SECOND QUARTER SALES & H1 2022 RESULTS
|
SECOND QUARTER SALES & H1 2022 RESULTS: RECORD
PERFORMANCE Robust activity with same-day sales
growth of +12.0% in Q2 22Historically
high adj EBITA, results and &
FCF for a first half FY 2022 upgraded guidance
confirmed |
→ Sales of €4,705.4m in Q2
2022, up +12.0% on a same-day basis.
Robust activity notably driven by electrification trends, increased
digital penetration, volume growth in North America and higher
non-cable selling price in all geographies
→ Record H1 adj. EBITA
of €703.7m up +63.4% and adjusted EBITA margin at 7.7% (up +228
bps) from robust activity (actual-day sales growth of
+15.3%) coupled with continued effects of our operational
excellence program as well as price pass-through. Adj. EBITA
includes c. 86 bps of positive one-off effects
from inventory price inflation on non-cable products, net of higher
performance-linked bonuses
→ Recurring net income of €471.1
million, up +94.9% in H1 2022, reaching an all-time
high
→ Record positive Free Cash Flow before
interest and tax of €231.6m in H1 2022 (€116.3m in H1
2021). Lowest-ever first-half indebtedness ratio at
1.26x
→ FY 22 guidance confirmed, supported by
record-high backlog, easier base effect in Europe in H2 and China
back to positive territory
→ Active portfolio management with 2
acquisitions and 2 disposals, fully in line with our
strategy. The combined net effect is positive on sales,
profitability and ROCE
→ SBTi validated our 2030 & 2050 Greenhouse Gas
emission targets to reach net-zero across the value
chain
→ Implementing Power Up 2025
plan to strengthen the organization and further increase
the resilience of our model
Key figures1 (€m) -
Actual |
Q2 2022 |
YoY change |
H1 2022 |
YoY change |
Sales on
a reported basis |
4,705.4 |
+26.3% |
9,082.8 |
+28.7% |
On a constant and
actual-day basis |
|
+12.1% |
|
+15.3% |
On a constant and
same-day basis |
|
+12.0% |
|
+13.9% |
Gross
margin2,3 |
|
|
2,399.2 |
+21.3% |
As a percentage
of sales |
|
|
26.4% |
131 bps |
Adjusted
EBITA2 |
|
|
703.7 |
+63.4% |
As a percentage
of sales |
|
|
7.7% |
228 bps |
Reported
EBITA |
|
|
708.7 |
+60.2% |
Operating
income |
|
|
683.6 |
+57.1% |
Net
income |
|
|
459.8 |
+69.9% |
Recurring
net income |
|
|
471.1 |
+94.9% |
FCF
before interest and tax |
|
|
231.6 |
+99.1% |
Net debt at end of period |
|
|
1,811.3 |
€288m increase |
1 See definition in the Glossary section of this document 2
Change at comparable scope of consolidation 3 Adjusted for
non-recurring copper effect
Guillaume TEXIER, Chief Executive Officer, said:
“I am very pleased that Rexel again posted record results in H1
2022, demonstrating the robustness of our business model in an
environment still marked by solid demand, but also high product
cost increases and continued supply chain challenges. The
electrification trends that we have highlighted during our Capital
Markets Day are clearly at play and benefiting us. To reinforce
Rexel even further in an environment of economic uncertainty, we
started actively implementing our Power Up 2025 strategic plan. By
continuously increasing digital sales, focusing on electrification
trends and ESG, and concentrating our portfolio on our strengths,
as we have done with two acquisitions and two divestments, we will
continue to enhance our growth profile and further reinforce our
resilience and our agility.” |
FINANCIAL REVIEW FOR THE PERIOD ENDED JUNE 30,
2022 |
- First-half 2022
financial report was authorized for issue by the Board of Directors
on July 27, 2022. It has been subjected to a limited review by
statutory auditors.
- The
following terms: Reported EBITA, Adjusted EBITA, EBITDA, EBITDAaL,
Recurring net income, Free Cash Flow and Net Debt are defined in
the Glossary section of this document.
- Unless
otherwise stated, all comments are on a constant and adjusted basis
and, for sales, at same number of working days.
