Knowledge is the key component of commercialadvantage in today’s competitive business environments.As complex technologies converge, companies seeklong-term relationships with trusted IT advisors.We don’t just know how to solve IT problems; weknow when our solutions will deliver the maximumimpact and, through our growing internationalpresence, we can meet our customers’ needs whereverin the world they may be.We work closely with our customers to understandtheir business drivers and turn ideas for performanceimprovements into real-life deployments of thelatest technologies.It’s about business and technology working as one.Contents01 Financial highlights02 Our growing global presence04 Chairman’s statement06 CEO’s review08 Know how10 Know when12 Know where14 Public and private sectors16 International operations18 Our corporate social responsibility20 Financial overview22 Board of Directors24 Financial results25 Our subsidiaries
FI NA NCI A LhIGhLIGhTS Sales EBITDA $ 841 5 million $42 million % of sales Net cash Annuity revenues up 87 17 $76.4 million % up $117.5 million %www.logicalis.com 01
OU r GrOW I NGGLOBALPrESENCEGlobal presenceLogicalis is a global ICT integrator withnearly 2,000 employees across four regions;Europe, North America, South Americaand Asia Pacific, supporting over 5,000corporate and public sector customers.Our business – a superior breadth of knowledge and expertise in integratedsolutions and services working with the world’s leading ICT vendorsCommunications and Collaboration Data Centre Professional and Managed ServicesLogicalis is a recognised leader in the Logicalis’ expertise in Data Centre solutions Logicalis’ experienced and certified specialistsdesign, implementation and support of helps organisations operate their data centres deliver a portfolio of full life-cycle services,highly integrated Communications and at peak efficiency, minimal cost and maximum backed by comprehensive Managed ServicesCollaboration solutions, with best-in-class effectiveness, and provides the environmental expertise. These encompass the voice andproducts from Cisco, IBM, Microsoft, Tandberg benefits required today. data infrastructure (fixed and mobile), data(now part of Cisco) and other leading vendors. centre, and applications found in today’s * Virtualisation and Consolidation enterprise ICT environments.* Voice and IP Telephony * Enterprise Computing* Network Infrastructure * Cloud Services * Consulting* Contact Centre * Storage * Application Integration and Development* Messaging * Hosting * Managed Services* Presence * Switching * Remote Monitoring and Management* Rich Media Conferencing * Security * Hosting* Collaborative Content/Web 2.0 * Co-location* Video * Managed Infrastructure Services* Security * Security02 Logicalis Annual review 2010
Our offices Europe North America South America Asia Pacific UK Scottsdale (Arizona) Brazil Australia Slough (HQ) Irvine, San Diego Belo Horizonte Sydney London (California) Brasília Melbourne Warrington Shelton (Connecticut) Manaus Brisbane Livingston Atlanta (Georgia) Rio de Janeiro Cardiff Lisle (Illinois) São Paulo Malaysia Indianapolis (Indiana) Cyberjaya Germany Waltham (Massachusetts) Argentina Kuala Lumpur Berlin Farmington Hills, Buenos Aires Córdoba Hong Kong Cologne Commerce Twp. (Michigan) Hong Kong Minneapolis (Minnesota) Rosário St Louis (Missouri) Chile China Bridgewater (New Jersey) Santiago Xiamen New York (NY) Shanghai Charlotte (N Carolina) Paraguay Suzhou Cincinnati, Dublin (Ohio) Asunción Houston, Plano, San Singapore Antonio (Texas) Peru Singapore Bellevue (Washington) Lima Taiwan Green Bay, Brookfield Uruguay Taipei (Wisconsin) Montevideo Kaohsiung Hsinchu Taichung New territory In January 2010, Logicalis increased its global footprint after acquiring NetStar, a leading IP network infrastructure services provider in Asia Pacific. Now fully integrated into the Logicalis Group, and rebranded as NetstarLogicalis, the regional operation’s network of offices spans Australia, China, Hong Kong, Malaysia, Singapore and Taiwan.Our partnersOur strategic technology partners:Cisco HP IBM MicrosoftLogicalis provides support Logicalis is one of HP’s Logicalis is a Premier IBM Logicalis is a Microsoftfor all aspects of the network highest accredited partners, Business Partner and also Gold Certified Partnerlife cycle and is a specialist supporting HP solutions from one of the only integrators with certifications in Portalsin key areas such as Unified Blade Server Virtualisation to support all IBM hardware and Collaboration, BusinessCommunications, Data through to large enterprise server platforms and their Intelligence, DataCentres, Wireless LANs, Data Centre total refresh complete range of middleware Management, UnifiedNetwork Security and Network projects. In 2010, Logicalis software and services. In Communications,Infrastructure. Logicalis was awarded HP’s Data 2010, Logicalis was awarded Infrastructure and Hosting.received 8 Cisco Partner Centre Specialist of the IBM’s Beacon Award forawards in 2010, including Year for UK and Ireland. the Outstanding PowerGlobal Partner of the Year Systems Solution for Majorfor Technical Excellence. Markets (USA).www.logicalis.com 03
Jens MontananaChairman, LogicalisCh A I r m A N ’SSTATEmENT Jens Montanana, Logicalis Chairman In markets worst hit by the economic slowdown, and Chief Executive of Datatec, commented: our UK operations still managed to post a very strong Logicalis delivered a sound financial and year end, and staff in our US operations have rallied operational performance in its 2010 fiscal year, hard to put that market’s inflection point firmly behind ending 28 February 2010. Strong operational cash them as activity picks up. generation and steady margins were the defining features of the company’s robust response to Trading in South America, meanwhile, remained tough trading conditions. strong throughout the year, in line with the Group’s expectations, while Logicalis gained an Asia Pacific As we have stated previously, the longer-term presence in January 2010, with the acquisition of and contractual nature of its customer relationships NetStar Group Holding Ltd (‘NetStar’). means that Logicalis’ experience of recovery tends to lag behind improvements in the overall economy Revenue was $840.6 million, including a $19 million by several months. However, we are confident that contribution from two acquisitions, Minters and NetStar, this recovery is now underway in many parts of the compared to $1,007.4 million in 2009. We saw world where we operate, despite the United Kingdom demand for technology products contract, and expecting to remain under pressure as reductions Logicalis’ main vendor partners, Cisco, HP and in public spending and the weaker pound weigh IBM, experienced double-digit declines in product on overall sentiment. revenues. In addition, telecommunication operators and services providers in South America, an I’m pleased to report that the second half of the important customer segment for Logicalis in this year was both sequentially better than the first half, region, cut capital expenditure significantly. and comparatively better than the second half of the 2009 financial year.04 Logicalis Annual review 2010
