DATATEC LIMITED - Interim Management Statement
27 January 2016 9:00
DTC 201601270005A
Interim Management Statement

Datatec Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1994/005004/06)
ISIN: ZAE000017745
Share Code: DTC
(“Datatec” or “the Group”)

Interim Management Statement

Datatec Limited ("Datatec" or the "Group", JSE and LSE: DTC), the international Information and
Communications Technology (ICT) group, is today publishing an Interim Management Statement
covering the period from 1 March 2015 to 31 December 2015 ("the Period").


The Group delivered revenue growth of 1.8% to $5.5 billion for the Period.

As an international group with operations in over 60 countries, Datatec continues to benefit from
its diverse geographic portfolio. The significant strengthening of the US dollar and mixed global
economic conditions have reduced the contribution of emerging markets operations to Group
results. However, growth in the United States and Europe has been resilient compared to the 10
months ended 31 December 2014 ("the Comparable Period").

Group gross margins were 13.3% over the Period (Comparable Period: 13.8%), up from 13.1%
in H1 FY16.

Growth in underlying operating profit continues to be impacted by translation to US dollar as the
reporting currency, the costs of on-going restructuring initiatives and foreign exchange losses,
particularly in Angola.

Group EBITDA (excluding foreign exchange) is expected to show a modest sequential
improvement in H2 FY16 compared to H1 FY16, as indicated in the interim results. The Board
expects to maintain the full year dividend in line with previous years.

Jens Montanana, Chief Executive Officer, said:

"The slowdown in emerging markets has been challenging, however the
diversification and quality of our geographic portfolio, coupled with our strong
industry position, enables us to weather these market conditions.

“Westcon and Logicalis both continue to make good progress in their initiatives to
improve operating efficiency and adapt to market changes.”


Westcon’s revenues for the Period were $4.2 billion, 3.1% higher than for the Comparable
Period. Gross margins in the Period were 10.1% compared to 10.3% for the Comparable Period
(adjusted for the reclassification of freight-out costs).

In Angola, remittances to foreign creditors are limited and the depreciation of the Kwanza has
continued. As a consequence, foreign exchange losses of $16.9 million were incurred in the
Period of which $12.5 million is unrealised and $4.4 million realised. The management team has
taken a series of actions to control the exposure.

Westcon has instituted cost control initiatives aimed at improving operating profitability in many
areas of the business in coming years. In particular, the restructuring and business process
outsourcing (BPO) transformation of Westcon Europe, Middle East and Africa (EMEA) that
commenced in October 2015 is running successfully and is expected to deliver considerable
improvements in operational efficiency.

Logicalis’ revenues for the Period were $1.3 billion, 1.9% lower than the Comparable Period,
mainly as a result of the strengthening US dollar and lower contribution from emerging markets.
Gross margins improved during H2 FY16 having been less affected by the volume transactions in
the United States noted in H1 FY16.

The weakness of the Brazilian Real in particular and the reorganisation of Logicalis UK impacted
operating profits.

On 1 December 2015, Logicalis acquired Thomas Duryea Consulting, a provider of Data Centre,
Cloud and Microsoft solutions and services with operations in Melbourne and Sydney. With
annual turnover of approximately US$50 million and 125 employees, the acquisition will enhance
Logicalis’ scale and capabilities in the Australian ICT market.


The Consulting Division has recovered significantly in H2 FY16, converting the small EBITDA loss
of H1 FY16 into an EBITDA profit for the Period.

FY16 results and reporting

The Group expects to release its results for the year ending 29 February 2016 on Wednesday 11
May 2016.

The financial information on which this statement is based has not been reviewed and reported
on by Datatec's external auditors.

* Excluding impairment of goodwill and intangible assets, profit or loss on sale of investments
and assets, amortisation of acquired intangible assets, unrealised foreign exchange movements,
acquisition related adjustments, fair value movements on acquisition-related financial
instruments, restructuring costs and the taxation effect on all of the aforementioned.

27 January 2016

RAND MERCHANT BANK (A division of FirstRand Bank Limited)


Datatec Limited (
Jens Montanana – Chief Executive Officer                         +44 (0) 1753 797 118

Jurgens Myburgh – Chief Financial Officer                        +27 (0) 11 233 3301
Wilna de Villiers – Group Investor Relations &                   +27 (0) 11 233 1013
Communications Manager
Jefferies International Limited – Nominated Advisor and Broker
Nick Adams/Alex Collins                                          +44 (0) 20 7029 8000

finnCap – Broker
Andrew Stewart                                                   +44 (0) 20 7220 0500
Instinctif Partners
Adrian Duffield/Chantal Woolcock (UK)                            +44 (0) 20 7457 2020
Frederic Cornet/Pietman Roos (SA)                                +27 (0) 11 447 3030

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