SALES
In Q2, sales were up +26.3% year-on-year
on a reported basis and up +12.0% on a constant and same-day
basis.
In the second-quarter, Rexel posted sales of
€4,705.4 million, up +26.3% on a reported basis, including:
- A positive currency
effect of €176.6 million (i.e. +4.7% of Q2 2021 sales), mainly due
to the appreciation of the US and Canadian dollars;
- A
positive net scope effect of €295.5 million (i.e. +7.9% of Q2 2021
sales), mainly resulting from the acquisition of Mayer in the
US;
- An
almost neutral calendar effect of +0.1%.
Key figures (€m) |
Q2 2022 |
YoY change |
H1 2022 |
YoY change |
Sales on
a reported basis |
4,705.4 |
+26.3% |
9,082.8 |
+28.7% |
On a constant and
actual-day basis |
|
+12.1% |
|
+15.3% |
On a constant and same-day basis |
|
+12.0% |
|
+13.9% |
Sales were up +12.0% a constant and same-day
basis (or +12.1% on a constant and actual-day basis), notably
driven by robust volumes in North America and additional selling
price increases on non-cable products in all geographies,
offsetting the situation in China and a more difficult volume base
effect in Europe.
- The same-day sales
growth of +12.0% in the quarter resulted from an +0.6% rise in
volumes, an increase of 9.2% in the selling price of non-cable
products and 2.2% on cable products. More specifically,
- The non-cable
contribution of 9.2% was similar to the 9.1% posted in Q1 22,
thanks to additional price increases in the quarter that offset the
expected lower carryover effect of circa 130bps. While the
carryover effect will ease in H2 22 to converge towards zero in Q4
22, we anticipate further selling price increases in H2 22.
- The cable products
pricing contribution stood at 2.2% in Q2 22 compared to 4.1% in Q1
22, as the copper price rose sharply in Q2 21, creating a more
difficult comparable base. Based on the current copper price, we
anticipate the contribution to be lower and potentially negative in
H2 22.
- While volumes were
robust in the quarter in North America, growing by +5.1%, volumes
in Asia were down (23.0)% due to the lockdown in China in April/May
and Europe faced the most difficult base effect as business
recovered sharply post-Covid in Q2 21. Without China, group volumes
would have grown by +1.7% in Q2 (vs. +0.6% reported).
- Our teams again
showed agility to ensure business continuity in an environment that
remains marked by labor and supply chain tensions (notably on
products embedding electronics components)
- We posted further
growth in digitalization in all three geographies, with digital
sales now representing 25.0% of sales, up +244bps compared to Q2
2021. Trends were positive in Europe (34.9% of sales, an increase
of +109 bps), Asia-Pacific (up +25bps, now representing 4.8% of
sales) and North America (16.7% of sales, an increase of +467 bps)
with the strong progression in the US fueled by the transformation
journey.
In addition, during the quarter, we have
also:
- Accelerated
the development of our webshop search engine, customer seamless
experience (Rexel Easy program) and email to EDI (Esker project
started in 7 countries)
- Scaled
up AI solutions deployment to fuel growth and performance with
increased scope of sales alerts, new roll outs of assortment
optimization in the US, and AI pricing in Switzerland
In H1 2022, Rexel posted sales of €9,082.8
million, up +28.7% on a reported basis. On a constant and same-day
basis, sales were up +13.9%, including a positive impact of +3.1%
from the change in copper-based cable prices (vs. a positive impact
of +4.6% in H1 2021) and a positive impact from non-cable copper
prices of +9.2%.
The +28.7% increase in sales on a reported basis
included:
- A positive currency
effect of €280.9 million (i.e. +4.0% of H1 2021 sales), mainly due
to the appreciation of the US and Canadian dollars;
- A
positive net scope effect of €535.4 million (i.e. +7.6% of H1 2021
sales), mainly resulting from the acquisition of Mayer in the
US;
- A
positive calendar effect of +1.4%.