We are encouraged by the fact that revenues fromservices remained resilient and saw no significant Logicalis emerges from thisyear-on-year decline from 2009 levels, while annuityrevenues rose by 17%. difficult period as a stableOverall, effective cost management and increasingactivity towards the end of the year, combined with company in an excellentwell-maintained services margins and an improvedservices mix, helped Logicalis mitigate against the cash position.potential impact of recessionary conditions.Despite depressed demand for technology productsand spending cutbacks in many of the industriesin which we operate, Logicalis emerges from thisdifficult period as a stable company in an excellentcash position.www.logicalis.com 05
Ian CookChief Executive Officer, LogicalisChIEF EX ECUTIVE OFFICEr’SrEVIEWSetting The economic downturn It’s been a tough couple of years for companies Our markets Logicalis is rolling out a managed services portfoliothe scene worldwide. Like others, Logicalis experienced across all our markets. In every country that we a severe slow-down in business in the last quarter operate in, management’s goal is to reposition of 2008 across all of its markets, especially in the company from a reseller of ICT equipment to Europe and the USA. a broad-based ICT partner, offering a range of innovative services geared to customer requirements. Our response, I’m pleased to say, was swift and effective. By analysing our cost base and cutting While the provision of vendor-based infrastructure in areas where action could be taken, we were able systems remains at the heart of our business, to counteract the slowdown and protect profitability. we know that managed and professional services are the key to fostering deeper, more strategic At the same time, we have remained mindful relationships with our customers. of the need to prepare for economic recovery. Past experience shows that recessions tend to One trend that we have seen in all markets is that mark an inflection point; the business environment buying decisions are no longer made solely by IT that follows a recovery is often markedly different department personnel, but also by functional and from the pre-downturn environment. business-unit managers. For that reason, the Group has stayed closely At the same time, the boundaries that have committed to customer needs and market trends historically separated communications, computing during the turbulence of the past year. We have platforms and applications are increasingly blurring, accelerated organisational change and made leading to more complexity in decision-making. significant investments in the technologies and systems needed to drive further efficiencies and These issues are driving a need for Logicalis to to position ourselves in areas of emerging demand, engage with its customers on a business level, such as cloud computing and data centre services. understanding the issues that they face and designing, implementing and managing the Our three-fold focus on efficiency gains, investment solutions to overcome them. in systems and market-driven opportunities will ensure that Logicalis emerges from the global Our approach of focusing on communications downturn in a strong position. and collaboration, data centre and managed services has been key to our customer engagement strategy. Operating at all levels – up to and including Board level – we can offer business-led, technical solutions and services that move us from a position of ICT infrastructure provider to strategic ICT partner. All our markets are aligned with this model and a measure of our success is the 17% increase in annuity service revenues in the past year.06 Logicalis Annual review 2010
Building a strong business Our expansion plans remain ambitious. South America and Asia Pacific are areas 2010Building a strong, profitable company, with growth of opportunity for acquisitive growth in regions achievementsin excess of the prevailing market rates and with of the world where rising IT investment will deliverworld-class customer satisfaction ratings, remains the greatest opportunities. In our established Our January 2010 acquisitionour goal in the year ahead. markets, we will continue to enhance our service of the NetStar business in offerings by investing in people and systems, Asia Pacific, which has broughtWe know that every Logicalis customer is different. as well as exploring acquisitions that will boost the Logicalis name and brandingWe serve organisations of varying sizes across our managed services portfolio. to operations in Australia,a range of geographies and industry sectors, Singapore, Taiwan, Hong Kong,including enterprise organisations, mid-market While early signs of economic recovery in all our China and Malaysia.commercial clients, telecom service providers markets are encouraging, we must remain vigilant.and public sector bodies. But our approach That means identifying new opportunities, finding Prestigious partner awardsto doing business with every customer is the new efficiencies within our business and aligning from Cisco, HP and IBM, insame: listening closely, so that we understand ourselves with those market segments that show recognition of our significanttheir individual issues and concerns. the greatest growth potential. We will continue to contribution in a range of core focus on increasing the service proportion of our technology disciplines overIt’s only then that we will put our technical revenue to ensure that our margins are stable and the past year.architects and service personnel to work on the sustainable going forward.solution; we continue to invest heavily in our people Significant investment inand their training – in order to tackle customers’ TelePresence suites in London,challenges with the very best in innovative and São Paulo, Buenos Aires andbest-practice thinking. Michigan, which are enabling Logicalis teams worldwideWhen it comes to working with vendors, to share key expertise andengagement is equally key. Local management knowledge for the benefitacross all our markets are encouraged to forge of customers.relationships with their vendor-based counterpartsat all levels, enabling us to take the most innovative The opening of a new,joint propositions to market. next-generation, high-density data centre in Slough, UK,As we look ahead, our healthy balance sheet and which will provide Logicalisstrong cash position will enable the Logicalis Group customers with the veryto continue to invest in systems and people, which latest in made-to-measurewill position the business for long-term growth. hosted, managed and cloud computing services.www.logicalis.com 07
