Pro forma supplementary financial information is included to illustrate i) the effects of the translation of foreign operations on the Group ii) the effects of share-based payments, restructuring costs,
one-off tax items impacting EBITDA, and acquisition, integration and corporate actions costs on EBITDA and iii) the effects of normalisation adjustments impacting headline earnings ("underlying earnings"). The pro forma adjustments to EBITDA and underlying earnings are to align with international peer reporting.

Pro forma financial information is included for the Group's revenue for the current reporting period had it been translated at the average foreign currency exchange rates (simple average) of the prior reporting period ("constant currency").

Pro forma financial information is included for EBITDA. The Group has adjusted its EBITDA to exclude share-based payments, restructuring costs, one-off tax items impacting EBITDA, and acquisition, integration and corporate actions costs ("adjusted EBITDA").

Pro forma underlying earnings information is also presented. Underlying earnings exclude the following: impairments 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 relating to fundamental reorganisations, one-off tax items impacting EBITDA, costs relating to acquisitions, integration and corporate actions, and the taxation effect on all of the aforementioned.

This supplementary information constitutes pro forma information in terms of the JSE Listings Requirements. The pro forma financial information has been compiled for illustrative purposes only and is the responsibility of the Datatec directors. Due to the nature of this information,it may not fairly present the Group's financial position, changes in equity and results of operations or cash flows.

The pro forma information has been compiled in terms of the JSE Listings Requirements and the Revised Guide on Pro Forma Information by SAICA. The Group's external auditor, PricewaterhouseCoopers Inc., has issued an unmodified assurance report, in terms of ISAE 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information in a Prospectus on 23 May 2023. Refer to the pages following this note for their unmodified reporting accountant's report thereon.

Effects of the translation of foreign operations

To determine the revenues in constant currency terms, the current financial reporting period's monthly revenues in local currency have been converted to US Dollar at the average monthly exchange rates prevailing over the same period in the prior year. The average exchange rates of the Group's material currencies are listed below:

Average exchange rates		Year ended 28 February 2023	Year ended 28 February 2022
British Pound/US Dollar		1.21	1.37
Euro/US Dollar		1.04	1.16
US Dollar/Brazilian Real		5.13	5.37
US Dollar/Australian Dollar		1.45	1.35
US Dollar/Singapore Dollar		1.38	1.35
US Dollar/South African Rand		16.79	15.01

Constant currency financial information

		Year ended 28 February 2023
US$'000		Revenue	Pro forma revenue	Constant currency % change
Datatec Group		5 143 125	5 468 878	20.3
Westcon International		3 420 569	3 625 509	25.4
Logicalis International		1 231 517	1 314 656	16.0
Logicalis Latin America		491 039	528 713	1.2

Adjusted EBITDA

To determine adjusted EBITDA, share-based payments, restructuring costs, one-off tax items impacting EBITDA, and acquisition, integration and corporate actions costs have been excluded. After a review of the key financial metrics of Datatec's international peers at a Board strategy meeting, the Group is now presenting adjusted EBITDA excluding one-off tax items impacting EBITDA, and acquisition, integration and corporate actions costs. This is in order to be more in line with international peer reporting. This change has been applied prospectively. While the comparatives are unadjusted, these items were not material in the prior year.

US$'000		Year ended 28 February 2023	Re-presented^ Year ended 28 February 2022
EBITDA		98 246	143 457
Share-based payments		52 641	15 465
Restructuring costs		15 157	–
One-off tax items impacting EBITDA*		11 863	–
Acquisition, integration and corporate actions costs*		2 275	–
Adjusted EBITDA		180 182	158 922

*	Based on information underlying the consolidated annual financial statements for the year ended 28 February 2023.
^	The prior year has been re-presented to show comparative results from continuing and discontinued operations in accordance with IFRS 5.

Underlying earnings

Underlying earnings exclude the following: impairments 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 relating to fundamental reorganisations, one-off tax items impacting EBITDA, costs relating to acquisitions, integration and corporate actions, and the taxation effect on all of the aforementioned.

As stated above, the exclusion of one-off tax items impacting EBITDA, and acquisition, integration and corporate actions costs is in order to be more in line with international peer reporting. This change has been applied prospectively. While the comparatives are unadjusted, these items were not material in the prior year.

 

US$'000		Year ended 28 February 2023	Year ended 28 February 2022
Reconciliation of headline (loss)/earnings to underlying earnings
Headline (loss)/earnings		(20 235)	33 008
Underlying earnings adjustments		37 374	5 075
Unrealised foreign exchange losses/(gains)		9 115	(470)
Acquisition-related fair value adjustments		38	(567)
Restructuring costs		15 157	–
Amortisation of acquired intangible assets		11 886	10 100
One-off tax items impacting EBITDA*		11 863	–
Acquisition, integration and corporate actions costs*		2 318	–
Tax effect		(7 258)	(3 009)
Non-controlling interests		(5 745)	(979)
Underlying earnings		17 139	38 083
Continuing operations - Re-presented^		13 311	32 471
Discontinued operations - Re-presented^		3 828	5 612
Underlying earnings per share (US cents)
Underlying		7.9	18.7
Continuing operations		6.1	16.0
Discontinued operations		1.8	2.7
Diluted underlying		7.6	18.2
Continuing operations		5.9	15.5
Discontinued operations		1.7	2.7

^	The prior year has been re-presented to show comparative results from discontinued operations in accordance with IFRS 5.
*	Based on information underlying the consolidated annual financial statements for the year ended 28 February 2023.