Annual Review 2009: Logicalis Delivers Strong Growth and Record Profits

Annual Review 2009

PROVEN

EXPERIENCE
ADDING

VALUE

Organisations looking to transform their business to deal
with the challenges and opportunities of the 21st century
need to get smarter, leaner and faster.
Successful companies will boost productivity through seamless
communications and collaboration, lowering operating costs
in their data centre and making smart use of managed services,
so that they can focus in-house IT resources on areas of true
strategic advantage.
Logicalis has the expertise, innovative approach and business
tools to help organisations optimise their IT investments.
It’s about business and technology working as one.

Contents
01 Financial highlights
02 Our world
04 Chairman’s statement
06 CEO’s review
08 Board of Directors
10 Our strategy
12 Our business
18 International operations
20 Our corporate social responsibility
22 Financial overview
24 Financial results
Ibc Our subsidiaries

FINANCIAL
HIGHLIGHTS

EBITDA increased by Total sales increased to

62 1bn %
to $56.9 million (2008: $35.1 million)
$
by 21% (2008: $830 million)
Note: Excluding acquisitions; organic growth
was 2% on a constant currency basis

Operating proﬁt increased by Gross margin increased by

57 18
% %
to $39.3 million (2008: $25.1 million) to $221.7 million (2008: $187.3 million)

www.logicalis.com 01

Logicalis is an international provider of integrated information and communication
technology (ICT) solutions and services founded on a superior breadth of knowledge
and expertise, resulting in greater business benefits for its customers.
Our business model is built around helping our customers use technology to
embrace, support and drive their strategic business processes.We help them manage
complexity to meet business challenges with advanced skills, world-class products
and proven experience.
Headquartered in the UK, Logicalis Group was formed in 1997 when Datatec
acquired Logical Networks plc; a UK based networking integrator that had been
operating since 1988. Datatec then embarked on a strategy to expand and globalise
its business. By the year 2000, Datatec had acquired more than 20 IT integration
and services companies operating throughout Europe, North and South America
and Australasia.
Today, Logicalis Group is a $1billion business with over 1,600 employees and
more than 5,000 commercial and public sector customers worldwide.

INTERNATIONALLY

DIVERSE
We provide...
Communications and Collaboration Data Centre Professional and Managed Services
Logicalis is a recognised leader in the Logicalis’ expertise in Data Centre solutions Logicalis’ experienced and certified specialists
design, implementation and support of helps organisations operate their data centres at deliver a portfolio of full lifecycle management
highly integrated Communications and the peak efficiency, minimal cost, and maximum services, backed by comprehensive Managed
Collaboration solutions, with best-in-class effectiveness, and provides the environmental Services expertise. These encompass the
products from Cisco, IBM, Microsoft, benefits required today. voice and data infrastructure (fixed and
Tandberg and other leading vendors. mobile), data centre, and applications found
* Virtualisation and Consolidation in today’s enterprise ICT environments.
* Voice & IP Telephony * Enterprise Computing
* Contact Centre * Storage * Consulting
* Messaging * Cloud Solutions * Application Integration & Development
* Presence * Hosting * Managed Services
* Rich Media Conferencing * Switching * Remote Monitoring & Management
* Collaborative Content/Web 2.0 * Security * Hosting
* Video * Co-location
* Security * Managed Infrastructure Services
* Security

02 Logicalis Annual Review 2009

Our World
Our ofﬁces

UK Germany
Slough (HQ) Berlin
London Cologne
Warrington
Livingston Brazil
Cardiff São Paulo
Rio de Janeiro
USA
Chandler, Scottsdale (Arizona) Argentina
San Francisco, Irvine, Buenos Aires
San Mateo (California) Córdoba
Shelton (Connecticut) Mendoza
Atlanta (Georgia) Rosário
Lisle (Illinois)
Indianapolis (Indiana) Chile
Boston (Massachusetts) Santiago
Bloomﬁeld Hills (Michigan)
Golden Valley (Minnesota) Paraguay
St Louis (Missouri) Asunción
Denville (New Jersey)
New York (NY) Perú
Charlotte (N Carolina) Lima
Cincinnati, Dublin (Ohio)
Houston (Texas) Uruguay
Dallas (Texas) Montevideo
San Antonio (Texas)
Seattle (Washington)
Green Bay, Milwaukee
(Wisconsin)

LOCAL

EXPERTISE
Our strategic technology partners:

Preferred Partner


CHAIRMAN’S
STATEMENT

“I am delighted to report another successful year
for Logicalis despite the challenging times. Our
performance demonstrates the success of a focused
strategy and the strength of our management team.”
Jens Montanana
Chairman, Logicalis