K NOWhOWAt a time when it’s never been moreimportant for organisations to embraceefficiency and stay ahead of the competition, We have proven ways to transform organisations with the latest advanced technologies and new deployment methods,a key organisational challenge for many from cloud computing to collaborativeis choosing a partner they can trust for working. Our key partners have honoured usadvice on which technologies, vendors and with numerous awards, in recognition of ourdeployment methods will best support their ability to deliver innovation to the market andICT requirements, both now and for the help customers achieve higher value andlong term. better business outcomes.By focusing on its key business areas, It’s our deep engagement with ourLogicalis can offer a wealth of real-world customers that helps us build an ever-strongerexperience in Communications and understanding of what is needed to helpCollaboration; the Data Centre; and them achieve true business value and trueProfessional and Managed Services. business transformation. Our goal is to help them understand what’s possible today, so that they make the best business and technology decisions, now and in the future.08 Logicalis Annual review 2010
Data Centres and Cloud Computing With its promises of elastic scalability, increased efficiency and reduced operational expenditure, it’s no wonder that businesses are rushing to the cloud. It’s where the corporate data centre meets a whole new world of high-availability, pay-on- demand services. But in order to reap the benefits of private, community and ‘co-operative hybrid’ cloud infrastructures, many organisations will require expert advice and support. At Logicalis, our proven track record in advanced data centre virtualisation and managed services is helping our clients turn cloud hype into cloud reality. Highlights: * Logicalis holds Cisco’s Unified Computing System (UCS) certification across all its regions to design, integrate and support data centre infrastructures for its clients. * We have invested in new Data Centres offering Enterprise Cooperative Cloud Services in the UK and US.www.logicalis.com 09
Communications and Logicalis has achieved Collaboration Cisco’s Master Accreditation for Unified Communications In a world where delayed decision- for Europe, North and South making robs a company of time, America, as well as Authorised money and competitive edge, Technology Partner (ATP) in staying in touch has never been Cisco TelePresence. more important. Our applications of innovative and collaborative working techniques span fixed and mobile telephony, contact centres, messaging and the latest rich-media conferencing systems, enabling them to work together seamlessly in even the most complex multi-vendor environments. Professional and Managed Services Sometimes, being free to focus on what makes your business unique means knowing when to let go of non-core operations. Logicalis has over 20 years of experience in monitoring and managing IT systems on our clients’ behalf, according to the latest Information Technology Infrastructure Library (ITIL) best practice. Logicalis offers a range of Professional Services from Project Services, Consultancy and Applications Services as well as an extensive portfolio of managed services via its 24/7 Managed Services Operation Centres, located in the USA, UK, Argentina, Brazil and Malaysia.a Logicalis Annual review 2010
HOW can your organisation deploy the right technologies to deliver maximum value and transformation?LOGICALIS KNOWS.
K NOWWhENOur Approach CollaborationIt’s all in the timing. When Logicalis develops a technologyAs the economic recovery gathers pace, roadmap and strategy for your business,companies are once again looking to you can be sure that it will be based onresume their investments in enterprise input from key stakeholders from acrossIT. But smart companies are interested the organisation: sales and marketing,only in those technologies that will deliver finance, human resources, manufacturingmaximum competitive advantage and and distribution. It’s only by understandinggenerate the fastest return on investment their current challenges that we can help(ROI). At Logicalis, we make it our business your business create future opportunities.to know which technologies will get yourbusiness where it wants to go, in the Increasing Competitive Advantagefastest timescale possible. As companies continue to accelerate out of the downturn, it’s never been more important to be the first to identify and address every opportunity that presents itself. At Logicalis, we aim to help you cross the finishing line before your competitors do.10 Logicalis Annual review 2010
Welsh Assembly Government In 2007, the Welsh Assembly Government, Wales being one of the four countries that makes up the United Kingdom, appointed Logicalis as their strategic partner to design, build and manage a unique communications service that will ultimately connect up to 10,000 public sector sites within Wales. Initially connecting over 1,000 sites within healthcare, local government, and higher education, the network is growing rapidly, and new organisations, including blue light emergency services, are now using this world-leading public sector communications service to lower the total cost of government communications in Wales and enable the country to move into a new era of shared public services. Built on Cisco Borderless Networks platforms and managed by solutions from CA Technologies, the seven-year Public Sector Broadband Aggregation (PSBA) contract is a flagship government project for Logicalis. Working closely with the Welsh Assembly Government, Logicalis is proud to be a partner in creating public sector service innovation in Wales.www.logicalis.com 11
ValassisMichigan-based Valassis is a leading global organisationoffering media and marketing services to more than15,000 advertisers.Through a series of mergers and acquisitions andchanging business requirements, the proliferationof data centres at Valassis was creating problems:spiralling costs, inefficiencies and the risks of a disparateIT configuration. Valassis needed an expert partner tohelp evaluate requirements, options and technology andone that could understand future business requirements.After a thorough evaluation of Valassis’ existing ITinfrastructure, Logicalis was able to develop a deepunderstanding of present and future requirementsin order to apply its innovative thinking to developingthe right environment.Logicalis has consolidated Valassis’ data centre intoa re-engineered and redesigned dynamic environment.This critical and complex operation set Valassis up toimprove efficiencies, cope with future requirementsand realise annualised cost savings of around$4.5 million in 2008.