Europe (50% of Group sales): +10.4% in
Q2 and +11.9% in H1, on a constant and same-day basis
In the second quarter, sales in Europe increased
by +10.5% on a reported basis, including a positive currency effect
of +0.3%, or €7.5 million, mainly due to the appreciation of the
Swiss Franc and the British pound against the euro and a limited
scope effect of (0.1)%, or €(3.2) million. On a constant and
same-day basis, sales were up +10.4%, including a slightly negative
volume contribution (0.5)%
Key figures (€m) |
Q2 2022 |
YoY change |
H1 2022 |
YoY change |
Europe |
2,370.2 |
+10.4% |
4,655.0 |
+11.9% |
France |
897.0 |
+7.6% |
1,762.5 |
+9.0% |
Scandinavia |
308.0 |
+9.3% |
586.4 |
+10.8% |
Benelux |
266.5 |
+16.1% |
524.1 |
+16.5% |
Germany |
241.2 |
+15.5% |
467.7 |
+16.2% |
UK |
195.8 |
+8.7% |
419.1 |
+13.4% |
Switzerland |
147.7 |
+3.6% |
293.0 |
+4.6% |
Italy |
43.9 |
+24.4% |
81.4 |
+18.9% |
- Sales in
France (38% of the region’s sales) posted solid
+7.6% growth on a difficult comparable base, driven by an increased
number of active customers and significant price increases. While
sales growth is tapering from Q1 22 due to a strong base effect, we
recorded further market share gains in the quarter. Q2 22 was
supported by strong demand in the industrial segment and, to a
lesser extent, in the commercial end-market, offsetting lower
growth in the residential market.
- Sales in
Scandinavia (13% of the region’s sales) were up
+9.3%, notably driven by commercial activity and strong demand in
photovoltaic products.
-
Benelux (11% of the region’s sales) was up +16.1%,
outperforming the market, with very strong growth in EV and PV. The
PV business growth was notably driven by the increase in energy
prices.
- Sales in
Germany (10% of the region’s sales) were up
+15.5%, gaining further market share. Demand is accelerating very
strongly in photovoltaics (above 200%) as a result of efforts to
increase the country's energy independence in the context of the
war in Ukraine.
- In
the UK (8% of the region’s sales), sales were up
by +8.7%, lower than in Q1 22 from a more difficult base effect,
notably in the commercial business. First-half 2022 benefited until
June from a contract with the Department of Education (school air
filtration and CO2 equipment) contributing for 200bps in Q2
22.
- Sales in
Switzerland (6% of the region’s sales) were up
+3.6%, lower than Q1 22 on slightly lower building installation and
cable business.
- Sales in
Italy (2% of the region's sales) were up +24.4% in
Q2 22, accelerating compared to Q1 22 and confirming that the
recent strategic decisions are paying off.
North America (42% of Group sales):
+17.2% in Q2 and +19.2% in H1 on a constant and same-day
basis
In the second quarter, sales in North America
were up +59.8% on a reported basis, including a positive currency
effect of +11.7%, or €144.8 million, due to the appreciation of the
US and Canadian dollars against the euro and a positive scope
effect of €301.5 million, or +24.3%, from the acquisition of Mayer
in the US. On a constant and same-day basis, sales were up +17.2%,
including +5.1% volume growth.
Key figures (€m) |
Q2 2022 |
YoY change |
H1 2022 |
YoY change |
North America |
1,986.1 |
+17.2% |
3,750.7 |
+19.2% |
Total US |
1,602.3 |
+17.9% |
3,034.6 |
+20.4% |
Mayer |
|
+8.3% |
|
+17.0% |
US excl. Mayer |
|
+21.2% |
|
+21.3% |
Mountain Plains |
|
+36.7% |
|
+35.0% |
Gulf Central |
|
+33.7% |
|
+37.3% |
Northwest |
|
+21.9% |
|
+22.7% |
Midwest |
|
+21.0% |
|
+16.8% |
Florida |
|
+20.9% |
|
+21.8% |
California |
|
+12.9% |
|
+13.2% |
Southeast |
|
+11.8% |
|
+13.9% |
Northeast |
|
+7.7% |
|
+3.5% |
Canada |
383.8 |
+14.0% |
716.1 |
+14.4% |
- In the
US (81% of the region’s sales), sales were up +17.9% in Q2
22.