Boosted by the very successful acquisition of All main regions were profitable, the biggest
a majority stake in Promon Tecnologia in Brazil, increase coming from South America. Revenues
and its subsequent merger with Logicalis’ existing grew 21% topping $1 billion for the first time, while
South American operations, Logicalis revenues gross profit increased by 18% to $222 million;
rose by 21% to just over $1 billion. In constant operating costs grew much less by a tightly
currency terms, organic revenues would also controlled 8%. As a result EBITDA and operating
have grown. profits grew by over 55% and margins expanded
to 5.6% and almost 4% respectively, our best
The overall performance of Logicalis has been performance to date. These ratios are amongst
exceptional, margins and operating profits are at their some of the very best-in-class for this sector, and
highest levels ever and EBITDA alone grew by over our long term goal is to improve further over the
$20 million or 62% to almost $57 million. Annuity cycle as better conditions return.
and managed services continue to grow strongly
and help underpin the development of the Group, Operating profit has gone from just over $6 million
improving the quality of customer relationships. in FY2005 to approaching $40 million this year, or
equivalent to a CAGR of 60% over 4 years.
It’s pleasing to report that as product sales have
come under pressure in this environment, our The focus and repositioning of Logicalis since the
services mix and business quality have improved. dot com crisis has really paid off. The acquisition


in Brazil has considerably helped balance the The biggest increase came from South America with
geographic split. We expect going forward that the inclusion of the Promon Tecnologia acquisition in
over 30% of revenue will be derived from each of Brazil, reflected in the revenues for much of the year.
the regions of the US, South America and Europe The US grew strongly organically and the decline in
(the latter being the UK and Germany). The US the UK was driven by the dramatic fall in the pound;
is likely to remain the largest region. Germany this in constant currency terms the UK was flat. Germany
year is set to get a boost from a recently completed is expected to contribute profitably next year as
small acquisition which should at least double its we have increased our presence in that market.
contribution. We expect to concentrate our efforts Overall we are extremely encouraged by these
and resources into developing these regions. impressive results.

The revenue versus services split remained Inventories fell as we minimised lead times and
very similar to last year, the slight increase in shortened our bookings to billings gap. DSO
product sales was due to a number of large Cisco (debtors) days have moved out due to the full
project wins, coming mainly in South America. year inclusion of the Promon acquisition in Brazil.
We would expect our services contribution to grow We do however expect this number overall to come
in proportion this year, slower market conditions back into the 50 days. Payables (creditors) days
tend to favour services and we are starting to also elongated reflecting the longer credit terms
see increasing traction in our managed services expected, which is typical in Brazil.
business. We have remained close to this 80/20
split in recent years, it is worth pointing out that Our cash at year end remained at above
at 20% of $1 billion in total revenues for Logicalis, $40 million, compared with $44 million last year.
our pure services business now generates a Given the investments in working capital on the
revenue stream of more than $200 million. back of this strong growth, we believe our balance
sheet remains very well managed and ungeared.
In the last few months, our services revenues
have improved even as product sales have slowed. We believe we are very well positioned to take
The significant increase in the proportion of Cisco advantage of our competitiveness. Gaining market
business was mainly as a result of the acquisition of share and consolidating our industry position, in our
Promon Tecnologia in Brazil. We are now the most key markets, drives our strategic focus. We had a
significant integration partner for Cisco in the South number of large one off projects in the first half of
American market, representing over 30% market last year that will not recur this year.
share in the key countries.
We expect our underlying performance to remain
We continue to invest in maintaining a balanced strong this year and our annuity services base
portfolio and expect soon to drive IBM and HP to grow in proportion to the rest of the business.
solution sales in South America, as this region With our much larger platform in South America
moves to adopt the model we have successfully now, including Brazil, we should be able to grow
developed in the US and UK. We believe we are on our dominant position regionally. Germany
extremely well placed to take advantage of Cisco’s which has been subscale for us for a number
recent entry into the Data Centre market as we have of years should now contribute positively, as we
been representing technologies such as IBM, HP have recently completed a synergistic acquisition.
and EMC, as well as offering services in this space As always we remain vigilant to the macro
for some time. environment and focused on our cost base.

The most encouraging trend in Logicalis’ recent
performance has been the sustained improvement
in profitability. EBITDA reached $57 million this year
from $35 million last year. From an EBITDA margin
of around 2% 5 years ago, EBITDA profits and
margins have grown steadily every year to touching
almost 6% this year. We expect these margins to
stay around or above 5%, even in these tougher
market conditions, as our scale and geographic
diversification supports continued strong profitability.


CEO’S REVIEW

“We are focused on building a strong business
through organic growth and acquisition and we
are perfectly positioned to deliver an impressive
performance in this challenging economic climate.”
Ian Cook
Chief Executive Ofﬁcer, Logicalis


Is there an argument that Logicalis should
EBITDA increased by Total sales increased to
become a services only business or are

