Annual Review 2012
At the core of our business is our passion fordelivering the right solutions for our customers.  Through our expertise and...
01Inside...        Insightful         Understanding trends         Understanding customers’ needs         Know-how and exp...
02LogicalisAnnual Review 2012
03The future is an exciting place to be. Our insight stemsfrom our ability to constantly look forward, anticipatingthose t...
04                     More information                     pages 14-15 What’s                     driving the IT market  ...
05The current competitive landscape requires us to think morecreatively and perform more effectively. At the heart of ourap...
06                     More information                     http://www.linkedin.                     com/company/logicalis...
07At Logicalis we are inspired to help our customers achieve theirbusiness goals through technology. Since today’s technol...
08                                                       PromonLogicalis Brazil  Logicalis Australia                      ...
09“My job is to help our clients achieve their growth goals, using the best combination of technical and commercial tools....
10  University of the Highlands and Islands,  UK Ground-breaking video conferencing network                               ...
11                                                            API Healthcare, US                                          ...
12                     “Revenue from total services                      was up 36%, while strong                      gro...
13Financial          I am delighted to report that Logicalis delivered                   another strong result. Our full y...
14For CIOs, the imperative to work more closely withthe business has never been more urgent. At a timewhen IT budgets cont...
15                               Cloud services                                Security                               For ...
16Chief Executive Officer’s review                     “Our strategy has been                      to replicate local market...
17I am pleased to report another strong year forLogicalis, with increased revenues and margins.            ResultsIn line ...
18Chief Executive Officer’s review                                                 Our businesscontinued                    ...
19                    Our business                                           Our business                    Data Centre a...
20Consistent international sales,services and cloud engagement North America                          South America       ...
21Market analysts predict                           Growth in emerging marketsstrong growth in ICTinvestment to continue  ...
22Business and technologyworking as oneWe fulfil our core strategic                              to get business and techno...
23across all consumption models...   with award-winning                                   strategic partnerships.         ...
24Corporate                                                                        Our core values                        ...
25Logicalis US also participates in a toner recycling           programmes) and to Nicole (a Buenos Aires provinceprogram ...
26Board of Directors1. Jens Montanana                                   2. Ian Cook                                       ...
274. Nigel Drakeford-Lewis                             Rob Evans                                          Felipe LimaChief...
28Financial overviewSouth America delivers                                                 Increased services mixvery stro...
29Robust growth                                                    Stable gross marginsin Cisco solutions                 ...
Logicalis Annual Review 2012
Logicalis Annual Review 2012
Logicalis Annual Review 2012
Logicalis Annual Review 2012
Logicalis Annual Review 2012
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Logicalis Annual Review 2012

  1. 1. Annual Review 2012
  2. 2. At the core of our business is our passion fordelivering the right solutions for our customers. Through our expertise and know-how we have the insight to enable businesses to find new andinnovative ways to address their ICT challenges.Today’s technologies can do remarkable things and, with the right solutions, our customers can be more responsive, more agile and more competitive. At Logicalis, we are inspired by technology – that’s why we’re here to help your business stay at the forefront. Because we dare to be different! Contents IFC Introduction 20 Consistent international 02 Insightful sales, services and 04 Innovative cloud engagement 06 Inspired 22 Business and technology 08 Inspired every day working as one 10 How we inspire our clients 24 Corporate responsibility 12 Chairman’s statement 26 Board of Directors 14 What’s driving the IT market 28 Financial overview 16 Chief Executive 30 Financial results Officer’s review 31 Our subsidiaries
  3. 3. 01Inside... Insightful Understanding trends Understanding customers’ needs Know-how and expertise Innovative New solutions and services page 02 New consumption models and technologies page 04 Inspired Strong Cross-collaboration Our expertise and insight performance ‘Business and technology working as one’ page 06 Strong services portfolio Sharing local knowledge Extending our capabilities across multiple regions page 16 Results +18% International Total sales $1.2 billion EBITDA +27% $67.4 million Annuity service revenues $201 million +41% operations Spotlight on emerging markets Operating profit +36% Global service delivery page 20 $42.6 million Logicalis Annual Review 2012
  4. 4. 02LogicalisAnnual Review 2012
  5. 5. 03The future is an exciting place to be. Our insight stemsfrom our ability to constantly look forward, anticipatingthose trends that are most likely to impact our customers’businesses. Working closely with our strategic partners,we turn insight into action, identifying and deploying thetechnologies that we believe will have the most positiveimpact on our customers’ business transformation.Because we see things differently!Anticipating trends New technologiesThe technology industry is awash with speculation Every day at Logicalis we work with new technologiesabout the ‘next big thing’. At Logicalis, we listen helping companies to achieve unprecedentedcarefully to respected IT analysts, but we also freedom and choice in the way they deploy IT systemshave our own views about what the future looks like, and services in cloud computing, both public andbased on what we hear from our customers and our private; with a ‘bring your own device’ (BYOD) policytechnology partners. to allow more flexibility to employees: with video conferencing and social networking tools for moreIn this way, we cut through the hype to deliver working effective collaboration; and with Big Data approaches,solutions that consistently exceed our customers’ to turn the data they collect into meaningful,expectations in areas such as cloud computing, actionable information.mobile consumerisation and Big Data. Know-how and expertiseWorking closely with vendors As an international company, Logicalis takes a worldWe enjoy strong strategic partnerships with some view of the macro trends that affect our customersof the world’s most respected technology companies: and their businesses, and we see the bigger picture.Cisco, HP, IBM, NetApp and VMware. Between them, We understand both the