- The
three end-markets grew at a similar pace compared to Q2 21. When
compared to their pre-crisis level and looking at the different
markets, growth potential is higher in the industrial market and,
to a lesser extent, commercial
- We
benefited from strong overall momentum in the Mountain Plains and
Gulf Central regions, notably driven by Oil & Gas, as well as
robust growth in commercial
- The Mayer
integration is going well and performance is progressing above
expectations, up +8.3%, on a more difficult base effect as Mayer
recovered earlier from Covid in 2021. We are on track to achieve
our upgraded synergy ambitions
- The backlog
remains very important, up +81% year-on-year at end June yoy,
representing c. 3 months of sales
- In
Canada (19% of the region’s sales), sales grew by
+14.0% on a same-day basis, notably thanks to robust performance
driven by industrial end-markets (O&G and mining specifically),
offsetting stable demand in residential. Backlog is also very
strong, representing circa 4 months of sales.
Asia-Pacific (8% of Group sales): (2.6)% in Q2 and +1.2%
in H1 on a constant and same-day basis
In the second-quarter, sales in Asia-Pacific
were up +3.3% on a reported basis, including a positive currency
effect of +7.2%, or €24.3 million, due to the appreciation of all
currencies against the euro and more specifically the Australian
dollar and the Chinese renminbi. On a constant and same-day basis,
sales were down (2.6)%.
Key figures (€m) |
Q2 2022 |
YoY change |
H1 2022 |
YoY change |
Asia-Pacific |
349.1 |
(2.6) % |
677.1 |
+1.2% |
Australia |
152.4 |
+5.0% |
283.7 |
+4.6% |
China |
143.7 |
(10.9) % |
289.1 |
(3.7) % |
- In the Pacific (53% of the
region’s sales), sales were up +4.7% on a constant and same-day
basis:
-
In Australia (83% of Pacific’s sales), sales were
up +5.0%, improving compared to Q1 thanks to robust demand in
commercial and residential.
- In Asia (47% of the region’s
sales), sales were down (9.7)% on a constant and same-day basis:
- In China (87% of
Asia’s sales), sales were down (10.9)%, impacted by the severe
lockdown in April & May and product shortages. Activity was
back in positive territory in June, driven by the gradual recovery
in activity.
PROFITABILITY
Adjusted EBITA margin at 7.7% in H1
2022, up 228 bps compared to H1 2021
H1 2022 (€m) |
Europe |
North America |
Asia-Pacific |
Holding |
Group |
Sales
& AD growth |
4,655 |
+12.6% |
3,751 |
+22.2% |
677 |
+1.2% |
|
9,083 |
+15.3% |
Constant & SD basis |
|
+11.9% |
|
+19.2% |
|
+1.2% |
|
|
+13.9% |
Gross margin |
1,309 |
|
962 |
|
129 |
|
|
2,399 |
|
% of sales |
28.1% |
79 bps |
25.6% |
178 bps |
19.0% |
189 bps |
|
26.4% |
131 bps |
Adj. EBITA |
389 |
|
319 |
|
9 |
|
(14) |
704 |
|
% of sales |
8.4% |
149 bps |
8.5% |
297 bps |
1.4% |
57 bps |
|
7.7% |
228 bps |
Group contribution |
|
84 bps |
|
123 bps |
|
4 bps |
16 bps |
|
228 bps |
The +15.3% actual sales growth in H1 22
translated into a gross margin improvement of +131 bps
year-on-year, at 26.4% of sales, and an adjusted EBITA margin at
7.7%, up +228 bps year-on-year, including a non-recurring impact of
c.86 bps that benefited H1 2022 (c.109 bps of positive one-off from
inventory price inflation on non-cable products net of a negative
23bps impact from higher performance-linked bonuses).
The progression is supported by:
- Our ability to
pass through prices increases
- The synergies
extracted from the five acquisitions completed in 2021, notably
Mayer in the US
- The result of our
transformation, particularly digitalization, which translates into
above-market sales growth, improved customer service and higher
productivity
Those tailwinds more than offset opex inflation
notably on Salaries & Benefits and Transportation costs.
The graph below details the +228 bps improvement
in Adjusted EBITA margin:
See bridge in the PDF file attached.
By geography:
-
Europe:
- Gross
margin stood at 28.1% of sales, up +79 bps year-on-year, from
pricing power.