62 %
1bn
the product sales important in pulling through
$ the services revenues?
There’s no doubt that Logicalis will continue
to maintain a strong focus on services.
However, we have absolutely no intention of
to $56.9 million (2008: $35.1 million) by 21% (2008: $830 million) abandoning our product based solution sales.
The excellent relationships we have built with
our key vendor partners are at the very heart of
our success. We will continue to build our service
Logicalis’ performance, with revenues
offerings around the most innovative and effective
up 21%, is very encouraging. Is this
technology products. Products are the foundation
performance improvement sustainable?
of many of Logicalis’ solutions and are, therefore,
Revenue growth is always important as long
fundamental to our business strategy.
as it isn’t achieved at the expense of gross
margin. The good news is that our gross margins Are there any more plans to make
are holding up well under the current economic further acquisitions this year?
pressures. As for sustainability, our sales mix is Absolutely. We will continue to look for
increasingly service rich which means we are less opportunities in our existing territories to
reliant on transactional business. As we develop consolidate or add a new facet to our businesses.
and deliver more innovative managed services, Opening in new territories both organically and by
our annuity based revenues will continue to grow. acquisition, is also on our agenda as new markets
develop. We are focused on building a strong
What is the reason behind the turnaround
business through organic growth and acquisition
in Logicalis’ fortunes? Presumably, there
and we are perfectly positioned to deliver an
was more to it than just sorting out the US?
impressive performance in this challenging
The integration of our acquisitions in the
economic climate.
US and UK is now complete. As a result,
we currently have exactly the right mix of vendor What does the future hold for Logicalis?
partners and the ability to offer a rich blend of
solutions and services through a single sales force. We all work within a period of unprecedented
Our new structure is more efﬁcient, more focused economic uncertainty. However, there
and more effective and places our business in the are some things of which we can be certain.
ideal position to meet our short term objectives Organisations throughout the world will always
and long term goals. need information and communications systems to
drive their businesses forward. Our solutions and
Logicalis’ services business appears to
services enable customers to improve collaboration,
be growing strongly. What service areas
efﬁciency and productivity, and lower their
are driving this growth and how?
operational costs and carbon footprint. Logicalis
As well as a growing portfolio of Managed
delivers business solutions that have a predictable
Services, we also have specialist business
and measurable ROI. Technology is the route and we
teams focusing on the Data Centre and
have the solution. As long as we take good care of
Communications and Collaboration; two areas
our customers, the future will take care of itself.
where the demand is growing and the opportunities
are service rich due to the characteristics of the
technologies involved. One of Logicalis’ key services
is the provision of complex technology based
solutions. So we have managed to position ourselves
in exactly the right place at exactly the right time.


BOARD OF
DIRECTORS
01 01 Jens Montanana 03 Mark Rogers
Chairman Chief Operating Officer
Jens is the founder and chief architect behind Datatec, Mark Rogers joined Logicalis in 2003 as
which he established in 1986. Between 1989 and Finance Director for Logicalis UK, and in 2004
1993 Jens served as managing director and vice- he became Chief Financial Officer, European
president of US Robotics (UK) operations, a wholly Operations. Since March 2007, he has taken
owned subsidiary of US Robotics which was acquired on the role of Chief Operating Officer for
by 3Com. In 1993 he co-founded US start up Xedia Logicalis Group.
Corporation in Boston, MA, an early pioneer of
network switching and one of the market leaders in Mark has extensive experience in the technology
IP bandwidth management, which was subsequently and service sectors both in the UK and internationally.
02 He spent 20 years at Racal Electronics/Thales of
sold to Lucent Corporation. In 1994 Jens became
Chairman and Chief Executive Officer (CEO) of which 13 years were at Finance Director level within
Datatec which listed on the JSE in November 1994 divisions providing Managed Network Services,
and on the Alternative Investment Market of the Telecoms and Survey & Positioning Services.
London Stock Exchange in 2006. Jens is also Whilst at Thales he was also Chairman of Citylink
Chairman of the 100% owned subsidiary company Telecommunications, a joint venture company which
Logicalis, a role he assumed in March 2007. Jens had secured a £1.2 billion, 20 year PFI contract by
is non-executive director of Versatile Systems, Inc. London Underground. Also, he has significant M&A
a Toronto and London listed Canadian company. experience including the sale of Racal Telecom to
Global Crossing for £1 billion as well as acquisition
03 02 Ian Cook and integration of smaller businesses.
Chief Executive Officer
Ian Cook joined Logicalis as CEO, European He started his finance career with Revlon where he
Operations in 2003 and became CEO of Logicalis qualified as a Chartered Management Accountant.
Group in March 2007. Since then Logicalis has
04 Nigel Drakeford-Lewis
become an international brand and a respected
Chief Financial Officer
partner of the major technology vendors.
Nigel Drakeford-Lewis is a Fellow of the Institute
Ian has extensive experience in the technology of Chartered Accountants in England and Wales
industry spanning more than 25 years. He joined and also has an honours degree in Economics and
Logicalis from Damovo where he had extensive Accountancy from Exeter University. Nigel joined
04 Datatec in June 2000 initially to help build an advisory
involvement in their international operations as COO.
services division which was subsequently merged
Prior to Damovo in 1990, Ian led the Board of with Logicalis. He then moved across to Logicalis
Cablestream which became Siemens Network Group in November 2000 to focus on the reshaping
Systems Ltd (now Affiniti), one of the UK’s leading of the Logicalis Group and help redefine its strategic
network integrators. Over a 10 year period at SNSL direction. Since April 2001 Nigel has been Chief
he rose to Group Managing Director responsible for Financial Officer of the Group with responsibility
operations across Europe. Previously he was Sales for the financial management and control of all the
& Marketing Director at Case Communications Ltd, operations, covering 20 companies in 9 countries.
a manufacturer of data communications equipment
with operations in the UK, USA and Asia Pacific. After qualifying as a Chartered Accountant with
Grant Thornton, Nigel held senior financial positions
with Black & Decker, Grand Metropolitan (now
Diageo) and Dixons Group. Prior to joining Datatec,
Nigel worked for 5 years as a senior consultant with
Arthur D Little on strategy, corporate finance and
performance improvement assignments, primarily
in the fixed and mobile telecommunications sector.