WHEN is the timing right for your organisationto invest in new systems that will generate the fastest returns?LOGICALIS KNOWS.
K NOWWhErEFocusing on new markets can work closely together in virtual teams, sharing their knowledge and expertise,As globalisation continues to advance, across geographies and time zones.businesses of all sizes increasingly find It’s all about an organisation ‘workingthemselves working across regional, national as one’ – regardless of the physical locationand international networks of colleagues, of individual team members.customers, suppliers and partners. From the companies we speak to, we knowThat’s true for Logicalis and it’s almost that many other organisations share ourcertainly true for your organisation, too. goal. Using technology to achieve improvedIn the past few years, we have significantly collaboration, efficiency and productivity isexpanded our geographic footprint, most a major priority for many, as is lowering therecently with acquisitions in Germany operational costs and environmental impact(Minters) and Asia Pacific (NetStar). associated with business travel. Today’sAt Logicalis, we believe that increased technology is helping us – and them – toglobalisation calls for increased collaboration, achieve these targets.so that employees and business partnerswww.logicalis.com12 Logicalis Annual review 2010 12
NetStar acquisition With the December 2009 announcement that Logicalis was to buy NetStar, the leading IP network services provider in Asia Pacific, we embarked on an exciting journey to open up new market opportunities in some of the world’s fastest growing economies. With three main units in Australia, Singapore and Taiwan and further operations in Malaysia, Hong Kong and China, NetStar boasted an impressive roll call of over 800 customers across Asia Pacific, including some of the largest IP networks in Australia. The skills of NetStar’s 300 staff were a major attraction, too, with strong Cisco network integration and data centre skills and major infrastructure-as-a-service (IaaS) clients including SingTel. We have been delighted to welcome this talented workforce into the wider Logicalis Group.www.logicalis.com13 Logicalis Annual review 2010 13
TelePresence: an immersive experienceFor participants in a TelePresence session, it’s surprisinglyeasy to forget that they’re not in the same room – or eventhe same country – as the people they’re ‘meeting’. Life-sized images of other attendees, full eye contact and spatialsound are just some of the ways that the illusion is created.It’s turbo-charged videoconferencing that brings virtualmeetings to life.Our TelePresence methodology is designed to bringcustomers all the benefits of the immersive, face-to-facemeeting experience that this technology offers – and we’reusing it internally, too, with TelePresence suites in four citiesworldwide: London, São Paulo, Buenos Aires andFarmington Hills, Michigan.
WHERE can technology help to bridge the geographic distances that standbetween your organisation’s employees, its partners and its suppliers? LOGICALIS KNOWS WHERE.