complex, high-pressurethese companies invest more than US$15 billion each environment in which modern businesses operateyear in R&D, and we in turn invest substantial sums and the technologies that will help them successfullyto ensure that our employees achieve the highest navigate the challenges they face.levels of accreditation from these vendors. Logicalis – your insightful advisor. Strategic objectives What we said What we did What we will do Invest in innovation for competitive advantage Developed new cloud offerings Continue to roll out new cloud Infrastructure-as-a-Service, services across all our local markets Video-as-a-Service Give employees the tools they need to get Implemented new work collaboration Continue with our BYOD strategy to work done tools and wider adoption of video support wider adoption of business conferencing systems to mobile devices Address data security issues with confidence We have implemented ISO 27001 and Introduce new security services into have incorporated stringent security our portfolio to support the expansion of practices into our Cloud Services build Cloud Services, mobile consumerisation and Business Analytics Logicalis Annual Review 2012
  6. 6. 04 More information pages 14-15 What’s driving the IT market More information pages 18-19 CEO statementLogicalisAnnual Review 2012
  7. 7. 05The current competitive landscape requires us to think morecreatively and perform more effectively. At the heart of ourapproach is innovation: finding better ways to address newchallenges. Our customers come to us with questions.Our job is to deliver innovative new solutions and services,in the form of technologies that do remarkable things, sothat our customers can achieve outstanding business results.Because things are changing!New products Business analytics that enable employees toAt Logicalis, we know that smart companies manipulate corporate information to gain valuablepursue an IT strategy based on incremental insight on recent performance and to identifytransformation – one that builds on what they have emerging trends.today and prepares them for what they’ll need Seamless and secure access to informationtomorrow. Our role as advisor is to help them take and business resources.a considered, balanced approach to how they own,operate and fund their IT infrastructures. Coming soon When customers are ready to embrace furtherToday, we see customers replacing the outdated transformation, we’re ready to help them navigate thelegacy infrastructure that slows them down with: path of new consumption models and technologies. Private clouds that use virtualisation technology They may wish to allow employees to provision their to create scalable pools of processing power and own IT services from the private cloud using an storage within their data centres, where routine employee self-service model. They may wish to IT administration tasks are automated. identify and deploy ‘X’-as-a-Service (XaaS) in the Social collaboration tools that break down the public cloud, as an alternative to an application or geographic barriers that hamper collaboration, so service they currently run in-house. Or they may wish that employees can share ideas and information to use a combination of public and private cloud with colleagues, customers and partners. services to support a particular application or service, Mobile tools that keep employees productive, using a hybrid cloud approach. Whatever their plans, whether they’re travelling on business, visiting we’re there to offer our advice, support and expertise, customer sites or simply working from home. as well as access to our own world-class cloud computing and data centre facilities. February 2012 March 2012 April 2012 May 2011 Logicalis UK International Cisco Logicalis wins Logicalis brings New becomes data ISE ATP accreditations Cisco Global IBM Business product centre and cloud puts Logicalis ‘in Enterprise Partner Analytics to provider to Janet control’ of secure BYOD of the Year at CiscoTimeline the Cloud Education Community infrastructure delivery Partner Summit 2012 NewJanuary July 2011 product February 2012 March 2012 January2011 Logicalis UK Logicalis Enterprise Logicalis Enterprise New 2013 product launches ImmersiV – Cloud powers Cloud extends consumption-based intelligent Clinical capabilities to provide Video-as-a-Service Image Management multi-framework offerings from desktop for healthcare Platform-as-a- to Telepresence customers Service (PaaS) Logicalis Annual Review 2012
  8. 8. 06 More information http://www.linkedin. com/company/logicalis/ products?trk=tabs_biz_ productLogicalisAnnual Review 2012
  9. 9. 07At Logicalis we are inspired to help our customers achieve theirbusiness goals through technology. Since today’s technologiesmove at such a fast pace, attention to detail is paramount.It’s important to us that, in addition to providing our customerswith the right solutions, we deliver exemplary customer serviceevery day.Because together we can make a difference!Cross-collaboration ExpertiseThe world is shrinking – but at the same time it’s Knowledge is power: that’s why we invest time andbecoming more complex. That calls for close resources in ensuring that our employees are up tocollaboration, not just internally, but with our speed on the latest technologies and are qualifiedcustomers and partners. With over 60 offices around through vendor accreditation to implement them.the globe and almost 3,000 employees, we’re proud At the same time, we recognise that we must alsoof the skills and resources we are able to bring to the be expert in mature technologies, too. That way,task of helping customers make their business-critical we can help customers get the most from previoustechnology decisions, wherever they’re located. Our IT investments and deliver seamless integrationglobal organisation boasts experience and industry between old and new systems.knowledge that is both deep and wide, while our localpresence in key markets means that we can guarantee Inspiredrapid response times and faster advice. Add to that What inspires us? Our customers do. Every day, ourmix the insight we gain from our technology partners work brings us face to face with business leaders inand you’ll see that our customers have access to a organisations of all sizes who dare to think differently.wealth of thought leadership on innovation, best Our conversations with them don’t just focus onpractice and operational excellence. technology, but on the future they’d like technology to create for their businesses. For us and for them, getting ‘business and technology working as one’ is both a passion and a serious commitment. Logicalis Annual Review 2012
  10. 10. 08 PromonLogicalis Brazil Logicalis Australia Logicalis US“I like collaborating with the professional services team to create exciting propositions for our customers.” Andrew Ross Business Development Manager “It’s all about understanding Alberto Ramos Solutions Architect the market scenario to provide relevant information that matches with our client’s expectations.” Fernanda Santana Marketing Analyst Logicalis Annual Review 2012