- Adjusted
EBITA margin was up +149 bps in the first half, at 8.4% of sales
despite higher opex. It includes c. 90bps of non-recurring impact
from inventory price inflation on non-cable products, net of higher
performance-linked bonuses.
- North
America:
- Gross
margin was up +178 bps vs. H1 2021 at 25.6% of sales, illustrating
the benefits of Mayer's integration and our capacity to pass
through prices increases as well as a positive channel mix
(proximity vs project) in the US.
- Adjusted
EBITA margin was up +297 bps at 8.5% of sales, benefiting from
Mayer synergies (contributing for c. 65bps), the strong momentum in
sales growth and a favorable calendar effect in H1 22 (19 bps),
which will be reversed in H2 22. It includes c. 95 bps of
non-recurring impact from inventory price inflation on non-cable
products, net of higher performance-linked bonuses.
-
Asia-Pacific:
- Gross
margin was up +189 bps year-on-year at 19.0% of sales, from
improvement in Pacific and a positive mix effect as China sales
dropped due to the lockdown.
- Adjusted
EBITA margin was up +57 bps, at 1.4% of sales, driven by better
profitability in Pacific. We anticipate an increase in
profitability in H2 22.
- At corporate
level, adjusted EBITA amounted to €(13.8) million,
improving versus last year’s H1 level of €(28.5)million, due to
lower centrally-hosted projects.
As a result, adjusted EBITA stood at €703.7
million, up +63.4%, in H1 2022 and reported EBITA stood at €708.7
million (including a positive one-off copper effect of €+5.0
million), up +60.2% year-on-year.
Focusing on the bridge from EBITDA to Reported
EBITA:
- EBITDA
margin was up 130bps at 9.6%
-
Depreciation of Right of Use has increased as a result of the
integration of the acquisitions completed in 2021
-
Depreciation and Amortization stood at €(56.2) million, implying a
stable 0.6% of sales in the first half.
Key figures (€m) |
H1 2021 |
H1 2022 |
YoY change |
EBITDA |
588.2 |
872.5 |
+48.3% |
% EBITDA
margin |
8.3% |
9.6% |
|
Depreciation
Right of Use (IFRS 16) |
(92.8) |
(107.6) |
|
Depreciation and
amortization |
(53.0) |
(56.2) |
|
Reported EBITA |
442.4 |
708.7 |
+60.2% |
NET INCOME
Net income of €459.8 million in H1
2022
Recurring net income up
+94.9% to €471.1 million in H1 2022
Operating income in the half-year stood at
€683.6 million, up from €435.1 million in H1 2021.
- Amortization of
intangible assets resulting from purchase price allocation amounted
to €(5.7) million (vs. €(3.1) million in H1 2021)
- Other income and expenses amounted
to a net charge of €(19.4) million (vs. a net charge of €(4.2)
million in H1 2021) and included:
- €(9.5) million
impairment on IT development costs
- €(2.4) million of
restructuring costs (vs €(3.5) million in H1 2021)
- €(3.0)
million of costs for the disposal of our Russian business to its
management. As a reminder, we have no remaining direct exposure to
Russia and Ukraine.
Net financial expenses in the half-year amounted
to €(51.9) million (vs. €(59.8) million in H1 2021), split as
follows:
- €(30.1) million
from financial cost before one-off expenses change, fair value of
derivatives and foreign exchange gains & losses in H1 22 vs
€(33.7) million in H1 2021, from lower cost of debt
- €(21.6)
million from interest on lease liabilities in H1 2022 vs €(20.0)
million in H1 2021
- €(5.1)
million from one-offs in H1 2021 from the early repayment of the
€500 million senior notes due in 2025 (coupon: 2.125%)
- Others
for €(0.2) million in H1 22 from change in fair-value of
derivatives, foreign exchange gains and losses, pensions vs €(1.0)
million in H1 21
- The
effective interest rate decreased to 2.01% in H1 2022 compared to
2.47% in H1 2021, largely from the refinancing of the €600 million
senior notes due in 2026 (coupon: 2.75%) in November 2021.
Income tax in the half-year represented a charge
of €(171.9) million (vs. €(104.7) million in H1 2021):
- The effective tax
rate stood at 27.2%, lower than in H1 2021 (27.9%) largely from a
lower tax rate in France (from 28.41% to 25.83%).
