year ended 31 December 1997 gains and losses For the year ended 31 December 1997

15 months 15 months 1997 1996 1997 1996 £’000 £’000 £’000 £’000 Turnover 1,133,523 931,209 Profit attributable to members of the parent company for the financial year 31,087 22,466 Operating costs (1,081,041) (891,105) Exchange difference on retranslation of net assets of associated and subsidiary undertakings (339) 264 (Loss)/profit from interests in associated undertakings (176) 222 Total recognised gains relating to the year 30,748 22,730 Operating profit 52,306 40,326 Other income 1,429 1,554 Interest payable and similar charges (6,636) (7,868) Profit on ordinary activities before taxation 47,099 34,012 Taxation (15,990) (11,599) Profit on ordinary activities after taxation 31,109 22,413 Minority interests – equity (22) 53 Profit attributable to members of the parent company 31,087 22,466 Dividends – ordinary dividends on equity shares (4,983) – Retained profit for the year 26,104 22,466 30 Computacenter annual review 1997 31 Computacenter annual review 1997 Group balance sheet Company balance sheet At 31 December 1997 At 31 December 1997

1997 1996 1997 1996 £’000 £’000 £’000 £’000 Fixed assets Fixed assets Tangible assets 30,589 18,019 Tangible assets 9,858 – Investments 3,009 3,326 Investments 123,260 116,428 33,598 21,345 133,118 116,428 Current assets Current assets Stocks 108,245 83,316 Debtors 185 – Debtors: gross 186,270 161,269 Cash at bank and in hand 248 19 Less non returnable proceeds (20,549) (15,070) 433 19 165,721 146,199 Creditors: amounts falling due within one year (21,536) (4,683) Cash at bank and in hand 13,829 17,867 Net current liabilities (21,103) (4,664) 287,795 247,382 Total assets less current liabilities 112,015 111,764 Creditors: amount falling due within one year (246,602) (213,545) Creditors: amounts falling due after more than one year (47,446) (48,732) Net current assets 41,193 33,837 Total assets less liabilities 64,569 63,032 Total assets less current liabilities 74,791 55,182 Capital and reserves Creditors: amounts falling due after more than one year (43,448) (46,995) Called up share capital 7,876 7,811 Provision for liabilities and charges – (199) Share premium account 537 385 Total assets less liabilities 31,343 7,988 Merger reserve 55,990 55,990 Capital and reserves Profit and loss account 166 (1,154) Called up share capital 7,876 7,811 Shareholders’ funds – equity 64,569 63,032 Share premium account 537 385 Approved by the board on 30 March 1998 Profit and loss account 22,865 (256) Shareholders’ funds – equity 31,278 7,940 P W Hulme, Chairman Minority interests – equity 65 48 P J Ogden, Director 31,343 7,988

Approved by the board on 30 March 1998

P W Hulme, Chairman P J Ogden, Director 32 Computacenter annual review 1997 Group statement of cash flows For the year ended 31 December 1997

15 months 1997 1996 £’000 £’000 Cash inflow from operating activities 42,625 46,294 Returns on investments and servicing of finance (4,748) (6,160) Taxation Corporation tax paid (11,294) (5,682) Capital expenditure and financial investment (20,787) (10,646) Acquisitions and disposals (2,756) (46,672) Equity dividends paid (4,983) – Cash outflow before financing (1,943) (22,866) Financing Issue of shares 217 474 (Decrease)/increase in debt (2,312) 40,259 (Decrease)/increase in cash in the year (4,038) 17,867

Reconciliation of net cash flow to movement in net debt £’000 Net debt at 2 October 1995 _ Increase in cash in the period 17,867 Cash inflow from increase in debt and lease financing (40,259) Change in net debt resulting from cash flows (22,392) Loans and finance leases acquired with subsidiary (8,313) Non cash changes in debt (44) Net debt at 31 December 1996 (30,749) Decrease in cash in the year (4,038) Cash outflow from repayment of debt and lease finance 2,312 Non cash changes in debt (214) Net debt at 31 December 1997 (32,689)

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