  11. 11. 09“My job is to help our clients achieve their growth goals, using the best combination of technical and commercial tools.” Marco Locatelli Business Analyst “It makes my day to receive positive feedback from clients regarding our quality of service, and to have them stay as our customers throughout the years.” Ofelia Estrada Client Engagement Manager Logicalis Singapore Logicalis UK “I take great pride in being part of the exceptional team Logicalis has in Wales. If ever you need inspiration, then look no further: their enthusiasm to meet and exceed customers’ expectations is contagious. What a team!” Peter Ford Service Delivery Manager Logicalis Annual Review 2012
  12. 12. 10 University of the Highlands and Islands, UK Ground-breaking video conferencing network More information www.ap.logicalis.com/“Logicalis UK has consistently provided our-customers/case- studies/saipem.aspx support throughout our relationship with them, and continues to work with us on this sophisticated video conferencing solution that keeps pace with our evolving requirements. Video conferencing is in the ‘DNA’ of the University of the Highlands and Islands. It is pivotal; we simply could Telefónica, Chile not operate without it.” Bob Brandie Senior Video Conference Technician, University of the First Green data centre Highlands and Islands in Chile “This new Green data centre is part of the Telefónica Group’s international network of data centres. Logicalis Chile’s work has enabled us to fulfil our clients’ needs. Now we can deliver the international support and services our customers’ More information businesses and operations require, ensure www.uk.logicalis.com/ our-customers/ that their information and processes are case-studies/uhi.aspx constantly available and safeguarded against any contingency situation, whilst also diminishing our carbon footprint and providing greater energy efficiency.” Mauricio Flores Engineering Specialist, Telefónica Chile Logicalis Annual Review 2012
  13. 13. 11 API Healthcare, US Workforce More information http://www.us.logicalis. management solution com/logicalis-business- customers/case- delivered through the studies/api-healthcare. aspx Logicalis Cloud “It was a great fit for us organisationally. Logicalis has been everything we thought a cloud provider should be – and more. They’ve been so willing to work with us every step of the way. Saipem, Singapore It’s a great relationship. Logicalis is a true partner.” High-availability Jon Hardenbrook Technical Product Manager, API Healthcare server virtualisation project for the oil and gas industry“We are confident that we have made the right choice in our selection of both the technology design and the ICT partner. There is no doubt that we are counting on Logicalis to play an even more integral role in providing the regional infrastructural platform.” Gamesys, UK Jesus Macatangay IS Manager, Pacific Ocean and Indian Ocean, Saipem Business analytics project for the online gaming industry “It is really fantastic to have access to a technical account manager, to have someone to exchange ideas with and provide extra consultancy advice and guidance when and if we need it. We’re also really pleased with the Inca (a Logicalis company) Helpdesk self-service portal, SupportWorks; this has led to a process of opening calls Related case study and documenting progress that is View video refreshing to see.” www.logicalis.com/our- customers/case-studies/ Nick Hughes gamesys.aspx BI Manager, Gamesys Logicalis Annual Review 2012
  14. 14. 12 “Revenue from total services was up 36%, while strong growth in annuity service revenues of 41% reflected the long-term strategic focus on this segment of the business where investments were made in data centre and cloud-based services assets.” Jens Montanana ChairmanLogicalisAnnual Review 2012
  15. 15. 13Financial I am delighted to report that Logicalis delivered another strong result. Our full year results show On 31 August 2011, Logicalis sold 10% of the share capital in Promon-Logicalis Latin America Limitedoverview another solid performance, despite the slowdown (PLLAL) to its partner in South America, Promon SA. of the second half. Overall, Logicalis’ revenues Logicalis first partnered with Promon in May 2008 and were up 18%, of which 11% was organic growth. formed PLLAL to develop its existing South American The UK and US markets were particularly business. Since then the business has gone from challenging and growth in the Asia Pacific region strength to strength.More information softened. However, there was no weakening in thepage 28 South America region, where telecommunication Markets service providers continue to invest in their core Demand in the markets in which Logicalis operates infrastructures, with Brazil again delivering was mixed during 2011. Demand for technology a particularly strong performance. products continued to increase in the South America and Asia Pacific regions (excluding Australia), but the Superior growth in South America over the last markets were more challenging in Europe, the US and three years has, for the first time, made that Australia. This was reflected in the financial results region the largest market for Logicalis, accounting reported by Logicalis’ main vendor partners, Cisco, for almost 40% of total revenues and 60% of HP and IBM, all of which experienced either flat or low consolidated EBITDA. single-digit growth in product revenues. High levels of capital expenditure among telecommunication Europe’s reduction as a share of the total reflected operators and services providers in South America, flat revenues in the UK and Germany. In Asia, we an important customer segment for Logicalis in this extended our presence with the formation of a region, enabled Logicalis to achieve very strong 51% controlled joint venture with local IT partners PT growth in Cisco product revenues. Metrodata Electronics, Tbk, and this region showed good organic growth and very strong margins, driven Overall, the outlook for ICT investment appears by its exceptional services mix. to be similar to the actual experience in 2011. Revenue from product sales was up 13%, with robust Market prospects increases in the Cisco and HP vendor categories. Market analysts predict strong growth in ICT Revenue from total services was up 36%, while strong investment to continue across emerging markets in growth in annuity service revenues of 41% reflected 2012, with South America being particularly strong in the long-term strategic focus on this segment of the both business and consumer ICT spending, both of business where investments were made in data centre which are driving significant demand for networking and cloud-based services assets. equipment in service providers, private-sector and government organisations. Elsewhere, the outlook The strong increase in South American product sales for general IT spending is less certain, although resulted in slightly reduced gross margins in that investment in next-generation data centre virtualisation region. The US reduction was primarily as a result technologies, unified communications and of IBM revenues and rebates declining and reduced collaboration and cloud services is expected to be professional services margins. strong. Growth at the market level is expected to be low in the more developed economies. Germany was impacted by its lack of scale and the UK margins, having fallen in the last two years, have now The overall outlook is positive. We do not expect the stabilised. We remain very pleased with the stability UK to deteriorate further and improvement is expected of gross margins, which have remained in the 22% in