05 Ivan Dittrich 06 Luiz Fernando T. Rudge
Non-Executive Director Non-Executive Director
Ivan is a Chartered Accountant and has been with Luiz Rudge is Executive Director/CFO and a
Datatec for the past 10 years. He was appointed as member of the Board of Directors of Promon SA.
non-executive director to the Logicalis Board on 22 Following the acquisition by Logicalis of a majority
April 2008, and later became Datatec’s Group Finance stake in Promon Tecnologia in May 2008, Luiz
Director on 1 May 2008. Previously, he was Group then became non-executive director on the
Corporate Director and Group Company Secretary Logicalis Board.
with Datatec for 5 years, as well as Corporate Finance
Manager. Ivan successfully managed the Group’s dual He joined Promon SA in 1982 and served as
listing in London during 2006. Prior to joining Datatec, Treasurer (1987/1991) and Finance Director from
Ivan worked for PriceWaterhouseCoopers in London. 1991 to 2001, when he was elected to his current
position. He led several corporate ﬁnance deals
on behalf of Promon, including M&A transactions as
well as ﬁnancing arrangements to support Promon’s
proprietary investments and its contracts with clients.
Prior to joining Promon during 1986/1987 Luiz Rudge
was engaged in foreign trade activities.

Luiz holds a BA degree in Business Administration
from Fundação Getulio Vargas (FGV/São Paulo),
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.


A STRATEGY FOR

TODA Gaining strength, capability and market share
within our key markets is our clear strategic focus.


YAND

TOMORROW
Our strategic business model is built around helping our
customers use technology to embrace, support and drive their
strategic business processes. We understand our customers’
businesses and it is this business know-how that enables us
to create competitive advantages for our customers and us.
Strategic principles

01 Innovative services 02 Technical excellence 03 Business know-how

Maximise growth in profit and value

Today and one of the first to test and then prove emerging technologies.
Logicalis’ business strategy has always been clear: to provide Logicalis is now recognised as a technology business partner that
its customers with business value and business transformation is able to drive business growth in both existing and new markets.
through innovative ICT.
Tomorrow
Today, Logicalis is a business that is able to implement and support Our strategic goal is to establish Logicalis as the ICT partner of choice
its customers’ entire ICT environment; both their front and back office. for customers worldwide. As we pursue our goal, we shall continue to
We offer a complete portfolio of professional and managed services seek and adopt innovative technologies and services that will transform
that enable our customers to optimise and extend the lifetime value the organisations of today into the organisations of tomorrow.
of their ICT investments.
Cloud Computing, Streaming Video and Next-Generation Services are
By building close working relationships with our strategic partners, just a few of the new concepts, solutions and services that Logicalis
we have become leading experts in achieving business transformation is working on today to enable its customers to work more effectively and
through ICT. By investing to attain the highest level of partner profitably tomorrow. The pace of change means tomorrow is not
accreditations we have become masters of today’s technologies so far away; Logicalis is determined to be there first.


USING THE

LEFT R AND

One side of the brain delivers creative ingenuity.
The other delivers practical capability. When both sides
work together as one, they deliver the power to innovate.
Organisations now recognise that it is ICT that drives
businesses forward. They recognise that innovative ICT
solutions enable more ﬂexible, responsive and productive
ways of working. And they lead to greater opportunity,
competitive advantage and shareholder value.


Our Strategic Technology Partners

Cisco HP around IBM technology.
Logicalis has the highest Logicalis is one of HP’s Logicalis is also one of the
level of accreditation and highest accredited partners, only integrators to support
an excellent reputation with capable of effectively all IBM hardware server
Cisco that delivers significant supporting HP solutions platforms (Systems x,i,p,z),
technical and support to enterprise and mid-size and their complete range
benefits to customers; organisations, from Blade of middleware software
with specialisations in Server Virtualisation through and services.
Communications & to large enterprise Data
Collaboration, TelePresence, Centre total refresh projects. Microsoft
Data Centres, Wireless Logicalis is a Microsoft
LANs, Network Security IBM Gold Certified Partner
and Network Infrastructure. Logicalis is a Premier with certifications in
IBM Business Partner Portals & Collaboration,
and recognised by IBM for Business Intelligence,
our excellence in delivering Data Management,
a variety of technology Unified Communications,
solutions and services built Infrastructure, and Hosting.

IGHT SIDES OF THE BRAIN
Innovation in ICT is not about enabling technology
to do remarkable things. It’s about enabling your
customer’s business to do remarkable things.
Collaborative working
We create project teams that bring together
technical experts and system architects across
Great ideas are no substitute for great achievements. multiple vendor platforms and systems to design
and deploy complex highly integrated solutions.
Logicalis recognises that innovation in ICT is about Logicalis’ collaborative working environment
enabling its customers’ people, departments, enables easy access to in-house technical experts
partners, suppliers and customers to communicate and sharing of customer references across its
effectively and collaborate more productively. international operations.

