Scienza e Tecnologia
Rexel: Q2 sales & H1 2024 results
→ Q2 24 sales up +1.8% on a reported basis, driven by our M&A strategy in Europe and North America
→ H1 24 sales of €9,629.7m, down (3.5)% on a same-day basis, with a gradual improvement in the period:
→ Ramp-up of digital sales, to 31% of sales in Q2 24, up +290bps, fostering future productivity gains
→ H1 24 adjusted EBITA margin resilience at 6.0%, supported by our productivity gains and cost initiatives
→ H1 24 operating income of €576.8 million (vs €660.0 million in H1 23) and recurring net income of €340.8 million (vs €455.1 million in H1 23)
→ Record Free cash flow generation , demonstrating the strength and resilience of our model
→ Active capital allocation in the first half:
→ 2024 outlook confirmed - In a more complex environment, notably marked by political uncertainties and a more competitive market, Rexel confirms its guidance , with same-day sales growth and adjusted Ebita margin expected in the lower end of the initial range
See definition in the Glossary section of this document Change at comparable scope of consolidation EBITDAaL into FCF before interest and tax
subjected to a limited review by statutory auditors.
SALES
H1 sales down (1.4)% year-on-year on a reported basis and (3.5)% on a constant and same-day basis
In H1 2024, Rexel posted sales of €9,629.7m, down (1.4)% on a reported basis. They include:
Q2 sales up +1.8% year-on-year on a reported basis and down (2.4)% on a constant and same-day basis
In the second quarter 2024, Rexel posted sales of €4,922.3m, up +1.8% on a reported basis, supported by the positive contribution of our M&A strategy . They include:
Including cable
On a constant and same-day basis, sales were down (2.4)% (or (1.9)% on a constant and actual-day basis), improving compared to (4.6)% in Q1 24. More specifically:
Europe (50% of Group sales): (4.5)% in Q2 and (5.7)% in H1 on a constant and same-day basis
In the second quarter , sales in Europe increased by +2.1% on a reported basis, including:
Germany, Switzerland & Austria
More specifically:
By country and cluster:
North America (43% of Group sales): (0.9)% in Q2 and (1.0)% in H1 on a constant and same-day basis
In the second quarter, sales in North America were up +1.2% on a reported basis, including:
In North America:
Specifically, in our 2 countries:
On July 10, post-close of the first-half, Rexel signed an agreement to acquire Electrical Supplies Inc in the US, reinforcing its position in Florida. The acquisition adds circa USD60m of sales, 3 branches and 93 FTE. This acquisition will be integrated under the Mayer banner, expanding its footprint.
Asia-Pacific (7% of Group sales): +4.1% in Q2 and (1.6)% in H1 on a constant and same-day basis
In the second quarter, sales in Asia-Pacific were up +3.5% on a reported basis, including:
PROFITABILITY
Adjusted EBITA margin at 6.0% in H1 2024, down -134 bps compared to H1 2023
Including €( 15)m for Corporate costs in H1 24
In a context of a (3.9)% actual-day sales decline in H1 2024, profitability was resilient, with an adjusted EBITA margin of 6.0%, compared to 7.3% in H1 2023. This strong performance was achieved amid a more challenging top line environment, combined with more pricing pressure. This was achieved thanks to specific plans in most countries, notably focusing on:
More specifically, the evolution on a comparable base can be explained as follows:
[For the graphic, open the PDF file by clicking on the link at the end of the press release].
By geography, the change in adjusted EBITA margin in H1 24 can be explained as follows:
As a result, adjusted EBITA stood at €574.2m (vs. €732.6m in H1 2023 on a comparable base) and reported EBITA stood at €596.4m (including a positive one-off copper effect of €22.2 million).
Focus on the bridge from EBITDA to Reported EBITA :
NET INCOME
Net income of €353.0 million in H1 2024 and r ecurring net income of €340.8 million
Operating income in the half-year stood at €576.8 million (vs €660.0 million in H1 2023).
Net financial expenses in the half-year amounted to €(96.0) million (vs. €(75.7) million in H1 2023), and can be broken down as follows:
Income tax in the half-year represented a charge of €(127.8) million (vs. €(155.9) million in H1 2023)
As a result, net income in the half-year stood at €353.0 million (vs. €428.4 million in H1 2023) and recurring net income amounted to €340.8 million in H1 2024 (vs €455.1 million in H1 2023) - See appendix 3.
FINANCIAL STRUCTURE
Record free cash-flow before interest and tax of €335.5 million in H1 2024
Indebtedness ratio of 1.92x at June 30, 2024
In the half-year, free cash flow before interest and tax reached an all-time-high level for the period of €335.5 million (vs. €242.3m in H1 2023), representing a free cash flow conversion rate (EBITDAaL into FCF before interest and taxes) of 53% . It included:
Below FCF before interest and tax, the cash flow statement took into account:
At June 30, 2024:
Including the effect of Talley acquisition
In a more complex environment, notably marked by political uncertainties and a more competitive market, Rexel confirms its guidance, with same-day sales growth and adjusted Ebita margin expected in the lower end of the initial range
At comparable scope of consolidation and exchange rates
Excluding (i) amortization of PPA and (ii) the non-recurring effect related to changes in copper-based cable prices.
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 30, 2024 Q3 2024 sales
February 13, 2025 FY 2024 results
First-half 2023 financial report is available on the Group's website (www.rexel.com).
A slideshow of the second-quarter sales and H1 2024 results 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 1,950 branches in 19 countries, with more than 26,500 employees. The Group's sales were €19.2 billion in 2023.
Rexel is listed on the Eurolist market of Euronext Paris (compartment A, ticker RXL, ISIN code FR0010451203). It is included in the following indices: MSCI World, CAC Next 20, SBF 120, CAC Large 60, CAC 40 ESG, CAC SBT 1.5 NR, 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
PRESS
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 by clicking on the link at the end of the press release.
The Group is exposed to fluctuations in copper prices in connection with its distribution of cable products. Cables accounted for approximately 15% 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 11, 2024 under number D.24-0096. 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 11, 2024 under number D.24-0096, as well as the financial statements and consolidated result and activity report for the 2023 fiscal year which may be obtained from Rexel's website (www.rexel.com).
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