BUSI N E SS K NOW-hOW ACrOSSPUBLIC &Pr I VAT ESEC TOr SLogicalis can help transform organisations We provide consultation andwith an infrastructure that supports services to both public and privateinnovative, collaborative applications sector organisations such asand improves business agility. We make education, financial services, health,it easier for our customers to share skills local government, manufacturing,and knowledge, to make fast decisions distribution, retail and media.and move swiftly to exploit change.www.logicalis.com14 Logicalis Annual review 2010 14
Education – Higher education institutions Government – Logicalis provides local and Health – GE Healthcare (UK), University worldwide rely on Logicalis to provide the central government organisations around the Hospital Bonn (Germany) and Hospital de innovative technology needed by students, world with the secure, compliant infrastructure Pediatría S.A.M.I.C. (Argentina) are among faculty and support staff to achieve excellence solutions they need to deliver a wide range of a growing number of healthcare organisations in learning and research. These include innovative, efficient services to citizens. that trust Logicalis to provide the ICT Nottingham Trent University (UK), Swinburne infrastructure that is now critical to the delivery University (Australia) and the Universidad of high-quality patient information and optimal Argentina de la Empresa (Argentina). medical outcomes. Financial Services – Logicalis provides ICT Manufacturing – Logicalis has helped solutions and services to some of the world’s most streamline supply chains, increase productivity respected retail and private banking institutions and eliminate downtime for manufacturing and hedge funds. Santander relies on Logicalis organisations of all sizes and in many different for the provision of infrastructure support across areas of the world, including Mercury Marine its operations in Brazil, Argentina, Chile, Uruguay, (USA), ABB (Australia, China and Germany) Germany and the UK. In Asia Pacific, Logicalis and Ambev (South America). works with Taishin Bank and SKL in Taiwan.www.logicalis.com15 Logicalis Annual review 2010 15
I N T E r NAT IONA LOPErATIONS North America South America Headquartered in Farmington Hills, Michigan, Logicalis US Logicalis’ South American operation has its main offices in has more than 20 regional offices and around 500 employees São Paulo (Brazil) and Buenos Aires (Argentina) and employs supporting the full spectrum of ICT solutions. 550 staff. The company also has a local presence in Chile, Paraguay, Peru and Uruguay. The company has a broad portfolio of communications and enterprise computing solutions through its equal standing The company is now the largest independent integrator for Cisco partnerships with Cisco, HP and IBM. Its recent focus has throughout the region and a major supplier to the leading telecoms been on augmenting its services business and, in particular, providers. Special acknowledgement goes to Logicalis in South its Enterprise Cloud Computing services offering. America for winning six Cisco Partner awards this year, including Global Technology Excellence Partner of the Year, in recognition Today, around 30% of the company’s employees are engaged of its significant expertise in the delivery of Cisco solutions and services. in services roles applying their specialist expertise in Professional and Managed Services. Logicalis South America will continue to leverage its recognised expertise in data centre solutions and is developing its managed services capability across the region. Awards Awards * IBM’s 2010 Beacon Award * Cisco Global Technology for the Outstanding Power Excellence Partner of the Systems Solution for Major Year (Emerging Markets) Markets category * Cisco Technology Enterprise Partner of the Year – Virtualisation (LATAM – Emerging West) * Cisco Enterprise Partner of the Year (LATAM – Emerging West) * Cisco Technology Percentage contribution Percentage contribution Excellence Partner of to Group revenue to Group revenue Percentage contribution to Group revenue 40% 23% Percentage contribution to Group revenue the Year – Virtualisation 40% 23% (Brazil – Emerging West) * Cisco Service Provider Headcount Headcount Partner of the Year – 500 550 (Brazil – Emerging West) * Cisco Enterprise Partner of the Year (Emerging West – Southern Cone) employees employees16 Logicalis Annual review 2010
Europe Asia Pacific Logicalis has its headquarters in Slough, UK with local offices In January 2010, Logicalis acquired NetStar, a leading IP network in the UK and Germany employing 480 staff. The UK operation, services provider in Asia Pacific with capabilities and expertise with offices in Slough, London, Warrington, Cardiff and Livingston, across data, voice and security infrastructure. Now fully integrated has adopted a hybrid sales approach to delivering multi-vendor into the Logicalis Group, and rebranded as NetstarLogicalis, the integrated solutions across IBM, Cisco, HP, Microsoft and other company has three main units centred in Australia, Singapore and complementary technologies, and has a rich services offering Taiwan, with further operations in Malaysia, Hong Kong and China. with major investment in its Managed Services and Data Centre facilities. NetStar’s network of offices across the Asia Pacific region, combined with its primary Network Operations Centre in Malaysia, With its headquarters in Cologne, Logicalis Germany has has the facilities to support the needs of multinational corporations, a strong presence in both the North Rhein Westphalia (the largest and currently services over 800 customers across the Asia Pacific economic area in Germany by GDP) and the Berlin markets. The region, including some of the largest IP networks in Australia. company is very important strategically to Logicalis for its ability to target new business opportunities within the Euro zone. This will be a key focus region for Logicalis to invest and increase its activities. Awards * Cisco European Data Centre and Virtualisation Partner of the Year * Cisco Data Centre and Virtualisation Partner of the Year – (UK&I) * HP Data Centre Specialist of the Year (UK&I) Percentage contribution Percentage contribution to Group revenue to Group revenue Percentage contribution to Group revenue 1%(represents six weeks trading only – 1% (represents six weeks’ trading 36% Percentage contribution to Group revenue 36% only – 16 Jan 2010 to 28 Feb 2010) 16 January 2010 – 28 February 2010) Headcount Headcount 480 employees 300 employeeswww.logicalis.com 17