Experience proves that it’s people, not technology, Technology partners
that drive organisations forward. When you can Our focus on emerging and innovative technologies
get a diverse and complex group of people to work and our breadth of integration expertise encourages
together as one, you are then able to get a complex close cooperation with our key technology partners.
set of technologies, systems and processes to work Our close partner relationships mean we are often
as one. Organisations who embrace this will derive first to market and to deploy new technologies,
the benefits. especially in the areas of Communications and
Collaboration, and the Data Centre.
The left hand has to know what the right hand
is doing Our customers
Logicalis is early to master and market emerging By ensuring we always develop an intrinsic
technologies within its fields of expertise. We identify understanding of our customers’ business challenges
the technologies that we believe will have most and goals, Our approach to their ICT requirements
positive impact on our customers’ business will always focus upon how best to help our
transformation. We invest to attain the highest customers become smarter, leaner and faster.
accreditations with our key vendor partners in order
to gain a deep understanding and early experience
of new technologies. This enables us to deliver tried,
tested and proven solutions into our customers’
environment; reducing risk and time to market.


MAKING THE

COMPL Our approach
More and more organisations are seeking innovative
ways to manage the growing complexity of their IT
environments.

The pressures of everyday business place an
increasing range of demands on the organisation’s
deliver real business benefits in days not weeks, the
capacity to meet rapidly changing customer demands,
comply with government regulation, and respond
to whatever challenges their competitors present.

Service mentality
Over 40% of Logicalis employees are consultants,
IT and communications infrastructure and services: technical architects, application developers and
customers demand a seamless and immediate customer support personnel. All are part of an
experience across all channels; suppliers and international service delivery team with the breadth
stakeholders are adopting streamlined, internet-driven of skills and experience needed to support our
processes; and employees expect immediate customers’ end-to-end ICT environments.
access to applications and real-time data to work
effectively. At the same time, organisations face the Organisations who are struggling both to retain
challenge of being able to bring new applications the breadth of skills they require and to justify the
and services on-line without disrupting their existing associated cost of staffing, are choosing Logicalis
business operations. as their Managed Service partner, to manage the
growing complexity of their IT environments.
The constant pressure to deploy the latest technologies
required to meet a growing set of diverse needs, has Managing complexity
led organisations to create a proliferation of hybrid Staying ahead of the game with emerging and
environments that are proving extremely difficult to complex technologies, and determining how best to
manage, and increasingly inefficient. integrate with an organisation’s business processes
and existing infrastructure, are challenges Logicalis
Increasing competitive advantage overcomes every day.
Logicalis is a specialist in aligning IT with business
goals. We help define, develop and implement Our experience and breadth of skills in supporting
ICT strategies and technologies that enable our these complex environments, with best practice ITIL
customers to stay ahead of the demand cycle and based methodologies, guarantees and delivers the
improve performance and competitive advantage. highest levels of service quality and consistency that
are available today.
Our focus is upon creating agile network and
communications environments that can adapt Removing complexity for our customers is what
quickly to respond to constant change. We give our we do best. It’s as simple as that.
customers the ability to roll out new applications that


“ I can buy Cisco equipment anywhere. “We pride ourselves as a corporation
What I can’t get anywhere are people on building lasting relationships. We’re
who understand how we want to run the always looking for people who know where
Cisco equipment. That’s where Logicalis we are going and understand what our
comes in. They can do it all; or they can goals are, and are confident enough to be
do just as much as we want them to. able to tell us “have you considered this or
That is important because it provides that?’’ Logicalis is a great example of that
me a lot of flexibility.” kind of partner.”
Ken Plummer, Bill Demsky,
Vice President of IT, Amec Chief Architect, Valassis

EX
SIMPLE
The most successful businesses today are those that
effectively manage complexity. As customers become
more demanding, data more prolific and regulations
more stringent, organisations are forced into deploying
the most up-to-date technology to ensure they stay ahead
of the game. At Logicalis, we understand our customers’
businesses and have the unique blend of commercial
and business acumen coupled with technological excellence.
It’s about technology and business working as one.


01 02

BUSINESS KNOW-HOW ACROSS

PUBLIC
Logicalis can help to transform organisations
with an infrastructure that supports
innovative, collaborative applications and
improves business agility.We make it easier
for our customers to share skills and knowledge,
to make fast decisions and move swiftly
to exploit change.


01 Education – University of 03
Southampton (UK), Central Michigan
University (US) and Universidade Federal
do Rio Grande do Sul (Brazil), are
examples of the many higher education
institutions that have chosen Logicalis to
provide the technology needed to meet the
ever changing demands and expectations
of their student body, faculty members
and administrative staff.

02 Health – GE Healthcare (UK),
Meoclinic (Germany) and Hospital de
Pediatría S.A.M.I.C., (Argentina) are
amongst a growing number of healthcare
organisations that trust Logicalis to
provide the ICT infrastructure that is
now critical to the delivery of high quality
patient information and care.

03 Banking – Logicalis provides ICT
solutions and services to a number of
retail and private banking institutions
and hedge-fund organisations. One of
the largest being Santander, for whom
Logicalis provides ICT infrastructure
support across Brazil, Argentina,
Uruguay, Germany and the UK.

