datatec group audited results for the year ended 28 february 2007

DATATEC GROUPAUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2007

DATATEC GROUP Highlights - Business Update

• Completion of two significant acquisitions post year-end

• Improving mix of businesses

• Continued margin expansion

• Growing geographic presence

• Strong emerging markets contribution

• Successful first year of London dual listing

DATATEC GROUP Financial Performance Summary

• 5th consecutive year of improving key financial ratios

• Continuing strong revenue growth up 17%

• Earnings per share up 51% to US$ 0.40c

• Operating profit up strongly by 45% to over $100 million

• Year-end net cash of $99 million

• Change to net revenue accounting on 3rd party maintenance sales

DATATEC GROUP Total Revenue ($ millions)

Revenue grew by 17% (9% organic)

2,1452,386

510721

61

60

FY2006 restated FY2007

Consulting(Analysys Mason)

ICT Solutions & Services(Logicalis & African Legend Indigo)

Distribution(Westcon, Westcon SA & Online)

3,168

2,715

DATATEC GROUPRevenue % by Geography

North America48%

South America2%

Europe38%

Asia7%

Africa & Middle East

5%

North America remains largest region

DATATEC GROUP Gross Profit ($ millions)

205231

111

162

22

22

FY2006 FY2007

Consulting(Analysys Mason)

ICT Solutions & Services(Logicalis & African Legend Indigo)

Distribution(Westcon, Westcon SA, Online)

338

415

Gross profit grew by 23%

DATATEC GROUP EBITDA ($ millions)

85

119

0

20

40

60

80

100

120

140

FY 2006 FY 2007

EBITDA grew by 40%

DATATEC GROUP Total Headline Earnings Per Share (US cents)

26.9

40.8

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

45.00

FY 2006 FY 2007

Headline Earnings grew by 52%

DATATEC GROUP Cash Generation ($ millions)

• Primary uses of cash:

– working capital investments funding growth

– acquisitions

129

99

0

20

40

60

80

100

120

140

160

180

FY 2006 FY 2007

Net Cash ($ millions)

Opening short term net cash 172

EBITDA 119Working capital (102)Taxation paid (14)Net finance costs (10)Non cash items 11Investing activities (60)Financing activities 31Cash distribution (6)Net movement in cash (31)

Closing short term net cash 141Long term loan -42

Closing net cash 99

DATATEC GROUP Divisional Segmental Analysis

Revenue EBITDAGross Profit

Westcon

AMG

Africa / MiddleEast

4%2%22%

72%

Logicalis

Westcon

Logicalis

AMG

Africa /MiddleEast5%

52%

6%

37%

Westcon

AMG

Africa / MiddleEast4%

5%23%

68%

Logicalis

DATATEC GROUP Revenue Restated ($’000)

($’000) Feb 2006 Feb 2007

Revenue as previously recorded 2,975,635 3,492,917

Total Effect of Restatement (260,884) (325,145)

- Westcon (220,465) (252,142)

- Logicalis (40,419) (73,003)

Revenue as currently recorded 2,714,751 3,167,772

• Change in accounting for revenue recognition on 3rd party vendor maintenance contracts (announced 3 May 2007)

WESTCON GROUP

WESTCON GROUP Highlights

• Revenues increased by $209 million to $2.3 billion. Increases in all geographic regions

• Gross margins improve to 9.5%

• EBITDA increases 24%. Significant growth in Europe and Asia Pacific

• Purchased distribution arm of Ronco Electronics (Americas). Acquisition contributes $50 million in revenue FY 2007

• European process and IT enhancements increase transaction efficiency and simplify pricing in a multi-currency environment

• Opened offices in Dubai, Malaysia and New Zealand

• NOXS and Crane acquisitions create leadership position in Security & Convergence and improve European product mix