OU rCOrPOrATESOCIAL r E SPONSI BI L I T yLogicalis’ policy is to actively and enthusiasticallysupport the welfare of its people, the environmentand local communities wherever we have a presence. Our People As an early adopter of Green ICT ideas and activities, 01 Logicalis aims to be an employer of choice; Logicalis recognises that a responsible attitude to attracting, developing and retaining the best people. Green ICT can lead to significant reductions in energy Our personnel practices ensure that every employee, consumption and carbon emissions. As well as wherever they work, whatever their role, is treated reducing greenhouse gases and operational costs, equally, fairly and respectfully at all times. Adherence the technologies we promote, such as remote working to international health and safety standards ensures and video and teleconferencing, enable more flexible that our people are properly protected and cared for, working, greater productivity and improved business wherever they operate. continuity. Green ICT is good for the planet and it’s good for business. Logicalis maintains consistent and transparent 02 diversity policies across all our markets. We firmly Community believe that career opportunity, recognition and Logicalis encourages our operating companies in reward should be determined by a person’s every territory to create initiatives that help improve the capabilities and achievement, not their age, sex, race, quality of life for their local communities. Here are just religion or nationality. Wherever we operate, Logicalis a few highlights: strives to maintain a workforce that reflects the skills, ethnicity and demographics of the local population. During the 2009 holiday season, Logicalis US donated $25,000 to 32 charities in communities where its Logicalis recognises that it is the ideas, skills and employees work and live. Their support of these local01 Arizona Animal Welfare capabilities of our people that drives our development charities made a big difference. They also continued02 Gleaners Food Bank and growth. In return, Logicalis will invest in whatever to make donations to Big Brothers, Big Sisters of03 Asylo João Evangelista training and resources our people need to ensure that Metropolitan Detroit.04 CCA Santa Teresa de Jesus05 Pump Aid they are able to develop and grow with us. In addition, Logicalis US has a ‘Give Back to Environment the Community’ programme through which each As a responsible international provider of ICT solutions, employee is allowed to take off eight hours of work Logicalis seeks to measure and minimise the way in time each year to support charities of their choice. which any of our commercial activities may impact Logicalis US utilises VolunteerMatch to track employee the environment. We are also committed to providing volunteer hours (in excess of 4,000 since April 2008), practical advice and support to our customers and celebrate individual and group volunteer efforts, and suppliers to help them along the path to ever cleaner provide access to thousands of volunteer opportunities and greener ICT solutions. in local communities.18 Logicalis Annual review 2010
For the fourth year in succession, Logicalis UK made In Brazil, PromonLogicalis continues to support 03 donations to the Berkshire Community Foundation Junior Achievement, an organisation that teaches which provides grants to local voluntary groups to children about work readiness and entrepreneurship. support grassroots projects. These include young A new programme was also established last year – people with special needs, the disabled, the elderly the PromonLogicalis Volunteer Programme, providing and the homeless. education, work readiness, and social movements to children in the communities of São Paulo and Rio de Logicalis UK also changed its drinking water supplier Janeiro, supported through the following charities: and, in doing so, is now sponsoring Pump Aid, a Ação Comunitária, Asylo João Evangelista, CAMP charity that provides access to clean drinking water Vila Isabel, CCA Santa Teresa de Jesus, Gotas de and safe, adequate sanitation to those in need in Flor com Amor and Lar Escola Recanto Cristão. 04 Zimbabwe, Malawi and Liberia. Another of these charities associated with the Logicalis Southern Cone in South America participates programme is Ser Cidadão, which provides vocational in a recycling programme to support the Foundation of education for adolescents and young adults from Garrahan Hospital in Argentina, focused on complex poor communities. Formally set up four years ago, treatments for children. The programme consists of the association has a 20-year history grounded in office collections of disposable paper and plastic caps, the activities developed by the Educação de Trabalho to be donated to the Foundation for recycling. (Education for Work) programme. Another ecological initiative was the participation 05 in the ‘A todo pulmón’ campaign in Paraguay. Logicalis employees committed to planting a tree to support the environment. They also contributed to local community organisations which help children, such as A.D.A.N.D. and San Jose Providente; and made a donation to EGB Nº98 School, which needed technological equipment to develop a project for the improvement of writing and reading skills.www.logicalis.com 19