04 Manufacturing – Logicalis supports
manufacturing organisations of all sizes
within its local geographical markets.
Goss International (US), ABB Energy &
Automation Technics (Germany) and
Pirelli (South America) are just a few
of the manufacturing clients that Logicalis
has helped create seamless supply-
chains, increase productivity and
reduce downtime.

PRIVATE
SECTORS
04
Providing consultation and services
to both public and private sector
organisations such as education,
ﬁnancial services, health, local
government, manufacturing,
distribution, retail and media.


INTERNATIONAL
OPERATIONS

USA Awards
Headquartered in Bloomfield Hills, Detroit, Logicalis * Cisco National Global Enterprise
Partner of the Year 2009
US has more than 30 regional offices and around
550 employees supporting the full spectrum of * Cisco Central Region
Commercial Partner
ICT solutions.
of the Year 2009
The company’s background in enterprise computing * IBM Beacon Award for
and strong relationships with HP and IBM, places it in Outstanding Virtualization and
an ideal position to help its customers meet their Data Consolidation Solution 2009
Centre challenge. In recent years, Logicalis US has
developed its customer base in Cisco Advanced
Technology, boosting sales of Cisco based solutions to
$70 million, to make them a partner of equal standing. Headcount

550
Today, around 30% of the company’s employees
are engaged in services roles applying their specialist
expertise in Applications Development, Business
Consultancy and Managed Services.
Percentage contribution to Group revenue
employees 40%

South America Awards
Logicalis’ South American operation has its main * Cisco Emerging Markets Theatre
Partner of the Year 2009 –
offices in São Paulo (Brazil) and Buenos Aires
PromonLogicalis Latin America
(Argentina) and employs 580 staff. The company
also has a local presence in Chile, Paraguay, Peru * Cisco Enterprise Partner
of the Year for the APU Region
and Uruguay.
(Argentina, Paraguay and
Its scale and revenue contribution for the Logicalis Uruguay)
Group has been augmented through the acquisition * Cisco Service Provider Partner
of a majority stake in Promon Tecnologia, and the of the Year 2009 – Brazil
subsequent merger with its South American (PromonLogicalis)
operations.
Headcount

580
The company is now the largest independent
integrator for Cisco throughout the region and a major
supplier to the leading telecoms providers. A recent
local partnership with IBM will now begin to create
opportunities within the Data Centre market.
employees 28%


United Kingdom Awards
Logicalis UK has its headquarters in Slough, with * Cisco Uniﬁed Communications
Partner of the Year 2009 –
ofﬁces in London, Warrington, Wales and Scotland,
UK&I
and employs over 450 staff. The company has adopted
a hybrid sales approach to delivering multi-vendor * Cisco Data Centre Partner
of the Year 2009 – UK&I
integrated solutions across IBM, Cisco, HP, Microsoft
and other complementary technologies.

Logicalis UK has a rich heritage in delivering
Professional and Managed Services. This area of
the business now accounts for some 30% of the
company’s sales with strong annuity revenues being
generated from a growing Managed Service customer Headcount

450
base. Logicalis UK’s Managed Service Centres based
in Slough and London, and its Tier III Data Centre,
provides 24x7 enterprise performance management,
co-location and managed hosted solutions.
employees 31%

Germany
With its headquarters in Cologne, Logicalis Germany
has a strong presence in both the North Rhein
Westphalia (the largest economic area in Germany
by GDP) and the Berlin markets. The company is
important strategically to Logicalis for its ability to
target new business opportunities within the Euro zone.

The German operation is comparatively small
with around 50 employees. However, the recent
acquisition of Minters, a Cisco Silver Partner, has
created a stronger business that has an excellent
reputation, within both Cisco and its customer Headcount

50
base, for its technical capabilities.

The business now has growing annuity revenues
and is perfectly positioned to provide IT and
communication solutions to the German mid-market
for both Communications and Collaboration and also 1%
employees
Data Centre solutions.


OUR CORPORATE
SOCIAL
RESPONSIBILITY
Our policy is to actively and enthusiastically support the
welfare of our people, the environment and local communities
wherever we have a presence.

01 Our People Environment
Logicalis aims to be an employer of choice; As a responsible international provider of ICT
attracting, developing and retaining the best people. solutions, we seek to measure and minimise the
Our personnel practices ensure that every employee, way in which any of our commercial activities may
wherever they work, whatever their role, is treated impact the environment. We are also committed to
equally, fairly and respectfully at all times. Adherence providing practical advice and support to our
to international health and safety standards ensures customers and suppliers to help them along the
that our people are properly protected and cared for, path to ever cleaner and greener ICT solutions.
wherever they operate.
As an early adopter of the Green ICT ideas and
We maintain consistent and transparent diversity activities, Logicalis recognises that a responsible
01 Junior Achievement policies across all our markets. We firmly believe attitude to Green ICT can lead to significant reductions
02 Creche Santa Tereza de Jesus that career opportunity, recognition and reward in energy consumption and carbon emissions. As well
03 A.D.A.N.D. should be determined by a person’s capabilities as reducing greenhouse gases and operational costs,
04 Capuchin Soup Kitchen
and achievement, not their age, sex, race, religion the technologies we promote, such as remote working
or nationality. Wherever we operate, we strive to and video and teleconferencing, enable more flexible
maintain a workforce that reflects the skills, ethnicity working, greater productivity and improved business
and demographics of the local population. continuity. Green ICT is good for the planet and it’s
good for business.
We recognise that it is the ideas, skills and
capabilities of our people that drives our
development and growth. In return, we will invest
in whatever training and resources our people
need to ensure that they are able to develop and
grow with us.