our performance this year, despite the challenging to 23% range in recent years. environment. So far, the results are encouraging. During the first half of the financial year, Logicalis South America and Asia Pacific are expected to completed two acquisitions to consolidate its position continue to outperform in relative terms. Economic in the UK and US, respectively. In April 2011, Logicalis data from the US suggests a gradually improving UK acquired Inca Software, an IBM Cognos partner, recovery, which should support our growth and in order to create one of the first UK system integrators margin expansion expectations. Germany remains capable of delivering a full suite of next-generation a challenge in terms of scale and profitability. business transformation tools: analytics, collaboration and cloud services. Our geographic diversity and longer-term investments in data centre and cloud service offerings should In July 2011, Logicalis US acquired the business and underpin our continued expansion and we expect assets of Netarx, a Cisco Gold partner and provider to deliver comparative growth again this year. of managed services, data centre and collaborative IT solutions to customers in the US Midwest. Jens Montanana Chairman During the year, the Group incorporated a new company in Indonesia focused on network integration. The Indonesian company, which commenced trading in January 2012, has a 49% partner, PT Metrodata Electronics, Tbk. Logicalis Annual Review 2012
  16. 16. 14For CIOs, the imperative to work more closely withthe business has never been more urgent. At a timewhen IT budgets continue to be constrained, they’replacing their technology bets wisely.LogicalisAnnual Review 2012
  17. 17. 15 Cloud services Security For CIOs who need to get new applications Digital crime is evolving rapidly. IT security and services up and running with minimal horror stories continue to hit the headlines investment in new IT infrastructure, cloud on a regular basis, and many CIOs services have emerged as a flexible, recognise that they need to urgently scalable option that can often be funded reassess their organisation’s approach out of operational expenditure. to safeguarding corporate data if theyMore information are going to stay one step ahead of anhttp://www.uk.logicalis. IT consumerisation increasingly sophisticated breed ofcom/our-customers/case- Today’s employees demand greater choice cybercriminal. As a result, encryptingstudies/john-lewis.aspx and freedom in the way they work than stored data and preventing unauthorised ever before. For many, this means the access to it have become top priorities. ability to access the data and tools they need to get work done from any location, Social business using the devices of their choice. Employees are now using a range of new Workforces that are empowered in this tools and approaches to form relationships, way are more productive – but for CIOs, interact, make decisions and accomplish that means identifying approaches that work, both internally and with external strike the right balance between freedom customers and suppliers. In turn, this leadsMore information for employees and control for the business. to more effective collaboration, greaterhttp://www.cxounplugged. innovation and new operational efficienciescom/2012/02/byod-and-the- Big data for the business.cloud-the-dilemma-facing-it/ Extracting meaningful information from corporate data to fuel smart decision- making is an established business priority. Doing it effectively in an age when corporate systems, social media feeds, video and connected devices such as smart meters generate massive data volumes is a new challenge. Big Data has emerged as a way to address the shortcomings of conventional approaches to data analysis. Logicalis Annual Review 2012
  18. 18. 16Chief Executive Officer’s review “Our strategy has been to replicate local market innovation and build out a stronger, unified portfolio of solutions and services that we can take to all our markets.” Ian Cook Chief Executive OfficerLogicalisAnnual Review 2012
  19. 19. 17I am pleased to report another strong year forLogicalis, with increased revenues and margins. ResultsIn line with our financial year 2012 (FY 2012) business Revenues up 18% to US$1.24 billion with organicobjectives, we have also increased our services growth of 11%portfolio and, in particular, our annuity serviceincome, which rose 41% as a result of our success Product revenues up 13%, service revenuesin developing overall managed services and data up 36%centre and cloud services offerings. Annuity service revenues up 41% EBITDA up 27% to US$67.4 millionWe increased product-to-services ratio to 75/25, and (FY 2011: US$53.0 million)progress in our data centre infrastructure and cloud Acquisitions completed during FY 2012:services initiatives continues to grow the number of Inca (UK) April 2011longer-term contracts we have won with the launch of Netarx (US) July 2011new cloud services in both Infrastructure-as-a-Service(IaaS) and Video-as-a-Service (VaaS). Joint venture in Indonesia PT. Metrodata Electronics, TbkI would like to thank all of our employees in allcountries for their hard work and commitment inachieving these results. I would also like to extenda special thank you to all our customers, partners Our organisation stores more and more data butand stakeholders whose support we greatly value. how can we derive real business value from it? Should I swap traditional methods of procurementOur strategy has been to replicate local market for IT infrastructure that’s offered under new, flexibleinnovation and build out a stronger, unified portfolio consumption models?of solutions and services that we can take to all our Logicalis’ solutions and services go-to-marketmarkets, sharing local knowledge and extending our strategy is built around our core engagements –capabilities to support organisations across multiple unified communications and collaboration, data centreregions, whilst retaining customer intimacy. and cloud services, and professional and managed services, with security an important feature of all theseStrategy technology markets. Each of these engagementsWe are seeing several trends now driving the ICT help our customers use technology to meet strategicmarket: consumerisation, personal device proliferation, business objectives and exploit their technologyuser mobility, virtualisation, cloud computing, investments as a key business differentiator. We willSoftware-as-a-Service (SaaS), and new ICT continue to service our customers’ changingconsumption and operational models. All of these requirements from supporting the changing user-are providing new challenges for the CIO, raising experience demands of increased reliance on video,questions such as: smartphones or tablet computers and secure mobile How can we devise a social networking strategy that working, to facilitating shifts in spending from capital will enable our company to achieve new levels of to operational budgets through the increased use of engagement without introducing unnecessary risks? cloud services. I want to reduce our IT costs through using the cloud, but is it safe? My users bring their own devices in to the workplace, so how can I deliver access to our business systems in a controlled way? We see a new balanced consumption model for IT solutions and service partnerships Customer Logicalis IT focusing on business outcomes Must be expert delivery partner for mature and Requiring maximum efficacy from IT investments present technologies Owning less infrastructure and delivering less Demonstrate capability in emerging technologies context services Understand the new technical, operational and Moving to more consumption-based models commercial models of IT consumption Specifying service or business outcome Adopt greater role in service and Service not product Level Agreements Logicalis Annual Review 2012
