RS Group Full-Year Report 2022

Revenue

Group revenue increased by 17% to £2,982.3 million. Like-for-like growth was 10% after adjusting for the £54.0 million impact of acquisitions, £116.6 million from favourable exchange rate movements and a negative impact of
£10.6 million from fewer trading days. Revenue momentum slowed during the year, with second half like-for-like
revenue growth of 4%, after 16% in the first half, due to tougher comparatives and the more challenging macroeconomic environment which has resulted in lower demand.

Gross margin

Group gross margin increased 1.1 percentage points to 45.3%. Like-for-like gross margin improvement was 1.8 percentage points excluding the dilutive impact from exchange rates and our recent acquisitions. The dilutiveimpact from acquisitions, in part, reflects the lower digital participation within the acquired businesses compared to the rest of the Group. We expect this dilutive impact, on a full-year basis, to reduce over time as integration continues. During the year we benefited from a lagging effect in our cost of sales due to our low inventory turn and a more constrained electronics supply chain for most of the year providing pricing opportunities. The gross margin also benefited from our continued focus on gross margin optimisation through direct procurement initiatives, commercial discipline, discount policies and expanding our own-brand ranges.

Operating costs

Total operating costs, which include regional and central costs, increased by 18%. Excluding amortisation and
impairment of acquired intangibles and acquisition-related items, total adjusted operating costs increased by 18%,
13% on a like-for-like basis.