Chair's review

Positioning

The global operating environment in the past year has been characterised by accelerated AI adoption, intensified cyber security threats and regulation, and a strategic shift in cloud and infrastructure management. In addition, global inflation exhibited a clear downward trend, prompting a gradual easing of interest rates. Datatec capitalised on improving conditions to attract new business and further leverage profitability through effective working capital management and efficiencies.

Disciplined investment in advanced digital systems, as well as AI and data platforms are accelerating the transformation of our businesses into global
leaders in data-driven technology and specialist distribution of cyber security and networking solutions. The development of capabilities within cloud, IoT, software, security, data management and intelligent networks to provide our customers with full lifecycle solutions around IT infrastructure, also remains a priority in support of our strategy.

The leadership teams are focused on ensuring that the Group remains at the forefront of these emerging technology trends, so that we can support our customers, partners and employees to leverage these capabilities to the fullest extent to build resilience and grow.

Performance overview

The Group achieved a very strong performance in FY25 with all divisions improving their profitability and cash generation.

Westcon International continued on its multi-year trajectory of increasing gross profit and margins. Logicalis International achieved an exceptional year with strong margins and improved profitability across all its regions.

For Logicalis Latin America, FY25 was a turnround year in which an extensive restructuring and reshaping of the business was completed with improved performance starting to come through.

The Group's gross profit increased 5.6% to US$910 million compared to US$862 million in the prior year. Adjusted EBITDA rose 28.2% to US$246.2 million compared to US$192.1 million in the prior year. Underlying earnings per share was 30.5 US cents per share compared to 17.1 US cents in FY24 (recalculated as a result of the update to the underlying earnings definition as described in the five-year review).

Strategically, all three divisions further diversified their revenue streams and increased the proportion of recurring revenue earned.

Continued excellent working capital management by all the divisions enabled the achievement of strong cash generation.

Strategic Review progress

The Strategic Review continues to focus on enhancing shareholder returns over the medium term. The review aims to boost the competitiveness and profitability of subsidiaries and operating divisions through a combination of corporate initiatives and business development efforts.

The management incentive schemes for Logicalis International and Westcon International implemented during the previous financial year are focused on maximising shareholder value and designed to achieve strong alignment. Key individuals in the divisional leadership teams have invested their own funds to become shareholders in their businesses alongside Datatec at fair value. Their investment will only materialise at the same time as Datatec through future value realisation events.

The executive directors of Datatec do not participate in these divisional management incentive plans.

During FY25, Datatec broadened its investor relations programme and was admitted to the OTCQX trading platform in the US to increase international investor access.

In November 2024, Datatec initiated a share repurchase programme under the terms of the authority provided by shareholders at the 2024 Annual General Meeting. Shares repurchased in this way will be cancelled as issued shares and will revert to authorised but unissued share capital. A resolution is presented to shareholders at the 2025 Annual General Meeting to provide authority for the Board to conduct a further share repurchase if deemed appropriate.

Dividends

The implementation of the new management incentive plans in some of the divisions has resulted in upstreaming of cash to the parent company in the form of returns on fixed return equity instruments (loan notes). Given that there is access to more cash at the parent company, the Board decided to change the dividend cover policy to a two-times cover (previously three-times cover) relative to underlying earnings when declaring ordinary dividends.

On 24 October 2024, the Board declared an interim dividend of 75 ZAR cents (approximately 4 US cents) This amounted to ZAR175 million in total.

On 27 May 2025, the Board declared a final dividend for FY25 of 200 ZAR cents per share, equivalent to approximately 11 US cents per share amounting to ZAR472.4 million in total.

The total FY25 dividend was thus 275 ZAR cents per share, approximately 15 US cents per share, in line with our new dividend cover policy of maintaining two-times cover in relation to underlying earnings per share. This amounts to ZAR647 million in total being approximately US$36 million.

In accordance with our normal practice, the dividends have been structured as a cash dividend with a scrip distribution alternative.

Commitment to sustainable long-term performance

The Board recognises that applying sustainable practices is critical to safeguard stakeholder interests, facilitate effective decision-making and promote positive long-term performance. Our shared-value responsible business strategy continues to deliver results, and this year for the first time we are publishing a standalone responsible business report.

We invite you to access the report at www.datatec.com/annual-reports.php.

FY25 saw the completion of our recent Board evolution process with Colin Jones joining the Board on 3 June 2024 and Stephen Davidson retiring at the AGM on 31 July 2024 after 18 years of service as a non-executive director of Datatec.

Johnson Njeke has notified the Company of his intention to retire from the Board on 31 December 2025. He has served as an independent non-executive director of Datatec for nine years and has been Chair of the Audit, Risk and Compliance Committee for much of that time. Johnson brought a wealth of experience to the Board and his wise counsel and continuing contributions are greatly appreciated. We are pleased he will continue to serve until the end of 2025 and wish him well for 2026 and beyond.

Our commitment to building relationships with all stakeholders remains at the core of our engagement approach with shareholders. In January 2025, Deepa Sita, Remuneration Committee Chair, and I held a series of face-to-face shareholder meetings on ESG-related matters to ensure continuing alignment between Datatec and its shareholders.

We encourage our shareholders to attend the AGM on 31 July 2025 which is being held as a virtual meeting to allow broad participation.

Outlook

Datatec's products and solutions are ideally positioned to support our customers in navigating an increasingly complex environment. We are well-placed to capitalise on the demand, supporting our expectations that our operations will deliver further improved financial performance in FY26.

The Board continues to assess opportunities to close the valuation gap and has implemented several initiatives in the past year, with positive results. We will remain focused on unlocking shareholder value through our ongoing Strategic Review.

In closing, I would like to extend my sincere thanks to our Group CEO, Jens Montanana and the leadership team as well as all our employees and partners for their contributions and hard work over the past financial year. I would also like to thank the non-executive directors for their continued commitment to the Company. Last but not least, I am grateful to our shareholders and customers for their continued support.

Maya Makanjee

Chair

27 June 2025