Net income in the half-year was €459.8 million
(vs. €270.6 million in H1 2021).
Recurring net income amounted to €471.1 million in H1 2022, up
+94.9% compared to H1 2021 (Appendix 3).
FINANCIAL STRUCTURE
Free cash-flow before interest and tax
of €231.6 million in H1 2022
Indebtedness ratio of 1.26x at June 30,
2022
In the half-year, free cash flow before interest
and tax was an inflow of €231.6 million (vs. an inflow of €116.3
million in H1 2021). This net inflow included:
- EBITDAaL
of €750.3 million (vs €476.4 million in H1 2021), including
€(122.2) million of lease payments in H1 2022
- An
outflow of €(454.4) million from change in working capital
(compared to an outflow of €(299.1) million in H1 2021), mainly to
support the sales recovery. The change in trade working capital
stood at €(369.2) million combined with an outflow of (85.2)
million from the change in non-trade working capital, mostly
explained by the non-recurring level of variable pay booked in
2021. Trade WCR stood at 14.9% of sales in H1 2022, 14bps above H1
2021 level, in a context of a disrupted global supply chain
- Lower cash outflow
from restructuring (€(4.4) million in H1 22 vs €(9.0) million in H1
2021)
- A higher level of
net capital expenditure (€(54.6) million vs. €(48.8) million in H1
2021). Gross capex stood at €53.3 million and represented 0.6% of
sales.
Below FCF before interest and tax, the cash flow
statement took into account:
- €(24.2) million of
net interest paid in H1 2022 (vs €(28.5) million paid in H1 2021).
H1 2021 was impacted by a €(5.1) million one off from the early
reimbursement of senior notes
- €(161.0) million of income tax paid in
the half-year, compared to €(57.1) million paid in H1 2021, from
higher performance. H1 2021 income tax paid benefited from cash
savings due to utilization of the remaining French tax losses
carried forward
- €7.5
million of financial investment
- €(230.1)
million of dividends paid for the year 2021 (€0.75 per share)
- €(64.4)
million of negative currency effects during the half-year (vs a
negative €(1.8) million in H1 2021) due to the strong appreciation
of the US Dollar.
At June 30, 2022:
- Net financial debt
increased by €288.3 million year-on-year at €1,811.3 million (vs
€1,523.0 million at June 30, 2021), from the acquisitions completed
in H2 2021, notably Mayer in the US.
- The indebtedness
ratio (Net financial debt/EBITDAaL), as calculated under the Senior
Credit Agreement terms, reached its lowest level ever at 1.26x,
significantly lower than the 1.79x at June 30, 2021.
On July 18th, 2022, taking into account our
recent transformation and updated mid-term guidance, S&P
upgraded our bond rating and our issuer rating to BB+.
With the launch of Power Up 2025, we are writing
a new strategic chapter aiming at solidifying our base and
accelerating our profitable growth by seizing opportunities from
rising electrification and enhancing our differentiation on
selected key topics.
This strategy will enhance our growth profile and also improve
Rexel’s resilience.
- With the first
pillar of the strategy ("Excel on fundamentals"), we strive for
operational excellence across the company, aiming to be leaner,
simpler and more efficient to enhance resilience. Strengthening our
platform is a key priority, especially important in the current
environment. The five topics of this pillar are: talent culture,
supplier relationships, supply chain & footprint, digital and
productivity. Applied to the current environment, we are
specifically focusing on resilience plans, with all countries
putting increased emphasis since Q1 on headcount control, inventory
quality control, credit control or mix optimization
- With the second
pillar of the strategy ("Strive to be a differentiated leader"), we
will focus on five areas where we believe Rexel can have a strong
competitive advantage in the short- and medium-term: data & AI,
advanced services, Energy solutions transition, ESG and M&A. By
doing so we will position ourselves to benefit from accelerating
and more resilient macro electrification trends.
ACTIVE PORTFOLIO MANAGEMENT |
Rexel announced 4 transactions to reinforce its
portfolio and its local footprint in key regions. They include
:
- Two
acquisitions of quality businesses in Belgium and US, highly
complementary with our existing footprint, as illustrated by the
high level of expected synergies
- The disposal
of Rexel's activities in two non-core countries, Spain and
Portugal.
