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CDW weathering Brexit and Covid-19 storms

Channel player CDW shares details of its trading as it wraps up on 2020

CDW has revealed that it managed to come through 2020 with profits and revenues increasing.

Sharing its 2020 results, the channel player reported that for the full year it delivered a 2.4% increase in net sales to $18.5bn and an 8% rise in net income. In the fourth quarter, net sales were $5bn, 11% above last year, and net income improved by 28.4%.

Speaking to analysts, CDW CEO Chris Leahy said its diverse portfolio and the range of markets it serves had helped it get through “an extraordinary year”.

“During the year, our team helped customers across the full IT solution stack in the full IT lifecycle, from client devices to cloud, and from design to managed services. We executed against our strategy and continued to invest in high-growth solutions and services capabilities,” she said.

The firm also made three acquisitions to support that strategy in the year, including IGNW and Southern Dakota Solutions.

CDW’s public sector and education business increased dramatically as coronavirus-related demand fuelled those sectors. The small business market declined by mid-single digits with notebooks returning to growth.

Leahy said it was continuing to pursue a three-pronged strategy and that, along with its diverse portfolio and range of markets it operated in, had put it in good shape despite the coronavirus pandemic.

“Our three-part strategy for growth is, first, to acquire new customers and capture share; second, enhance our solutions capabilities; and third, expand our services capabilities. Each pillar is crucial to our ability to profitably advise, design, orchestrate and manage integrated technology solutions our customers want and need today and in the future,” she said.

When it came to detailing the performance of the UK business, the firm was not only dealing with the pandemic, but also Brexit.

“UK net sales increased in mid-single digits in constant currency [and performance] was driven by strong education demand to enable remote learning and healthcare spending to address the pandemic, with softer corporate performance,” she said.

“In the UK, there was some pull-up in customer demand before the announcement of the agreement with the European Union as customers prepared for a potential hard exit. Over the past several weeks, the UK team has executed against its well-planned Brexit mitigation strategy and has done a great job in helping customers navigate through the complexity of the new agreement,” she added.

The firm has also been working with the London Grid for Learning to help support children with home schooling. To date, CDW has shipped 100,000 units to hundreds of schools across the UK.

Looking ahead, the firm is expecting recovery to be supported by the ongoing roll-out of the Covid vaccine and by government stimulus, particularly in the US.

“Our international businesses are more weighted to corporate customers, so the pace of recovery will be driven by the macro environments in the UK and Canada,” said Collin Kebo, senior vice-president and chief financial officer at CDW.

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