02 Community Logicalis South America made donations to local
We encourage our operating companies in every community charities including Fundacion Gospa,
territory to create initiatives that help improve the Asociacion Sordos Mudos, and A.D.A.N.D, an
quality of life for their local communities. Here are organisation that helps vulnerable children. Other
just a few highlights: initiatives include a recycling programme to support
the Foundation of Garrahan Hospital for children.
VolunteerMatch is a US initiative supported by our
Logicalis US operation, that saw our employees give In Brazil, PromonLogicalis supported Junior
over 1,000 hours of their personal time throughout Achievement, an organisation that teaches
FY09 to support a range of community charities. children about work readiness and entrepreneurship;
They also made donations to Big Brothers, Big Creche Santa Tereza de Jesus, a nursery for socially
Sisters of Metropolitan Detroit and donated holidays vulnerable children; and Ação Comunitária do Brasil,
03 to 21 charities. an organisation that provides education, culture and
citizenship programmes to advance social inclusion.
For the third year in succession, Logicalis UK made
donations to the Berkshire Community Foundation PromonLogicalis is also involved in ‘Programa
which provides grants to local voluntary groups to de Preparação para o Trabalho’ which helps young
support grassroots projects. These include young people develop the attitudes and skills needed to
people with special needs, the disabled, the elderly improve employment prospects and social inclusion.
and the homeless. Participants are welcomed into our local ofﬁces in
Brazil, to receive advice and guidance from our staff
on self-development, employability, writing CVs
and preparing for interviews.

04


FINANCIAL
OVERVIEW

Improved geographical mix Revenue % geographical split
2009
The acquisition of a majority stake in Promon
2
Tecnologia, Brazil, in May 2008, has considerably
helped balance the geographical mix of Logicalis’
regional operations. Profits are expected to be
derived almost equally between the three regions;
the US, South America and Europe (UK & Germany).

1 US 40%
1 3
2 South America 28%
4
3 UK 31%
4 Germany 1%

m
200
Sales mix remained steady Revenue segmental split
The revenue versus services split has remained
fairly constant, with a slight increase in product
sales due to a number of large Cisco project wins.
2009

1 2 $
A higher proportion of services business in the
future is expected to contribute to the sales mix,
with more favourable conditions and greater Services business in consulting,
traction for managed services. design and integration, support,
3 hosting and managed services
1 Solutions 81%
2 Professional Services 9%
3 Maintenance & Managed Services 10%

Cisco largest vendor partner following Revenue product vendor mix %
Brazil acquisition 2009
2
The significant increase in the proportion of Cisco
3
business is as a result of the acquisition with Promon
Tecnologia. Logicalis is now the most significant
integration partner for Cisco in the South American
market. Continued investment will be made in
maintaining a balanced portfolio to also drive IBM
and HP solution sales in South America, adopting 4

the same model as the US and UK businesses.

1 IBM 27%
2 Cisco 44% 1
3 Others 12%
4 HP 17%


Solid improvement in US profitability and strong Logicalis Revenue
Brazil acquisition contribution
The most encouraging trend in Logicalis’ recent
performance has been the sustained improvement in
profitability. EBITDA profits and margins have grown
steadily every year, touching almost 6% in FY2009.
The biggest increase came from South America with
the inclusion of the Promon Tecnologia acquisition in
Brazil, reflected in the revenues for much of the year,
as well as strong organic growth in the US, and a
significant increase in Managed Services revenues
in the UK.
FY05 FY06 FY07 FY08 FY09
Revenue $340.9m Revenue $505.4m Revenue $696.2m Revenue $830.3m Revenue $1,007.4m

Logicalis EBITDA

FY05 FY06 FY07 FY08 FY09
EBITDA $9.6m EBITDA $16.7m EBITDA $26.8m EBITDA $35.1m EBITDA $56.9m

Notes
Figures from Logicalis Group Limited published Statutory Accounts.
FY06 restated for Net Revenue accounting adjustment as published in FY07 Statutory Accounts.
FY08 and FY09 excludes Intact Integrated Services Limited (transferred to Datatec on 28 February 2009).