The combined operations will contribute
positively to our sales, earnings and Return On Capital Employed in
year 1. More specifically, they will add c. €75m in sales (FY 2021)
on a net basis and be accretive in adjusted Ebita margin.
Acquisition of Trilec in
Belgium
On July 4th, Rexel Belgium closed the
acquisition of Trilec, a Belgian family-owned electrical
distributor operating mostly in Flanders, with 15 branches, 172
employees and a semi-automated distribution center. Trilec is a
high-quality asset with a number 3 position in Belgium, and €80m of
sales generated in 2021. Its commercial footprint and supply chain
organization are very complementary to our existing base, as
reflected by the high level of targeted synergies.
Acquisition of Horizon Solutions in the
US
On July 7th, Rexel USA signed a definitive
agreement to acquire Horizon Solutions headquartered in Rochester,
New York with 10 branches and 219 employees. The Industrial
automation business specialist generated sales of USD 170m in
2021.
With the acquisition, Rexel USA will benefit
from a strong management team with deep industry expertise and a
sound culture and strengthen its presence as an Industrial
automation distributor in the Northeast Region.
The transaction is projected to be accretive to
Rexel’s Earnings Per Share in year 1 and value-creating in year 2,
fully in line with the Group’s commitment, notably thanks to
targeted synergies.
The transaction is expected to close in Q3 22.
Disposal of Rexel in Spain & Portugal
Rexel has entered into a binding agreement with
Sonepar for the sale of Rexel Spain and Rexel Portugal. In 2021,
the combined entities generated revenues of €170 million, were
dilutive to Group profitability, employed 560 people and had 60
branches.
In those two countries, Rexel does not have
critical mass, and sees better opportunities for capital allocation
elsewhere.
The transaction is subject to approval by the
Spanish competition authority and is expected to close by
October.
In a context of growing macroeconomic
uncertainties, we are confident we will reach our recently upgraded
FY 22 guidance, with H2 2022 benefiting from an all-time high
backlog notably in North America, an easier volume base effect in
Europe and a return to normal in China, which should be back to
positive territory.
Leveraging our transformation and enhanced
efficiency, we target for 2022, at comparable scope of
consolidation and exchange rates:
- Same-day sales
growth of between 7% and 9%
- An adjusted EBITA1
margin of c. 6.7%, including 50bps of non-recurring items
- Free cash flow
conversion2 above 60%
1 Excluding (i) amortization of PPA and (ii) the non-recurring
effect related to changes in copper-based cable prices. 2 FCF
Before interest and tax/EBITDAaL
NB: The estimated impacts per quarter of (i) calendar effects by
geography, (ii) changes in the consolidation scope and (iii)
currency fluctuations (based on assumptions of average rates over
the rest of the year for the Group's main currencies) are detailed
in appendix 6
October 27,
2022 Third-quarter
2022 sales
February 16,
2023 Fourth-quarter
sales & FY 2022 results
First-half 2022 financial report is available on
the Group’s website (www.rexel.com).A slideshow of the
second-quarter sales and half-year 2022 results publication is also
available on the Group’s website.
Rexel, worldwide expert in the multichannel
professional distribution of products and services for the energy
world, addresses three main markets: residential, commercial, and
industrial. The Group supports its residential, commercial, and
industrial customers by providing a tailored and scalable range of
products and services in energy management for construction,
renovation, production, and maintenance. Rexel operates through a
network of more than 1,900 branches in 24 countries, with more than
26,000 employees. The Group’s sales were €14.7 billion in 2021.
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, and STOXX600. Rexel is also
part of the following SRI indices: FTSE4Good, Dow Jones
Sustainability Index Europe, Euronext Vigeo Europe 120 and Eurozone
120, STOXX® Global ESG Environmental Leaders, and S&P Global
Sustainability Yearbook 2022, in recognition of its performance in
terms of Corporate Social Responsibility (CSR).
For more information, visit
www.rexel.com/en.