WESTCON GROUP Financial Performance Summary

($ ‘000s) Feb 2006 (restated) Feb 2007 Growth

Sales 2,062,934 2,271,557 10%

Gross Margin 194,728 216,192 11%

Gross Margin % 9.4% 9.5%

Operating Costs 128,093 133,521 4%

Operating Cost Margin % 6.2% 5.9%

EBITDA 66,635 82,671 24%

EBITDA % 3.2% 3.6%

Operating Profit 56,861 72,504 28%

As a % of Revenue 2.8% 3.2%

Net Interest 5,581 9,277

Pre-Tax Income 51,280 63,227 24%

WESTCON GROUP Revenue % by Geography

Europe

Americas50%

40%

Asia Pac

10%

Consistent Geographic results

FY 2007

Europe40%

Americas52%

Asia Pac

8%

FY 2006 Restated

WESTCON GROUP Revenue Product Vendor Mix %

Cisco 60%

13%

14%

4%

9%

NortelOther

Security

Avaya

OtherSecurity

Avaya

Nortel

Cisco 61%

11%14%

4%

10%

FY 2006 Restated FY 2007

Cisco remains dominant vendor

WESTCON GROUP Gross Margin %

10.6

7.9

9.3 9.4

10.2

8.6

9.79.5

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Americas Europe Asia Pacific Total

FY2006

FY2007

Note: 2006 Restated

WESTCON GROUP EBITDA ($ millions)

Note: * Central costs include infrastructure, systems and other non-operating group costs

69

25

8

83

67

6-135

-20

70

-30

-20

-10

0

10

20

30

40

50

60

70

80

90

Americas Europe Asia Pac Central Costs* Total

FY2006

FY2007

WESTCON GROUP Consolidated Balance Sheet – Working Capital – US GAAP

($ millions) Feb 2006 Feb 2007

Accounts Receivable $321 $385

DSO (days) 56 61

Inventory $189 $232

Inventory Turns 10.0x 8.9x

Accounts Payable $333 $387

DPO (days) 64 68

Current Ratio 1.6 1.6

Note: Ratios based on trailing twelve month averages Net revenue accounting for vendor maintenance contracts means that absolute numbers remain

the same but ratios deteriorate compared to previous gross accounting method

WESTCON GROUP Consolidated Balance Sheet – Capitalisation – US GAAP

* Includes inter-company loan payable to Datatec which is eliminated in consolidation

($ millions) Feb 2006 Feb 2007

Cash $166 $129

Working Capital Lines 67 61

Notes payable 40 40

Net Cash * 22 0

Equity 284 325

Debt to Capitalization 0.33 0.28

Liabilities to TNW 1.83 1.87

WESTCON GROUP Net Cash / Debt Trend

-$250,000,000

-$200,000,000

-$150,000,000

-$100,000,000

-$50,000,000

$0

$50,000,000

Mar-

01

Jul-01

Nov-0

1

Mar-

02

Jul-02

Nov-0

2

Mar-

03

Jul-03

Nov-0

3

Mar-

04

Jul-04

Nov-0

4

Mar-

05

Jul-05

Nov-0

5

Mar-

06

Jul-06

Nov-0

6

($139,544,122) ($59,842,704) ($30,701,555) ($76,872,694) ($32,122,321) ($55,141,499)

WESTCON GROUP Headcount by Region

Region Feb 2006 Feb 2007

Americas 451 483

Europe 454 444

Asia-Pacific 141 187

Total 1,046 1,114

WESTCON GROUP Future Outlook

• Invest in systems and processes which continue to improve efficiency, lower operational costs and increase customer service capabilities

• Further growth to be gained in existing businesses by leveraging our multi-national position with select vendors bringing more value to customers

• NOXS/Crane acquisitions add scale and new customer segments, improve business mix, enhance margins and accelerate earnings capability

• Globalisation of the business is presenting new opportunities

LOGICALIS GROUP

LOGICALIS GROUP Highlights

• Revenues up 37% to $693 million (11% organic growth)

• Gross margin increases by 22.3% (FY2006 21.6%)

• EBITDA up 60% to $26.8 million (FY2006 $16.7 million)