FINANCIAL
RESULTS
Income statement – unaudited 2009 2008
US$m US$m
Revenue 1,007.4 830.3
Cost of sales (785.7) (643.0)
Gross profit 221.7 187.3
Administrative expenses (164.8) (152.2)
EBITDA 56.9 35.1
Depreciation of property, plant and equipment (5.3) (4.4)
Amortisation of intangible fixed assets (12.3) (5.6)
Operating profit 39.3 25.1
Net finance costs (5.7) (3.1)
Datatec management fees (3.4) (3.1)
Impairment of goodwill (20.9) –
Revaluation of minority interest buy-out liability 13.7 –
Profit before tax 23.1 18.9
Tax on profit on ordinary activities (14.6) (5.2)
Profit for the year for continuing operations 8.5 13.8
Profit from discontinued operations 10.3 1.1
Profit for the year 18.8 14.8

Balance sheet – unaudited 2009 2008
US$m US$m
Goodwill and other intangible assets 139.6 120.3
Property, plant and equipment 13.6 14.5
Deferred tax asset 11.9 11.6
Total non-current assets 165.1 146.4
Inventories 20.0 28.0
Trade and other receivables 202.4 172.7
Cash and cash equivalents 40.9 45.1
Total current assets 263.3 245.7
Total assets 428.4 392.2
Trade and other payables (213.8) (222.1)
Bank overdrafts and loans 0.0 (0.8)
Deferred consideration on acquisition of subsidiaries (11.4) (0.7)
Total current liabilities (225.2) (223.6)
Net current assets 38.2 22.2
Amounts owed to holding company and fellow subsidiaries (31.3) (3.1)
Obligations under finance leases (7.7) (0.1)
Liability for minority interest buy-out (22.2) 0.0
Deferred consideration on acquisition of subsidiaries (11.5) (1.3)
Deferred tax liabilities (10.7) (10.2)
Other long term liabilities (1.1) (5.7)
Total non-current liabilities (84.5) (20.4)
Total liabilities (309.7) (244.0)
Net assets 118.7 148.2
Share capital and share premium 130.2 130.2
Minority interest buy-out reserve (22.2) 0.0
Foreign currency exchange and other non-distributable reserves (49.0) (17.2)
Retained earnings 39.5 35.1
Attributable to equity holders of the parent 98.5 148.1
Minority interest 20.2 0.1
Total equity 118.7 148.2


OUR
SUBSIDIARIES
Proportion
of ordinary
shares held
Subsidiary Country of registration and operation Activity 2009 2008

Logicalis Group Services Limited England and Wales Group management services 100% 100%

Logicalis UK Limited England and Wales Professional services and IT solution provider 100% 100%
Satelcom Limited England and Wales Dormant 100% 100%
Logical Group Limited England and Wales Intermediate holding company (dormant) 100% 100%
PromonLogicalis Latin America Limited England and Wales Intermediate holding company 70% 100%
(formerly Logicalis South America Limited)
Logicalis Computing Solutions Limited England and Wales Dormant 100% 100%
Logicalis Computing Solutions Finance Limited* England and Wales Dormant 100% 100%
Hawke Systems Limited England and Wales Dormant 100% 100%
TBC Group Limited England and Wales Intermediate holding company (dormant) 100% 100%
TBC Limited* England and Wales Dormant 100% 100%
Logicalis Limited England and Wales Dormant 100% 100%
Logicalis Ireland Limited Ireland Professional services and IT solution provider 100% 100%
Logicalis Deutschland GmbH Germany Intermediate holding company 100% 100%
Logicalis Networks GmbH* Germany Professional services and IT network integration 100% 100%
Logicalis US Holdings, Inc. USA Intermediate holding company 100% 100%
Logicalis, Inc.* USA Professional services and IT solution provider 100% 100%
ActiveSymbols, Inc. USA Professional services and IT solution provider 100% 100%
Logicalis South America Inc* USA Professional services and IT solution provider 70% 0%
PLLAL International LLC* USA Professional services and IT solution provider 70% 0%
PromonLogicalis Tecnologia e Participações Ltda* Brazil Professional services and IT solution provider 70% 0%
PTLS Comércio, Exportação e Importação Brazil Professional services and IT solution provider 70% 0%
de Equipamentos de Telecomunicação Ltda*
Logicalis Brasil Importação Exportação Ltda* Brazil Professional services and IT network integration 70% 100%
Logicalis Argentina S.A.* Argentina Professional services and IT network integration 70% 100%
X-Net Cuyo S.A.* Argentina Electronic commerce enablement services 70% 100%
Logical Uruguay S.A.* Uruguay Professional services and IT network integration 70% 100%
Logicalis Inc S.A.* Uruguay Professional services and IT network integration 70% 100%
Logicalis Paraguay S.A.* Paraguay Professional services and IT network integration 70% 100%
Logicalis Chile S.A.* Chile Professional services and IT network integration 70% 100%
Logicalis Andina S.A.C.* Peru Professional services and IT network integration 70% 100%

All subsidiaries are owned directly by Logicalis Group Limited, except those marked * which are held indirectly via an intermediate subsidiary.
All subsidiaries listed above have been included in the consolidation. The proportion of voting rights of subsidiaries held by the Group is the same as the proportion of shares held.

www.logicalis.com

Logicalis Group
110 Buckingham Avenue
Slough
Berkshire
SL1 4PF

Tel: +44 (0)1753 777 200

www.logicalis.com

This brochure has been printed in the UK, our printers are
Environmental Management System ISO 14001 accredited
and Forest Stewardship Council (FSC) chain of custody
certiﬁed. All inks are vegetable based.

Designed and produced by The College www.thecollege.uk.com

Annual Review 2009: Logicalis Delivers Strong Growth and Record Profits

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