FI NA NCI A LOVErVIEWExpansion of geographic footprint Revenue percentage geographical split Revenue percentage geographical splitThe acquisition of NetStar in the Asia Pacific 2009 2010 2 2region in January 2010, centred in Australia,Singapore and Taiwan, with operations also inMalaysia, Hong Kong and China, establishesan Asia Pacific footprint for Logicalis andprovides the capabilities to support the needs 1of multinational customers in the region. 1 3 4 3 4 5 1 North America 40% 1 North America 40% 2 South America 28% 2 South America 23% 3 UK 31% 3 UK 34% 4 Germany 1% 4 Germany 2% 5 Asia Pacific 1% (acquired January 2010)Increased services Revenue segmental split Revenue segmental splitLogicalis increased its annuity business in 2009 2010the 2010 financial year by 17%. Maintenance, 1 1Professional and Managed Services nowequate to 23% of revenues, and continued 2 2growth is expected in the annuity-basedmanaged services portfolio with the launchof our cloud services solutions. 3 3 1 Product 81% 1 Product 77% 2 Professional Services 9% 2 Professional Services 9% 3 Maintenance and Managed Services 10% 3 Maintenance and Managed Services 14% 23% Services business providing consulting, design and integration, support, hosting and managed services.20 Logicalis Annual review 2010
Balanced vendor partner mix Revenue product vendor mix percentage Revenue product vendor mix percentageWith the 2009 financial year boosted by 2009 2010 2 2an extraordinarily large Cisco project for 3 3a telecommunications company, the 2010financial year performance provided amore balanced split of vendor sales acrossthe Group. 4 4 1 1 1 IBM 27% 1 IBM 31% 2 Cisco 44% 2 Cisco 40% 3 Others 12% 3 Others 11% 4 HP 17% 4 HP 18%Gross margins remained steady at 22% Gross margin percentageDespite product margins being under pressure, 35.1particularly in the USA for both HP and IBMproducts, the improved services mix kept the 28.1 28.7overall margin similar to last year. 24.4 21.3 22.1 22.2 20.4 20.6 18.3 18.6 UK Germany North America South America Asia Pacific Total 2009 2010www.logicalis.com 21
BOA r D OFDIrECTOrS Jens Montanana Ian Cook Chairman Chief Executive Officer Jens is the founder and chief architect behind Ian Cook joined Logicalis as CEO, European Datatec, which he established in 1986, and also Operations in 2003 and became CEO of Logicalis Chairman of Logicalis since March 2007. Between Group in March 2007. Since then, Logicalis has 1989 and 1993, Jens served as Managing Director become an international brand and a respected and Vice-President of US Robotics (UK), a wholly partner of the major technology vendors. owned subsidiary of US Robotics which was acquired by 3Com. In 1993, he co-founded US Ian has extensive experience in the technology start-up Xedia Corporation in Boston, MA, an early industry spanning more than 25 years. He joined pioneer of network switching and one of the market Logicalis from Damovo where he had extensive leaders in IP bandwidth management, which was involvement in international operations as Chief subsequently sold to Lucent Corporation. In 1994, Operating Officer (COO). Jens became Chairman and Chief Executive Officer Prior to Damovo in 1990, Ian led the Board of (CEO) of Datatec which listed on the Johannesburg Cablestream which became Siemens Network Stock Exchange in November 1994 and on the Systems Ltd (now Affiniti), one of the UK’s leading Alternative Investment Market of the London Stock network integrators. Over a 10-year period at SNSL, Exchange in 2006. Jens is Non-Executive Director of he rose to Group Managing Director responsible for Versatile Systems, Inc. a Toronto and London listed operations across Europe. Previously, he was Sales Canadian company. and Marketing Director at Case Communications Ltd, a manufacturer of data communications equipment with operations in the UK, USA and Asia Pacific.22 Logicalis Annual review 2010
Mark Rogers Nigel Drakeford-Lewis Ivan DittrichChief Operating Officer Chief Financial Officer Non-Executive Director Ivan is a Chartered Accountant andMark Rogers joined Logicalis in 2003 as Finance Nigel Drakeford-Lewis is a Fellow of the Institute of has been with Datatec for the pastDirector for Logicalis UK, and in 2004 he became Chartered Accountants in England and Wales and 10 years. He was appointed asChief Financial Officer (CFO), European Operations. also has an honours degree in Economics and Non-Executive Director to the Logicalis Board on 22 April 2008, and laterSince March 2007, he has taken on the role of COO Accountancy from Exeter University. Nigel joined became Datatec’s Group Financefor Logicalis Group. Datatec in June 2000, initially to help build an Director on 1 May 2008. Previously, advisory services division which was subsequently he was Group Corporate DirectorMark has extensive experience in the technology and Group Company Secretary merged with Logicalis. He then moved across to of Datatec for five years, as well asand service sectors both in the UK and internationally. Logicalis Group in November 2000 to focus on the Corporate Finance Manager. IvanHe spent 20 years at Racal Electronics/Thales of reshaping of Logicalis Group and help redefine successfully managed the Group’swhich 13 years were at Finance Director level within its strategic direction. Since April 2001, Nigel has dual listing in London during 2006.divisions providing Managed Network Services, Prior to joining Datatec, Ivan worked been CFO of the Group with responsibility for the for PriceWaterhouseCoopersTelecoms and Survey, and Positioning Services. financial management and control of the operations in London.While at Thales he was also Chairman of Citylink across 15 countries.Telecommunications, a joint venture company which Luiz Fernando T. Rudge Non-Executive Directorhad secured a £1.2 billion, 20-year Private Finance After qualifying as a Chartered Accountant with Grant Luiz Rudge is Executive Director/Initiative contract with London Underground. Also, Thornton, Nigel held senior financial positions with CFO and a member of the Board ofhe has significant mergers and acquisitions (MA) Black Decker, Grand Metropolitan (now Diageo) Directors of Promon SA. Following theexperience, including