  20. 20. 18Chief Executive Officer’s review Our businesscontinued Communications and Collaboration Logicalis is a recognised leader in the design, implementation and support of highly integrated Communications and Collaboration solutions, with best-in-class products from Cisco, IBM, Microsoft, Tandberg (now part of Cisco) and other leading vendors. Voice and IP Telephony Network Infrastructure Contact Centre Messaging Presence Rich Media Conferencing Collaborative Content/Web 2.0 Video Security BYOD, big data, big connectivity As a result, solution providers such as Logicalis Logicalis takes a true multi-dimensional and multi- are increasingly asked to provide a wider and more disciplinary approach to helping customers define varied engagement with clients. As well as providing and deliver a coherent and compelling BYOD strategy. traditional technology expertise in building out IT We help customers develop a BYOD strategy that systems, Logicalis continues to augment clients’ spans a range of technology options as well as capabilities and IT resources, introducing new business functions. It is just as important to engage solutions from pervasive wireless access for corporate with legal and HR departments to define acceptable applications on any device of choice (BYOD) to corporate policies as it is to implement a secure delivery of data storage and management from the access infrastructure able to enforce them. cloud, and Business Analytics-as-a-Service. These Recognising that the use of consumer devices will are delivered along with operational support for greater change the way users access applications is as parts of the customers’ core IT infrastructure, and we critical as agreeing who reimburses users for their also provide traditional solutions in new service based data call plan when using it for company business. consumption models. BYOD is the ultimate example of business and Awards technology working as one, and Logicalis works This strategy, combined with our established technical with customers to define, design, build, deploy and skills, has been recognised by our key vendors for the operate a BYOD environment, whether that is working year under review. on strategy with our in-house consulting teams or building secure BYOD infrastructure and services with In 2012, at the Cisco Partner Summit, Logicalis technology from our world-class technology partners. was presented with 14 awards from Cisco including a global award for Enterprise Partner of the Year We know also that organisations already gather and awarded to PromonLogicalis (Brazil). Logicalis also store huge amounts of unstructured data – quantities received 13 regional and country awards across that exceed the capacity of traditional data Latin America, Europe, the US and Asia Pacific. management technologies. Already, this presents a number of well-documented challenges. But the In addition, Logicalis UK and Ireland was recognised trend seems likely to accelerate, since many of the by IBM as the winner of the IBM Choice Award for top technologies predicted to make an impact in 2012 Business Partner in Northeast Europe and received an generate huge volumes of data in their own right, such IBM EMEA Business Partner Excellence Award. In the as social networking tools in the workplace and US, Logicalis was the VMware National Partner of video-to-desktop capabilities. the Year. The point is that these new communication methods in the workplace will put ever more pressure on data storage and management.LogicalisAnnual Review 2012
  21. 21. 19 Our business Our business Data Centre and Cloud Solutions Professional and Managed Services Logicalis’ expertise in Data Centre solutions Logicalis’ experienced and certified specialists helps organisations operate their data centres deliver a portfolio of full life-cycle services, backed at peak efficiency, minimal cost and maximum by comprehensive Managed Services expertise. effectiveness, and provides the environmental These encompass the voice and data infrastructure benefits required today. (fixed and mobile), data centre, hybrid public and private Cloud, and applications found in today’s Virtualisation and Consolidation enterprise ICT environments. Enterprise Computing Consulting Cloud Services (IaaS, VaaS) Application Integration and Development Storage Managed Services Hosting Remote Monitoring and Management Switching Hosting Security Co-location Managed Infrastructure Services Business Analytics Security Future prospects Logicalis will continue to closely manage operating costs and maximise the opportunities provided by our multinational customer base. And we will continue to advise our clients on how to get more tangible outcomes from their technology investments and combine maximum IT business impact with balanced and sustainable consumption.Gamesys We will build out a common portfolio of solutions and services in the geographies where we currentlycase study concentrate and continue to focus on investing and innovating in our main areas of growth – data centre, unified communications and collaboration solutions, cloud services and managed services. We see emerging trends such as IT service automation,More information BYOD, mobility, business analytics and cloudpage 11 computing creating new opportunities to bring increased value to our client base and leverage our trusted partnerships with world-leading technology vendors. The macroeconomic outlook is uncertain but the recovery is expected to continue, although some markets will be more difficult than others. Our customers are generally well positioned to invest and our management is optimistic about the next financial year. We are planning for both revenue and operating profit growth. Ian Cook Chief Executive Officer Logicalis Annual Review 2012
  22. 22. 20Consistent international sales,services and cloud engagement North America South America Europe Market position Market position Market position #1 HP Enterprise Partner, Top 3 IBM #1 ICT Integrator in the region, present in Present in UK & Germany, UK Top 3 Business Partner, Cisco Gold partner Argentina, Bolivia, Brazil, Chile, Colombia, Cisco Gold Partner, UK #1 IBM Partner, Ecuador, Paraguay, Peru and Uruguay UK European IBM Business Partner of Year, UK Top 5 HP Partner Key vendor offering Key vendor offering Key vendor offering Cisco, HP, IBM, Microsoft, EMC, Cisco, Arbor, Nominum, IBM, EMC, Cisco, HP, IBM, Microsoft, NetApp, CA, VMware NetApp, VMware VMware FY 2012 Employees: FY 2012 Employees: FY 2012 Employees: revenues: revenues: revenues: $384.3m 730 $446.6m 1,175 $305.6m 575LogicalisAnnual Review 2012