FINANCIAL ANALYSTS / INVESTORS
Ludovic
DEBAILLEUX |
+33 1 42 85 76
12 |
ludovic.debailleux@rexel.com |
PRESS
Sara DU REAU |
+33 6 60 31 77
72 |
sara.dureau@rexel.com |
Brunswick: Thomas
KAMM |
+33 1 53 96 83
92 |
tkamm@brunswickgroup.com |
REPORTED EBITA (Earnings Before
Interest, Taxes and Amortization) is defined as operating income
before amortization of intangible assets recognized upon purchase
price allocation and before other income and other expenses.
ADJUSTED EBITA is defined as
Reported EBITA excluding the estimated non-recurring net impact
from changes in copper-based cable prices.
EBITDA (Earnings Before
Interest, Taxes, Depreciation and Amortization) is defined as
operating income before depreciation and amortization and before
other income and other expenses.
EBITDAaL is defined as EBITDA after deduction
of lease payment following the adoption of IFRS16.
RECURRING NET INCOME is defined
as net income restated for non-recurring copper effect, other
expenses and income, non-recurring financial expenses, net of tax
effect associated with the above items.
FREE CASH FLOW is defined as
cash from operating activities minus net capital expenditure.
NET DEBT is defined as financial debt less cash
and cash equivalents. Net debt includes debt hedge derivatives.
For appendix please open the PDF file.
The Group is exposed to fluctuations in copper
prices in connection with its distribution of cable products.
Cables accounted for approximately 17% of the Group's sales and
copper accounts for approximately 60% of the composition of cables.
This exposure is indirect since cable prices also reflect copper
suppliers' commercial policies and the competitive environment in
the Group's markets. Changes in copper prices have an estimated
so-called "recurring" effect and an estimated so called
"non-recurring" effect on the Group's performance assessed as part
of the monthly internal reporting process of the Rexel Group: i)
the recurring effect related to the change in copper-based cable
prices corresponds to the change in value of the copper part
included in the sales price of cables from one period to another.
This effect mainly relates to the Group’s sales; ii) the
non-recurring effect related to the change in copper-based cable
prices corresponds to the effect of copper price variations on the
sales price of cables between the time they are purchased and the
time they are sold, until all such inventory has been sold (direct
effect on gross profit). Practically, the non-recurring effect on
gross profit is determined by comparing the historical purchase
price for copper-based cable and the supplier price effective at
the date of the sale of the cables by the Rexel Group.
Additionally, the non-recurring effect on EBITA corresponds to the
non-recurring effect on gross profit, which may be offset, when
appropriate, by the non-recurring portion of changes in the
distribution and administrative expenses.The impact of these two
effects is assessed for as much of the Group’s total cable sales as
possible, over each period. Group procedures require that entities
that do not have the information systems capable of such exhaustive
calculations to estimate these effects based on a sample
representing at least 70% of the sales in the period. The results
are then extrapolated to all cables sold during the period for that
entity. Considering the sales covered. the Rexel Group considers
such estimates of the impact of the two effects to be
reasonable.This document may contain statements of future
expectations and other forward-looking statements. By their nature,
they are subject to numerous risks and uncertainties, including
those described in the Universal Registration Document registered
with the French Autorité des Marchés Financiers (AMF) on March 10,
2022 under number D.22-0083.These forward-looking statements are
not guarantees of Rexel's future performance, Rexel's actual
results of operations, financial condition and liquidity as well as
development of the industry in which Rexel operates may differ
materially from those made in or suggested by the forward-looking
statements contained in this release. The forward-looking
statements contained in this communication speak only as of the
date of this communication and Rexel does not undertake, unless
required by law or regulation, to update any of the forward-looking
statements after this date to conform such statements to actual
results to reflect the occurrence of anticipated results or
otherwise.The market and industry data and forecasts included in
this document were obtained from internal surveys, estimates,
experts and studies, where appropriate, as well as external market
research, publicly available information and industry publications.
Rexel, its affiliates, directors, officers, advisors and employees
have not independently verified the accuracy of any such market and
industry data and forecasts and make no representations or
warranties in relation thereto. Such data and forecasts are
included herein for information purposes only. This document
includes only summary information and must be read in conjunction
with Rexel’s Universal Registration Document registered with the
AMF on March 10, 2022 under number D.22-0083, as well as the
financial statements and consolidated result and activity report
for the 2021 fiscal year which may be obtained from Rexel’s website
(www.rexel.com).
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