the sale of Racal Telecom to and Dixons Group. Prior to joining Datatec, Nigel acquisition by Logicalis of a majority stake in Promon Tecnologia in MayGlobal Crossing for £1 billion as well as experience in worked for five years as a senior consultant with 2008, Luiz then became Non-Executivethe acquisition and integration of smaller businesses. Arthur D Little on strategy, corporate finance and Director on the Logicalis Board. performance improvement assignments, primarilyHe started his finance career with Revlon where he He joined Promon SA in 1982 and in the fixed and mobile telecommunications sector. served as Treasurer (1987–1991) andqualified as a Chartered Management Accountant. Finance Director (1991–2001), when he was elected to his current position. He led several corporate finance deals on behalf of Promon, including MA transactions as well as financing arrangements to support Promon’s proprietary investments and its contracts with clients. Prior to joining Promon and in 1986/1987, Luiz was engaged in foreign trade activities. Luiz holds a BA degree in Business Administration from Fundação Getulio Vargas (FGV/São Paulo), he also completed the M.A. programme in Geography (Urban Development) of the University College/University of London and the Advanced Management Program of the Harvard Business School.www.logicalis.com 23
FI NA NCI A LrESULTSIncome statement – unaudited 2010 2009 US$m US$mRevenue 840.6 1,007.4Cost of sales (654.2) (785.7)Gross profit 186.4 221.7Administrative expenses (144.0) (164.6)EBITDA 42.4 57.1Depreciation of property, plant and equipment (5.9) (5.3)Amortisation of intangible fixed assets (11.3) (12.3)Operating profit 25.2 39.5Net finance costs (3.3) (5.7)Datatec management fees (2.8) (3.5)Impairment of goodwill – (20.9)Revaluation of minority interest buy-out liability (10.4) 13.7Profit before tax 8.7 23.1Tax on profit on ordinary activities (5.2) (14.6)Profit for the year for continuing operations 3.5 8.5Profit from discontinued operations – 10.3Profit for the year 3.5 18.8Balance sheet – unaudited 2010 2009 US$m US$mGoodwill and other intangible assets 154.0 139.6Property, plant and equipment 29.4 13.6Deferred tax asset 15.3 11.9Total non-current assets 198.7 165.1Inventories 33.7 20.0Trade and other receivables 254.9 202.4Cash and cash equivalents 82.8 40.9Total current assets 371.4 263.3Total assets 570.1 428.4Trade and other payables (299.1) (213.8)Bank overdrafts and loans (6.1) 0.0Deferred consideration on acquisition of subsidiaries (14.2) (11.4)Total current liabilities (319.4) (225.2)Net current assets 52.0 38.1Amounts owed to holding company and fellow subsidiaries (47.1) (31.3)Obligations under finance leases (5.5) (7.7)Liability for minority interest buy-out (32.6) (22.2)Deferred consideration on acquisition of subsidiaries 0.0 (11.5)Deferred tax liabilities (15.8) (10.7)Other long term liabilities (7.8) (1.1)Total non-current liabilities (108.8) (84.5)Total liabilities (428.2) (309.7)Net assets 141.9 118.7Share capital and share premium 130.2 130.2Minority interest buy-out reserve (32.6) (22.2)Foreign currency exchange and other non-distributable reserves (35.4) (49.1)Retained earnings 52.2 39.6Attributable to equity holders of the parent 114.4 98.5Minority interest 27.5 20.2Total equity 141.9 118.724 Logicalis Annual review 2010
OU rSUBSIDIArIES Percentage heldStatutory name Country of Incorp. 2010 2009Holding companyLogicalis Group Limited England and Wales 100% 100%Subsidiaries of Logicalis Group LimitedLogicalis Group Services Limited England and Wales 100% 100%Logicalis UK Limited England and Wales 100% 100%Promon-Logicalis Latin America Limited England and Wales 70% 70%Logicalis Limited England and Wales 100% 100%Logical Group Limited England and Wales 100% 100%Satelcom Limited (dormant) England and Wales 100% 100%Logicalis Computing Solutions Ltd (dormant) England and Wales 100% 100%Hawke Systems Ltd (dormant) England and Wales 100% 100%T.B.C. Group Limited (dormant) England and Wales 100% 100%TBC Limited (dormant)* England and Wales 100% 100%Logicalis Computing Solutions Finance Limited (dormant)* England and Wales 100% 100%Logicalis (Ireland) Limited Ireland 100% 100%Logicalis GmbH* Germany 100% N/ALogicalis Deutschland GmbH Germany 100% 100%Logicalis Networks GmbH* Germany 100% 100%Logicalis (US) Holdings, Inc. USA 100% 100%Logicalis, Inc.* USA 100% 100%ActiveSymbols, Inc. USA N/A 100%Logicalis South America Inc.* USA 70% 70%PromonLogicalis Tecnologia e Participacoes Ltda* Brazil 70% 70%PTLS Comercio, Exportacao e Importacao de Equipamentos de Telecommunicacao Ltda* Brazil 70% 70%PLLAL International LLC* Brazil 70% 70%Logicalis Brasil Servicos de Assessoria Tecnica Ltda* Brazil 70% 70%Logicalis Argentina S.A.* Argentina 70% 70%X-Net Cuyo S.A.* Argentina 70% 70%Logicalis Uruguay S.A.* Uruguay 70% 70%Logicalis Inc. S.A.* Uruguay 70% 70%Logicalis Paraguay S.A.* Paraguay 70% 70%Logicalis Chile S.A.* Chile 70% 70%Logicalis Andina S.A.C.* Peru 70% 70%NetStar Group Holding Limited British Virgin Islands 100% N/ANetStar Australia Holding (BVI) Limited (dormant)* British Virgin Islands 100% N/ANetStar Asia Holding (BVI) Limited (dormant)* British Virgin Islands 100% N/ANetstarLogicalis Australia Pty Limited* Australia 100% N/AnVisage GNC Malaysia Sdn Bhd* Malaysia 100% N/ANetstarLogicalis Malaysia Sdn Bhd* Malaysia 100% N/ANetstarLogicalis Singapore Pte Limited* Singapore 100% N/ANetstarLogicalis Shanghai Limited* China 100% N/ANetstarLogicalis Xiamen Limited* China 100% N/ANetstarLogicalis Hong Kong Limited* Hong Kong 100% N/ANote: * indicates a subsidiary which is owned indirectly via an intermediate holding company.www.logicalis.com 25
Logicalis Group110 Buckingham AvenueSloughBerkshireSL1 4PFTel: +44 (0)1753 777 200 www.logicalis.comThis brochure has been printed in the UK, our printers areEnvironmental Management System ISO 14001 accreditedand Forest Stewardship Council (FSC) chain of custodycertified. All inks are vegetable based.Designed and produced by The College www.thecollege.uk.com