  23. 23. 21Market analysts predict Growth in emerging marketsstrong growth in ICTinvestment to continue South America Logicalis’ South American operation is the company’sacross emerging markets strongest region, representing almost 40% of its revenues and with over 1,000 employees. The South American operation hasin 2012. its main offices in São Paulo (Brazil) and Buenos Aires (Argentina) and also has local presence in Bolivia, Colombia, Chile, Ecuador, Paraguay, Peru and Paraguay. The company is the largest independent integrator for Cisco Data Centres throughout the region and a major supplier to the leading North America South America telecom providers. Logicalis South America will continue to West Chester São Paulo (Brazil) leverage its expertise in data centre, enterprise mobility, and Phoenix Asia Pacific video conferencing and is continuing to develop its managed Europe Shanghai (China) services capability across the region. Slough (UK) Cyberjaya (Malaysia) Bracknell (UK) Sydney (Aus) FY12 Revenue $446.6m 446.6 298.1 Managed Service Centres North America South America Compound Annual Growth Rate 192.5 +52% West Chester São Paulo (Brazil) Phoenix Buenos Aires Europe (Argentina) Slough (UK) Asia Pacific Cologne (Germany) Shanghai (China) 2010 2011 2012 Cyberjaya (Malaysia) Asia Pacific Logicalis expanded its presence in Asia with the formation of a 51% controlled joint venture in Indonesia, with local IT partners P.T. Metrodata Electronics, Tbk. Indonesia is South East Asia’s most populous country and one of the region’s fastest growing economies. The Asian region as a whole showed good organicAsia Pacific growth and very strong margins, driven by its high services mix. The company has three main units centred in Australia, Singapore, and Taiwan, with further operations in China, Hong Kong, Indonesia and Malaysia. Logicalis also has a primary managed services centre in Malaysia, supporting the needs of multinational corporations and service companies across the Asia Pacific region, as well as providing network management on behalf of its sister operations in the US and the UK.Market positionPresent in Australia, China, Hong Kong, FY12 Revenue $105.1mIndonesia, Malaysia, Singapore and Taiwan. 105.1Cisco Gold Partner 86.6Key vendor offeringCisco, EMC, NetApp, VMware Compound Annual Growth RateFY 2012revenues: Employees: +274% 7.5 2010 2011 2012$105.1m 495 FY10* US$7.5m (1.5 months only as acquisition date 15 Jan 2010) Logicalis Annual Review 2012
  24. 24. 22Business and technologyworking as oneWe fulfil our core strategic to get business and technologyobjectives and create value... working as one in focused areas... For our customers For our business Communications and Collaboration Enable technology Maintain our relevance Voice and IP Telephony Rich Media and business to to our customers as Network Infrastructure Conferencing work better together their demands change Collaborative Contact Centre Improve efficiency of Invest in innovation and Content/Web 2.0 Messaging corporate IT resources infrastructure for Video competitive advantage Presence Maximise value from Security past investments Offer our customers Embrace new choice in ownership and technologies with operational models confidence Build a consistent Exploit new ownership international footprint and consumption Leverage our Data Centre and Cloud Solutions models partnerships with the world’s leading Virtualisation and Hosting Enable new user Consolidation experiences and technology vendors Switching Enterprise Computing Security services Employ the best people with the skills that make Cloud Services Address security with confidence a difference for our Storage customers Professional and Managed Services Consulting Hosting Application Integration Co-location and Development Managed Managed Services Infrastructure Services Remote Monitoring and Business Analytics Management SecurityLogicalisAnnual Review 2012
  25. 25. 23across all consumption models... with award-winning strategic partnerships. Logicalis has built strategic partnerships with the world’sSystems most respected solutions and services vendorsIntegrator We achieve the highest level of accreditations and retain the highest quality expertise These vendors provide the building blocks of our solutions and services portfolios Vendors are mutual partners in Logicalis’ expanding cloud services portfolioCloud ServicesManagedServices Logicalis Annual Review 2012
  26. 26. 24Corporate Our core values Customer-oriented – we listen to our customers’responsibility needs and focus on delivering value to their organisations. Innovative – we attract spirited and creative employees who show heart and conviction in all that they do. Trusted – we consistently deliver on our promises.Logicalis’ policy is to actively and Honest – we have a culture that is based onenthusiastically support the welfare integrity and openness. Quality – we are professional in all our businessof its people, the environment and dealings and dedicated to achieving, and maintaining the highest standards.local communities wherever we have Empowerment – we foster a ‘can-do’ approacha presence. where helping our customers and colleagues is central to our job satisfaction. Our people Environment Logicalis aims to be an employer of choice: attracting, As a responsible international provider of ICT solutions, developing and retaining the best people. We Logicalis seeks to measure and minimise the way in understand that knowledge is the key to success and which any of its commercial activities may impact the we maintain good communications with employees environment. Logicalis is also committed to providing through our information and consultation procedures. practical advice and support to its customers and suppliers to help them along the path to ever cleaner Our personnel practices ensure that every employee, and greener ICT solutions. wherever they work, whatever their role, is treated equally, fairly and respectfully at all times. Adherence The Logicalis Group’s Slough, UK office maintains an to international health and safety standards ensures environmental management system, compliant with that our people are properly protected and cared for, ISO 14001, which is used to set and monitor targets wherever they operate. for waste reduction and reductions in power and water usage which will be audited by an independent Logicalis maintains consistent and transparent consultant. Initiatives to reduce the business’s diversity policies across all our markets. We firmly environmental impact have included ‘green’ events believe that career opportunity, recognition and reward for employees to spread understanding of good should be determined by a person’s capabilities and environmental practice throughout the organisation. achievement, not their age, sex, race, religion or nationality. Wherever we operate, Logicalis strives to Logicalis UK also continues to focus attention on the maintain a workforce that reflects the skills, ethnicity efficiency of its data centre operations leading to and demographics of the local population. incremental increases in their efficiency as measured by PUE (Power Usage Effectiveness). This is Logicalis recognises that it is the ideas, skills and incremental to the design and build work Logicalis UK capabilities of our people that drive our development reported last year and is resulting in reductions in PUE and growth. In return, Logicalis will invest in whatever of 4-6%. training and resources our people need to ensure that they are able to develop and grow with us. Logicalis US adopted a national partnership with Cintas a few years back to provide for paper recycling Logicalis is committed to rewarding its shareholders throughout all offices. Every quarter Cintas provides though consistently producing above-average returns Logicalis US with a certificate reflecting the number and growth. of trees the division has saved based upon the gross weight of paper recycled. Logicalis US also engages with its prospective landlords across its many offices to understand any green initiatives they comply with, or are implementing. This can include anything from LEED (Leadership in Energy and Environmental Design) – certified buildings, to office lights which automatically shut off upon sensing non-activity (as installed in our corporate HQ), or more efficient power supply solutions.LogicalisAnnual Review 2012