• Robust growth in profitability from both the UK and US

• South America sustains the strong growth achieved in FY2006

• Three acquisitions completed during FY 2007

• Offices opened in Chile and Peru, extended in Germany

• Number of key vendor awards won from IBM and Cisco

LOGICALIS GROUP Financial Performance Summary

($ ‘000s) Feb 2006 (restated) Feb 2007 Growth

Revenue 505,179 693,113 37%

Gross Margin 109,182 154,972 42%




EBITDA 16,707 26,795 60%

EBITDA % 3.3% 3.9%


As % of Revenue 2.3% 2.7%

Growth has produced stronger results in FY 2007

LOGICALIS GROUP Revenue % Geographic Split


North America generated 60% of revenue

North America

South America

UK

Germany

31%

1%

7%

61%

North America

South America

UK

Germany

32%

2%

6%

60%

LOGICALIS GROUP Revenue Segmental Split

Proportion of product in sales mix relatively constant

Product81%

ProfessionalServices

8%


ManagedServices

5%

Product81%

ProfessionalServices

9%Maintenance6%

Managed Services

4%

Maintenance6%

LOGICALIS GROUP Revenue Product Vendor Mix

IBM remains most significant vendor partner


3%

26%HP

23%Cisco

9%Others

EMC39%IBM

HP21%

IBM43% EMC

3%

Others11%

Cisco22%

LOGICALIS GROUP Gross Margin %

23.3

31.1

20.4 19.621.6

23.1

31.3

21.623.1 22.3

0

5

10

15

20

25

30

35

UK Germany NorthAmerica

SouthAmerica

Total

FY2006

FY2007

Overall Gross margin % steady

Note: 2006 Restated

LOGICALIS GROUP EBITDA ($ millions)

7

0

13

2

17

10

-1

22

2

27

(10)

(5)

0

5

10

15

20

25

30

UK Germany North America South America Total

FY2006

FY2007

Robust growth in profitability in UK and US

Note: EBITDA total includes central group management costs

LOGICALIS GROUP Key Financial Measures

($’000) Feb 2006 Feb 2007

Deferred Revenue 15,933 26,222

Inventory 14,536 23,706

Inventory Days (Excluding Spares Stock) 14 16

Accounts Receivable 87,468 147,164

DSO Days 47 50

Accounts Payable 97,145 116,987

DPO Days 82 73

Net Cash 26,605 8,562

Net cash reduction reflects acquisitions and growth driven increased working capital

Note: Net revenue accounting for vendor maintenance contracts means that absolute numbers remain the same but ratios deteriorate compared to previous gross accounting method

LOGICALIS GROUP Headcount by Region


North America 441 608

South America 201 251

Europe 343 494

Total 985 1,353

Increase due to acquisitions and growth in scale

LOGICALIS GROUP Recent Important Wins

US Manufacturer HP Technologies and managed services $5.8M

US Mobile OperatorStaffing for operations and application development

$5.0M

US Entertainment Three year managed services $0.9M

UK Financial Services IBM z-series (mainframe) $4.9M

UK Major Telco Multi-national managed services $6.0M

UK Leisure Significant Cisco IPT deal $1.5M

South America

Government Cabling and Cisco infrastructure $2.3M

South America

Telecom Security in network backbone $1.0M

South America

Telecom Wi-Max project $400k

LOGICALIS GROUP Future Outlook

• Continuing to execute well defined strategy

• Focused on gaining market share and growing revenues

• Strong growth expected from Cisco solutions

• Emphasis placed on increasing annuity managed service solutions

• Acquisition opportunities continue to be evaluated

• Favourable market conditions should drive further margin expansion

ANALYSYS MASON GROUP

ANALYSYS MASON GROUP Highlights

• International non-UK revenues now 55% of total

• Performance similar to prior year despite completion of large wireless network rollout project

