Why Invest

The North American IT solutions market size for business customers exceeds $1 trillion and is expected to grow at a 7% CAGR from 2021 to 2025¹. We have calculated our total 2022 addressable market to be approximately $300 billion (in North America)².

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^{1. Source: Gartner, Gartner Market Data Book, 4Q21 Update, December 2021. 2 Source: Company data}

Our leading sales and technical capabilities are primarily focused on three highly attractive IT solutions sub-sectors driven by: accelerating growth and adoption of the cloud and shift away from on-premises infrastructure, increasing demand for remote work capabilities accelerated by the COVID-19 pandemic, and increasing demand for seamlessly integrated software applications. All of our solutions are underpinned by our securities offerings.

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^{1 Source: Gartner, Gartner Market Data Book, 4Q21 Update, December 2021. 2 Source: Gartner, Forecast IT Services, Worldwide, 4Q21 Update, December 2021 3 Source: Gartner, Forecast: Enterprise Application Software, Worldwide, 2019-2025, 4Q21 Update Published 21 December 2021 4 Source: Gartner, Forecast: Information Security and Risk Management, Worldwide, 2019-2025, 4Q21 Update 5 Source: Gartner Software Industry Transformation Requires Software Asset Management Programs to Follow Suit, February 2021}

Our go-to-market strategy is focused on supporting prospective customers throughout the evolution of their IT environment. Our salesforce has three guiding principles when it comes to customer engagement and driving ROI:

1. Reduce: Find ways to save money and streamline processes;
2. Optimize: Help our customers get the most out of their environment;
3. Innovate: Have transformative conversations regarding modernizing applications and automation.

We strive to become a trusted partner to our customers and add strategic value that can enable digital transformation beyond just minimal IT capabilities. Without these capabilities, customers may find it challenging to navigate the complexity of the technology and the skills gap. Our role as a trusted partner has grown significantly over the years, driving increased margin per customer and customer retention.

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^{Data is for FY2021 (except FY2012 Gross profit). 1 Margin per Customer reflects mixed currency net sales less cost of sales, exclusive of technology partner incentives, divided by the number of “Customers”. 2 Customer retention defined as percentage of Customers retained at the end of 2020 divided by the same Customers at the end of 2020. 3 Customers who purchase one of: Keystone Advanced / O365 / Managed Cloud / Network + Datacenter / Custom, SaaS / IaaS Services or Consulting Services, or who purchase a broad array of services and solutions across Softchoice’s offerings. Keystone Services refer to Softchoice’s Managed Services offerings, which include: (1) Keystone Essential services providing warranty support for Cisco hardware and software, and NetApp hardware; (2) Keystone Advanced full Managed Services including remote monitoring, support and administration. 4 Customers who purchase services from Softchoice other than IT Solutions (e.g. O365 migration professional service or Keystone Essentials when purchased on its own and not as a bundle/array of IT Solutions)}

Our customers rely on us to understand their business challenges and opportunities:

• We are an IT solutions provider with deep technical capabilities that provides impartial, partner-agnostic advice to optimize the performance of our customers' IT environments. In recent years, we have expanded our role as a strategic partner to our customers, which has brought us closer to them and their needs, and driven growth in gross profit per customer and longer customer relationships.

Our technology partners benefit from our access to customer knowledge and corresponding unique market insights:

• We have the ability to directly reach a large customer base, ensure adequate technical integration, improve the customer experience and drive enterprise-wide adoption. Our technology partnerships are highly symbiotic, as evidenced by the training and certification programs that technology partners provide us to advance our capabilities.

We are significantly larger than most of our competitors, with different technical resources, technology partners and a broader offering of IT solutions.

Competition is based on the ability to tailor specific, integrated IT solutions to customer needs, the quality and breadth of product and service offerings, the knowledge and expertise of the salesforce, customer service, price, product availability, speed of delivery and credit.

We believe that Softchoice is well-positioned to continue to grow due to our software focus, holistic IT solutions, and insights-based delivery.

We have a proven commercial model that has fueled our historic growth and that we believe positions us well for greater success in the future. This is balanced between our internal focus of adding selling capacity and driving sales productivity improvements, and our external focus of growing with existing and new customers and strengthening our technology partnerships.

We have a proven blueprint for hiring, training, and retaining our people. Furthermore, as technology evolves, we evolve with it. We are constantly investing in the development of new IT solution capabilities and new technology partnerships to provide more value to our existing and prospective customers.

Our customer base is well diversified across the SMB, Commercial and Enterprise customer categories, with limited vertical and customer concentration, with our top 10 customers representing approximately 12% of our gross profit in 2021.

We believe our customer categories are highly attractive due to the large opportunity for future wallet share expansion. Our SMB and Commercial customers usually have significant IT requirements but lack the in-house technical expertise, whereas our Enterprise customers seek sophisticated IT solutions to combat growing operational complexity. Our enterprise lifecycle management approach to serving customers positions us to expand our wallet share over time and creates a strategic relationship with our customers.

Our Revenue Retention Rate² was 113% in 2021, and over 70% of our gross profit comes from customers that have been with us for more than five years. However, there remains significant opportunity to continue to grow within our existing Customer base given that we estimate that we have an approximately 14% share in our Customers’ IT solutions expenditures (average across all Customer categories).

We also see significant opportunities for new customer acquisitions given the fragmented nature of the IT solutions market. We serve approximately 4% of our estimated target market of approximately 213,000 organizations.

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^{1. Data is for FY2021. 1 Softchoice generally aligns their sales channels to the defined customer categories and reports financial results accordingly. However, certain customers in specified categories are covered by other sales channels 2. Non-IFRS Measure. See ‘Non-IFRS Measures and Other Measures’ in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2021 and December 31, 2020.}

Our growth agenda is supported by the meaningful benefits of Project Monarch, our IT-enabled business transformation initiative that went live in September 2020.

The primary objective of Project Monarch is to re-engineer critical business processes and implement best-in-class technology architecture to support future growth and margin expansion through process streamlining and automation, pricing alignment, and procurement savings.

We now have scalable end-to-end business processes supported by a best-in-class technology architecture. This will enable our people to drive further efficiency and productivity and deliver superior service to our customers.

We have invested nearly $50 million into Project Monarch since Fiscal 2018 and our detailed plan anticipates significant benefits to our gross profit and margin profile, and significant improvements to customer experience, employee experience and the scalability of our business.