  27. 27. 25Logicalis US also participates in a toner recycling programmes) and to Nicole (a Buenos Aires provinceprogram with Global at Farmington Hills, Michigan neighborhood in need). Furthermore, the companyand Auburn Hills, Michigan locations. decided to support educational activities, working with Junior Achievement (an organisation that aims atIn South America, for the third consecutive year, bridging the school-work gap and fosteringLogicalis Southern Cone carried out paper and plastic entrepreneurship) and Equidad Foundation (a NGOrecycling campaigns for the Foundation of Garrahan that helps people in need gain ICT-related skills andHospital in Argentina, an institution focused on improve their employability). Additionally, it supportedcomplex treatments for children. The campaigns Expotrastiendas, (a traditional Buenos Aires art fairinvolve office collection of disposable paper and organised by the Argentine Art Galleries Association).plastic cups, to be donated for recycling to theFoundation. In Chile, Logicalis also participated in the yearly Teletón, which is aimed at helping the physicallyCommunity impaired.Logicalis encourages our operating companies inevery territory to create initiatives that help improve the In Brazil, PromonLogicalis supports the Juniorquality of life for their local communities. Here are just Achievement organisation – and has started toa few highlights. support ‘English For All’, a programme teaching English language to children and young adults. SinceDuring the 2011 holiday season, Logicalis US donated 2009, PromonLogicalis’ volunteer programme hasUS$55,000 to 61 charities in communities where its provided education and work readiness to childrenemployees work and live; each charity was nominated in the communities of São Paulo and Rio de Janeiro,and selected by local employees in one of 16 through the following charities: Ação Comunitáriageographical regions, and employees also made the do Brasil, Asilo João Evangelista, Associação Sercheque presentation. Their support made a big Cidadão, CAMP Vila Isabel, CCA Santa Teresa dedifference for community agencies ranging from food Jesus, Casa do Zezinho, Gotas de Flor com Amorbanks and homeless shelters to healthcare research. and Lar Escola Recanto Cristão.In addition, the Logicalis US ‘Give Back to the Some charities associated with the programme, suchCommunity’ programme allows each employee eight as Associação Ser Cidadão and Ação Comunitária dohours of work time each year to support charities of Brasil, also provide vocational education for adolescentstheir choice; total volunteer hours amounted to 2,900 and young adults from disadvantaged communities.in 2011 and 9,325 since April 2008. In 2011, PromonLogicalis launched the Portal doAlso, the Logicalis US ‘Catch a Shining Star’ Voluntariado (Volunteer Portal) where its employeesrecognition programme allows employees to nominate can find a way to help disadvantaged communities,their co-workers for going above and beyond the call and now participate in more than 89 activities.of duty; employees receiving the highest level ofrecognition are allowed to identify a charity that Logicalis Singapore has supported the SingTelLogicalis US donates US$200 to in their name. Touching Lives Fund (TLF) by participating in itsDonations of US$1,400 were made in 2011 to a total Charity Golf tournament for the past eight years.of seven charities, and US$3,800 has been disbursed The TLF is SingTel’s corporate philanthropyoverall to 19 charities since March 2009. programme and aims to provide disadvantaged children and young persons with special needs or whoLogicalis UK was a gold sponsor of the Row for are at risk with learning opportunities and the chanceFreedom campaign against human trafficking. The to improve their quality of life. Launched in 2002 tocampaign consisted of the first female crew to row consolidate SingTel’s group community supportacross the Atlantic, in order to raise money to activities, the TLF has since raised more thanrehabilitate and reintegrate victims of trafficking back S$22 million for 22 charities. The beneficiaries in 2011into society. The funds raised from the Row for were APSN Chao Yang School, APSN Tanglin School,Freedom campaign were shared between ECPAT UK Eden School, MINDS Lee Kong Chian Gardens(End Childhood Pornography and Trafficking) and The School, the Singapore Cancer Society and the SpasticA21 Campaign, which provides victim after-care and Children’s Association School.structural prevention to victims of human trafficking. In October 2011, Logicalis Singapore also took part inFor the sixth year in succession, Logicalis UK made a charity drive organised by SingTel for the residents ofdonations to the Berkshire Community Foundation, St John’s Home for Elderly Persons. The charity drivewhich provides grants to local voluntary groups to included food and cash donations, as well as activitiessupport grassroots projects. These include schemes such as performances for, and birthday celebrationshelping young people with special needs, the disabled, with, the residents.the elderly and the homeless.Logicalis Southern Cone carried out severalcommunity oriented actions. In Argentina, a volunteerprogramme enabled several donations to rural schoolsin Entre Ríos province, to deaf-mute people via theASAM Foundation, to San José Providente (anassociation that develops childhood-related Logicalis Annual Review 2012
  28. 28. 26Board of Directors1. Jens Montanana 2. Ian Cook 3. Mark RogersChairman Chief Executive Officer Chief Operating OfficerJens is the founder of and chief architect behind Ian Cook is CEO of Logicalis Group. Since he Mark Rogers joined Logicalis in 2003 as FinanceDatatec, which he established in 1986, and also stepped into the role in March 2007, Logicalis Director for Logicalis UK, and in 2004 heChairman of Logicalis since March 2007. has become an international brand and a became Chief Financial Officer (CFO), EuropeanBetween 1989 and 1993, Jens served as respected partner of the major technology Operations. Since March 2007, he has taken onManaging Director and Vice-President of vendors. Ian has wide-ranging experience in the role of COO for Logicalis Group.US Robotics (UK), a wholly owned subsidiary the technology industry spanning more thanof US Robotics which was acquired by 3Com. 25 years. He joined Logicalis from Damovo Mark has extensive experience in theIn 1993, he co-founded US start-up Xedia where he had extensive involvement in its technology and service sectors both in the UKCorporation in Boston, MA, an early pioneer international operations as Chief Operating and internationally. He