• Restructuring of Catalyst CRM division

• Strong cash generation

• Pioneer in management of world’s 1st 3G network sharing alliance

ANALYSYS MASON GROUP Financial Performance Summary

($ ‘000s) Feb 2006 Feb 2007 Growth

Revenue 59,750 61,352 3%

Gross Margin 21,730 22,265 3%


EBITDA 6,223 6,202 0%

EBITDA % 10.4% 10.1%


Operating Profit % 9.8% 9.4%

ANALYSYS MASON GROUP Revenue % Geographic Split

FY 2006 FY 2007

UK

29%

1%45%

25%

USA

Rest of World

Europe

USA

Rest of World

Europe

UK63%

1%

17%

19%

ANALYSYS MASON GROUP Revenue Segmental Split

FY 2007FY 2006

Analysys Research

8%Analysys Consulting

40%

Catalyst12%

Mason40%

Analysys Consulting

46%

Analysys Research

8%

Mason37%

Catalyst8%

ANALYSYS MASON GROUP Gross Margin %

32.4

44.4

34.7

22.3

36.4

32.6

43.9

29.4

12.9

36.3

0

5

10

15

20

25

30

35

40

45

50

Mason ACL ARL Catalyst Total

FY2006

FY2007

ANALYSYS MASON GROUP EBITDA – ($ millions)

0.5 0.60.1

-0.1

3.9

6.2

2.4

6.2

2.5

4.4

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Mason ACL ARL Catalyst Total

FY 2006FY 2007

Note: EBITDA total includes central group management costs

ANALYSYS MASON GROUP Headcount by Division


Mason 74 78

Analysys Consulting 80 85

Analysys Research 35 36

Catalyst 21 18

AMG Support Services (FTE’s) 44 45

Full Time Headcount 254 262

Associates 59 40

Total 313 302

ANALYSYS MASON GROUP Recent Important Wins

Analysys Consulting and Research Mason and Catalyst

Business Plan for Etisalat’s mobile service launch in Afghanistan

National Grid divestment due diligence

Advising Singapore regulator on regulatory model reform Review of BSkyB capability for providing voice services

Multiple MLRIC product sales (Denmark, France, SA, UK) Specialist assurance on system integration, fleet mapping and rf optimisation for London Underground

Continuation of Oger/Turk Telecom post-acquisition framework

National review of English ambulance service control rooms to design new operating models

Profitability analysis at Orascom Specification of RFP for OSS/BSS systems to operate new 3G network and PMO support for Time Malaysia

Joint Projects

Vodafone-Orange network-sharing business planning – ACL / Mason

Mobile service launch assistance for Etisalat in Egypt – ACL / Mason / Catalyst

Market segmentation and market-facing BPR at Maltacom – ARL / Catalyst

ANALYSYS MASON GROUP Future Outlook

• Revenue and profit growth expected in the next year

• Continuing to build on the merged brand and broaden consulting capabilities

• Further internationalisation of the operations

• Investment in internal systems and processes to extend growth aspirations

• Telecoms/Internet broadband environment remains robust

EMERGING MARKET OPERATIONS

AFRICA & MIDDLE EAST Highlights

• Historically assets are substantially distribution based

• Recently completed BEE transaction in South Africa

• Development of IT services group in South Africa

• Establishment of Cisco focused Comstor operation in Dubai, Middle East

• Operations include: Westcon SA, Online, Comstor ME & African Legend Indigo

• Expansion planned in Turkey through JV operation

AFRICA & MIDDLE EAST Financial Performance Summary

($ ‘000s) Feb 2006 Feb 2007 Growth

Sales 86,889 141,750 63%

Gross Margin 12,523 21,750 74%




EBITDA 2,220 5,165 133%

EBITDA % 2.6% 3.6%


Operating Profit % 2.1% 3.4%

Net Interest 814 623

Pre-Tax Income 1,014 4,142 308%

Pre-Tax % 1.2% 2.9%

DATATEC GROUP

DATATEC GROUP Market Conditions

• Outlook for the global ICT industry remains favourable

• Europe’s improving growth is offsetting softness in the US

• Rest of the world including emerging markets are showing strong growth

• Leading technology vendors are in much better shape

• Major adoption of broadband is driving new business opportunities

DATATEC GROUP Strategy and Prospects

• Growth trends of the major divisions continue

• Scale and improving business mix is driving operating leverage

• Expecting continued revenue growth and further margin expansion

• Increasing contribution from Europe and Emerging markets

• Targeting $1 billion of annualised revenue growth next year

• Strategy to target accretive acquisitions that can be logically integrated

• Distribution to shareholders to increase 100% to R0.70 ($0.10) per share

QUESTIONS

datatec group audited results for the year ended 28 february 2007

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