UPDATE ON STRATEGY & MEDIUM-TERM FINANCIAL TARGETS AND
ANNOUNCEMENT OF TWO BOLT-ON ACQUISITIONS
Rexel, a global leader in the professional
distribution of products and services for the energy world, is
holding an Investor Day today in Paris, during which it will
provide an update on its medium-term strategy and financial
targets. In addition, it is announcing two bolt-on
acquisitions.
STRATEGY UPDATE
Staying the course and transforming for
success in a changing energy world
Despite headwinds in key markets, Rexel has
demonstrated continued resilience in performance and made
significant progress in the implementation of its "Energy in
Motion" company plan announced in May 2012.
Rexel's roadmap is structured around four
business imperatives:
- Accelerating strategic high-growth
initiatives
The strategic high-growth initiatives presented
in May 2012 have proven their relevance and Rexel will continue to
develop:
- High-potential business categories, in
particular Energy Efficiency, Building Automation (incl. Home
Automation) and Renewable Energies,
- International customers and projects,
- Dedicated vertical markets, specifically Oil
& Gas and Mining.
With the exception of Renewable Energies and
Mining, which have been negatively impacted by changes in
government policies and adverse market conditions, all other
segments have significantly outperformed the market and posted high
single- to double-digit growth.
- Enhancing customer-centricity for mainstream organic
growth
Rexel continues to roll-out its
customer-centricity model through advanced and innovative methods
and tools to:
- Provide customized project solutions,
- Implement multi-channel customer relationship
management,
- Create competitive differentiation through
e-business.
Through this customer-centricity model, Rexel
aims to broaden its active customer base, to multiply the number of
touch points per customer and to increase the number and value of
transactions per touch point. This will drive both sales and margin
growth in the mainstream electrical distribution business.
- Boosting growth through targeted
acquisitions
Acquisitions remain a key driver, with around
€650 million invested since the beginning of 2012. Two strategic
acquisitions, Platt and Munro, significantly expanded the Group's
footprint in the key US market as well as its Energy Efficiency
portfolio, while other bolt-on acquisitions in Europe, Asia and
Latin America also contributed as part of a focused M&A
strategy to:
- Gain market share and develop synergies in key mature
countries,
- Increase footprint in developing markets,
- Extend portfolio of value-added services in key
vertical markets.
- Driving operational excellence as an enabler for
profitable growth
While the Group remains focused on gross margin
discipline and tight cost control, Rexel's program to structurally
embed operational excellence is well underway and covers
organizational simplification, further harmonization and
consolidation of its IT platform, accelerated optimization of its
logistics network and supply chain effectiveness measures. Through
the combination of these initiatives, Rexel targets a continuous
improvement in customer service, asset utilization and cost
productivity.
MEDIUM-TERM FINANCIAL
TARGETS
By accelerating its strategic high-growth
initiatives and deploying its customer-centricity model in its
mainstream electrical distribution business, Rexel's
organic sales growth will outperform the markets in which it
operates.
In addition, Rexel will remain a leading market
consolidator, allocating an average annual budget of around
€500 million to acquisitions, which will contribute on average 3%
to 5% of additional sales per annum.
On the basis of a gradual recovery in sales,
combined with its capability to generate c. 10 basis points of
EBITA margin improvement for each percentage point of sales growth,
Rexel targets an adjusted EBITA margin of around 6.5% in
the medium-term (between 3 and 5 years, depending on the
speed and strength of the recovery in the Group's key markets).
Thanks to the low capital intensity of its
business model and effective working capital management,
Rexel will continue to generate strong free cash-flow
before interest and tax of at least 75% of EBITDA and after
interest and tax of around 40% of EBITDA, allowing continued
investment in acquisitions and the payment of an attractive
dividend to shareholders representing at least 40% of recurring net
income.
Rexel also reiterates its commitment to
a sound and balanced financial structure, with a
net-debt-to-EBITDA ratio not exceeding 3 times.
TWO BOLT-ON ACQUISITIONS
Rexel also announces two acquisitions that
expand its footprint in Asia and accelerate the development of its
high-growth initiatives.
Acquisition of QT Lighting in Thailand,
allowing Rexel to become the Nr. 3 player in one of the most
attractive markets in Asia Based in Bangkok, QT Lighting
is one of the largest electrical distributors in the fast-growing
Thai market. With 5 branches spread throughout Thailand, QT
Lighting mainly addresses the industrial and commercial end-markets
with a strong focus on OEM, MRO and Lighting. QT Lighting generated
sales of c. 35 million euros in the last fiscal year. The
transaction, subject to customary conditions, should close on
November 29.
Acquisition of Esabora in France,
accelerating the development of value-added digital
solutions Esabora is a French company editing advanced
software tools for electrical contractors and installers. This
acquisition will provide Rexel's customer base with innovative
solutions to accelerate growth in Energy Efficicency and Building
Automation. Esabora complements the 2011 acquisition of Inoveha and
will contribute to the creation of a digital platform accelerating
Rexel's transformation from a product distributor to a solution
provider. Esabora generated sales of c. 2 million euros in the last
fiscal year. The transaction, subject to customary conditions,
should close in January.
Rudy PROVOOST, Chairman of the Management Board and CEO,
said:
"Through the systematic implementation of its
"Energy in Motion" plan, Rexel is demonstrating resilience in
performance and staying the course in transforming the company for
success in a changing energy world. Over the medium-term, we are
committed to further strengthening our market position through a
combination of organic and external growth, and to increasing our
adjusted EBITA margin to a level of around 6.5%. We will continue
to generate strong cash-flow in order to maintain an attractive
dividend policy and invest in M&A, while maintaining a solid
financial structure. By accelerating our strategic high-growth
initiatives, capitalizing on our customer-centricity model for
mainstream growth, boosting external growth and enhancing
operational excellence, we are confident that we are focused on the
right drivers for sustained value creation for all
stakeholders."
Rexel, a global leader in the professional
distribution of products and services for the energy world,
addresses three main markets - industrial, commercial and
residential. The Group supports customers around the globe,
wherever they are, to create value and run their businesses better.
With a network of some 2,300 branches in 37 countries, and over
31,000 employees, Rexel's sales were €13.4 billion in 2012. Its
main shareholders are an investor group led by Clayton, Dubilier
& Rice, Eurazeo and BAML Capital Partners. Rexel is listed on
the Eurolist market of Euronext Paris (compartment A, ticker RXL,
ISIN code FR0010451203). It is included in the following indices:
SBF 120, CAC Mid 100, CAC AllTrade, CAC AllShares, FTSE EuroMid,
STOXX600. Rexel is also part of the following SRI indices: DJSI
Europe, FTSE4Good Europe & Global, STOXX Europe Sustainability,
EURO STOXX Sustainability, Euronext Vigeo Europe 120 and ESI
Excellence Europe. Finally, Rexel is included on the Ethibel
EXCELLENCE Investment Registers in recognition of its performance
in corporate social responsibility (CSR). For more information,
visit Rexel's web site at www.rexel.com
Contacts
Financial Analysts / Investors |
Press |
Marc MAILLET |
Pénélope LINAGE |
+33 1 42 85 76 12 |
+33 1 42 85 76 28 |
marc.maillet@rexel.com |
penelope.linage@rexel.com |
Florence MEILHAC |
Brunswick: Thomas
KAMM |
+33 1 42 85 57 61 |
+33 1 53 96 83 92 |
florence.meilhac@rexel.com |
tkamm@brunswickgroup.com |
HUG#1745717
INVESTOR DAY: http://hugin.info/143564/R/1745717/587560.pdf.
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