spent 20 years at Racalof network switching and one of the market Officer (COO). Electronics/Thales, of which 13 years were atleaders in IP bandwidth management, which Finance Director level within divisions providingwas subsequently sold to Lucent Corporation. Prior to Damovo, in 1990 Ian led the Board of Managed Network Services, Telecoms and Cablestream which became Siemens Network Survey, and Positioning Services. While atIn 1994, Jens became Chairman and Systems Ltd (SNSL) (now Affiniti), one of the Thales he was also Chairman of CitylinkChief Executive Officer (CEO) of Datatec which UK’s leading network integrators. Over a Telecommunications, a joint venture companylisted on the Johannesburg Stock Exchange 10-year period at SNSL he rose to Group which had secured a £1.2 billion, 20-yearin November 1994 and on the Alternative Managing Director responsible for operations Private Finance Initiative contract with LondonInvestment Market of the London Stock across Europe. Underground. Also, he has significant mergersExchange in 2006. Jens is Non-Executive and acquisitions experience, including the saleDirector of Versatile Systems, Inc., a Toronto- Ian Cook joined Logicalis as CEO, European of Racal Telecom to Global Crossing forand London-listed Canadian company. Operations in 2003 and became CEO of Logicalis £1 billion as well as experience in the acquisition Group in 2007. Since then Logicalis has changed and integration of smaller businesses. from acting as a Value Added Reseller for specific manufacturers to a broad-based IT solutions He started his finance career with Revlon provider with data centre assets on four where he qualified as a Chartered Management continents. Managed services cover all aspects Accountant. of IT business needs from simple remote monitoring to hosting and innovative cloud services such as Analytics-as-a-Service. 4 3 2 1LogicalisAnnual Review 2012
  29. 29. 274. Nigel Drakeford-Lewis Rob Evans Felipe LimaChief Financial Officer Non-Executive Director Non-Executive DirectorNigel Drakeford-Lewis is a Fellow of the Institute Rob has held a wide range of financial, Felipe Alceu Amoroso Lima is the Executiveof Chartered Accountants in England and Wales operational and M&A roles both within Director and CFO of Promon since April 2010.and also has an honours degree in Economics Datatec and other organisations internationally. In August 2011 he was appointed a Non-and Accountancy from Exeter University. Nigel Between 1996 and 2000, Rob was Datatec’s Executive Director of the Logicalis Board. Fromjoined Datatec in June 2000, initially to help UK Finance Director and then Group M&A 2005 to 2010, Felipe served as CFO and Boardbuild an advisory services division which was Director, during which time he worked on more Member for Votorantim Cement North Americasubsequently merged with Logicalis. He then than 20 acquisitions around the world. He (‘VCNA’) – a leading manufacturer of cementmoved across to Logicalis Group in November rejoined the Group in 2008, initially as an and supplier of building materials in the United2000 to focus on the reshaping of Logicalis integration and transformation executive with States and Canada, with responsibility for theGroup and help redefine its strategic direction. oversight for the Group’s emerging markets finance, legal and IT departments. VCNA is aSince April 2001, Nigel has been CFO of the operations in Africa, India and the Middle East subsidiary of the Brazilian-based GrupoGroup with responsibility for the financial (AIME). He then became Chief Operating Officer Votorantim, one of the largest conglomerates inmanagement and control of operations across of Westcon AIME. Since 2010 he has been Latin America.the Group. Head of the Consulting Services division, is on several of the Group’s subsidiary boards From 1996 to 2005, Felipe was with Citigroup,After qualifying as a Chartered Accountant with and is Chairman of Analysys Mason. as a Vice President for the Latin America DebtGrant Thornton, Nigel held senior financial Capital Markets in New York for six years. Priorpositions with Black & Decker, Grand Rob has previously held senior positions to Citigroup he served various roles atMetropolitan (now Diageo) and Dixons Group. with divisions of other listed groups including Unibanco, Promon Engenharia, Schlumberger,Prior to joining Datatec, Nigel worked for five Proudfoot and Data Translation. He began his and Caterpillar. Felipe Lima has a B.S. degree inyears as a senior consultant with Arthur D Little career qualifying as a Chartered Accountant Mechanical Engineering from Universidadeon strategy, corporate finance and performance with KPMG, where he worked in both London Estadual de Campinas.improvement assignments, primarily in the fixed and Melbourne.and mobile telecommunications sector. Logicalis Annual Review 2012
  30. 30. 28Financial overviewSouth America delivers Increased services mixvery strong performance Logicalis improved its services to product revenue mix with services now representing 25% of total revenues.The South America region had an exceptionally strongperformance, as telecommunication service providers continue Revenue from total services was up 36%, while strong growth into invest in their core infrastructures. The South America region annuity service revenues of 41% reflected the long-term strategicnow, for the first time represents Logicalis’ largest operation. focus on this segment of the business, with investments made in data centre and cloud-based services assets.The UK and US markets were more challenging but in theAsia Pacific market Logicalis had strong organic growth. The very robust product sales in South America drove an increase in service revenues.Revenue % geographic split Revenue % segmental split2012 2012 North America 31% Product 75% Latin/South America 36% Professional Services 9% UK 24% Maintenance and Germany 1% Managed Services 16% Asia Pacific 8%Revenue % geographic split Revenue % segmental split2011 2011 North America 34% Product 78% Latin/South America 28% Professional Services 9% UK 28% Maintenance and Germany 2% Managed Services 13% Asia Pacific 8%LogicalisAnnual Review 2012
  31. 31. 29Robust growth Stable gross marginsin Cisco solutions The strong increase in South American product sales resulted in slightly reduced gross margins in that region. The US reductionRevenue from product sales was up 13%, with strong increases was primarily as a result of lower rebates and professionalin the Cisco and HP vendor categories. services margins.The significant increase in Cisco sales, now representing over Europe’s margins were slightly down and Asia Pacific continueshalf of product revenues, was driven by the performance of the to generate very strong margins driven by a very good services mix.IT infrastructure business in South America. Logicalis has maintained relatively stable gross margins acrossRevenues from IBM equipment were down in the US and UK. the business in recent years.Most other vendors such as NetApp had revenue growth.Revenue % by vendor Gross margin %2012 2012 and 2011 IBM 19% UK FY 2012 Cisco 56% 18.2 FY 2011 HP 11% Others 14% 18.3 Germany 19.7 21.8 North America 23.4 24.6Revenue % by vendor2011 South America 22.7 IBM 30% Cisco 48% 23.2 HP 11% Others 11% Asia Pacific 30.4 31.6 Average 22.5 23.0 Logicalis Annual Review 2012

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