Westcon International performance

Westcon International revenue percentage contribution by geography

Westcon International gross profit percentage contribution by geography

US$ million	FY23	FY22	% movement
Revenue	3 420.6	2 890.4	18
Despite significant supply chain disruptions, Westcon International’s revenue increased due to strong demand for network infrastructure, remote access solutions, enhanced cyber security and unified collaboration for flexible working and virtual office environments. In constant currency, revenue improved by 25.4%.
Gross profit	328.7	319.0	3
The decrease in gross margin is largely due to the rapid strengthening of the US Dollar against the Euro and Pound Sterling in the first half of FY23 which had a significant negative impact on gross margins in Europe throughout FY23. These negative impacts were partially offset by benefits of foreign exchange hedging gains reported in operating expenses. Realised foreign exchange gains of US$17.5 million (foreign exchange gains FY22: US$2.2 million) were generated and unrealised foreign exchange losses were US$7.0 million (foreign exchange gains FY22: US$2.6 million). The unrealised foreign exchange variances arose mainly in Westcon Europe on open positions of FECs. The FECs hedge the net open working capital position of the business, as well as the open order backlog, which constituted the majority of the unrealised variances.
Gross margin (%)	9.6	11.0
Operating costs	(280.3)	(250.9)	12
Operating costs increased due to the impact of the net foreign exchange gains of US$10.5 million (FY22: US$4.8 million gain) discussed above which were offset by share-based payment charges of US$36.3 million (FY22: US$10.5 million). Excluding both foreign exchange gains and share-based payment charges, operating costs increased 3.8% or US$9.3 million.
EBITDA	48.4	68.1	(29)
EBITDA decreased primarily due to a US$25.8 million increase in share-based compensation expense.
EBITDA margin (%)	1.4	2.4
Adjusted EBITDA	95.1	78.6	21
Adjusted EBITDA increased with higher results in Europe, MEA and Asia-Pacific.
Adjusted EBITDA margin (%)	2.8	2.7
Operating profit	21.7	43.6	(50)
Operating profit margin (%)	0.6	1.5

Net working capital

Net working capital days increased to 23 days (FY22: 15 days) due to a combination of higher days sales outstanding and a reduction in inventory turns partially offset by an improvement in days payable outstanding, mainly as a result of extra payment days received from Cisco. Net debt decreased US$16.6 million to US$68.4 million (FY22: US$85.0 million).

Cash and net debt

US$ million	FY23	FY22
Cash resources	332.3	204.5
Bank overdrafts	(7.1)	(7.5)
Short-term interest-bearing liabilities and short-term leases	(361.9)	(243.5)
Long-term interest-bearing liabilities and long-term leases	(31.7)	(38.5)
Net debt	(68.4)	(85.0)

Non-financial performance

Westcon International has successfully continued to roll-out and increase adoption of internal tools, new applications, and extended partner and vendor integrations that have all contributed to improved internal and external stakeholder experiences.

The business has, once again, been awarded numerous vendor awards and accolades in recognition of the outstanding execution in all markets in which the business operates (refer to the Westcon International divisional report).

Westcon International's ONE Westcon, related employee wellness initiatives and training programmes all continue to enrich the lives of every Westcon International member motivating them to make outstanding contributions.

Westcon International is committed to ambitious corporate climate action and has signed up to the SBTi initiative and formally committed to set net zero targets for validation by the SBTi.