- Nachrichtendetail
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28.07.2023 07:06:20 - dpa-AFX: GNW-Adhoc: Q2 SALES & H1 2023 RESULTS
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? Strong first-half performance with solid volumes and sustained high profitability
? H1 23 sales of EUR9,763.0m, up +8.1% on a same day basis, driven by positive
volumes and prices
* Market share gains in key countries, capitalizing on operational excellence, digital and additional services offering
? Electrification trends contributing strongly, especially in Europe - growing c. 5x times faster than the rest of the business in H1 and representing 22% of our sales
? H1 23 adjusted EBITA of EUR702.3m, implying a 7.2% adj EBITA margin up +16bps from record-high level, restated for non-recurring items from inventory price inflation on non-cable products in H1 2022. This progression results from strong
activity and good execution of our action plans
? Recurring net income in H1 23 at EUR455.1m, down (3.4)%, on high base effect as
2022 earnings benefited from all-time high inflation tailwind on non-cable products
? Positive Free Cash Flow before interest and tax of EUR242.3m in H1 2023 (vs
EUR231.6m in H1 2022). Indebtedness ratio at 1.26x
? Power Up 2025 strategic action plans now in place and delivering, resulting in
higher growth, sustained high profitability and disciplined capital allocation
? Acquisition of Wasco in the Netherlands, further enhancing Rexel's exposure to
fast growing markets
? FY 23 guidance upgraded, continued focus on our action plans to focus on growing market segments and boost profitability, in a supportive but more contrasting environment
+------------------------------------------------------------------------------+
|Guillaume TEXIER, Chief Executive Officer, said: | |"I'm extremely proud of Rexel's solid performance in the first half of 2023 as|
|it proves that the company is able to deliver very strong results even in a| |more uncertain economic environment. Our exposure to several fast-growing and| |resilient segments, notably those linked to electrification, allowed us to| |more than offset the softness in a limited number of end-markets. Our| |relentless focus on efficiency allowed us to maintain a record-high level of| |profitability. In addition, our refocused portfolio, with well-targeted| |acquisitions and divestments, is now contributing strongly to our performance.|
|This set of results makes us very confident in our ability to reach our 2023 | |guidance, which has been upgraded, and puts us well on track to achieve our| |2025 ambitions." | +------------------------------------------------------------------------------+
FINANCIAL REVIEW FOR THE PERIOD ENDED JUNE 30, 2023
------------------------------------------------------
subjected to a limited review by statutory auditors.
--------------------------
Key
figures(1)
(EURm) - Change excl. non Actual H1 2023 YoY change recurring items
Sales on a
reported
basis 9,763.0 +7.5 % +7.5 %
On a
constant
and actual-
day basis +8.1 % +8.1 %
On a
constant
and same-
day basis +8.1 % +8.1 %
-------------------------------------------------------------------------------
Adjusted
EBITA(2) 702.3 (1.7) %
As a
percentage
of sales 7.2 % -72 bps +16bps
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Reported
EBITA 695.5 (1.9) %
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Operating
income 660.0 (3.5) %
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Net income 428.4 (6.8) %
-------------------------------------------------------------------------------
Recurring
net income 455.1 (3.4) %
-------------------------------------------------------------------------------
FCF before
interest
and tax 242.3 +4.7 %
-------------------------------------------------------------------------------
Net debt at
end of
period 1,901.6 EUR90m increase
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(1) See definition in the Glossary section of this document (2) Change at comparable scope of consolidation( 3) Adjusted for non-recurring copper effect
SALES
In Q2, sales were up +2.8% year-on-year on a reported basis and up +6.2% on a constant and same-day basis.
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
Sales on
a
reported
basis 4,835.1 +2.8% 9,763.0 +7.5%
On a
constant
and
actual-
day
basis +5.2% +8.1%
On a
constant
and
same-day
basis +6.2% +8.1%
-----------------------------------------------------------------------------------------------------
In the second quarter, Rexel posted sales of EUR4,835.1m, up +2.8% on a reported
basis, including:
In Q2 2023, sales were up +6.2% on a constant and same-day basis (or +5.2% on a constant and actual-day basis), with growth well balanced between volumes and selling price increases on non-cable products in all geographies.
basis. On a constant and same-day basis, sales were up +8.1%, including positive
impacts from volumes of +3.7% and non-cable copper prices of +5.7%, offsetting the change in copper-based cable prices (i.e. (1.2)% vs. a positive impact of +3.1% in H1 2022).
The +7.5% increase in sales on a reported basis included:
* A slightly positive net scope effect of EUR6.4 million (i.e. 0.1% of H1 2022
Europe (50% of Group sales): +8.3% in Q2 and +10.5% in H1, on a constant and same-day basis
In the second quarter, sales in Europe increased by +1.2% on a reported basis, including:
* A negative currency effect of EUR(11.5) million, or (0.5)%, mainly due to the
On a constant and same-day basis, sales were up +8.3%, including a positive volume contribution of +2.4%, and a positive price effect of +5.9% (+6.6% on non-cable products offset (0.7)% on cables)
Key figures
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In Europe, electrification trends continue to support our growth, with our three
product families (solar, EV charging infrastructure and HVAC) growing by more than +31% and representing 20% of sales and more than 60% of the same-day sales growth in the quarter (contributing for +507 bps of same-day sales growth in Europe in Q2 23)
acceleration in solar activity, with France adopting this alternative energy
North America (43% of Group sales): +4.4% in Q2 and +6.5% in H1 on a constant and same-day basis
In the second quarter, sales in North America were up +5.9% on a reported basis,
including:
* A positive scope effect of +4.2%, or EUR84.4 million, from the acquisition of Buckles-Smith and Horizon in the US, and, to a lesser extent, LTL in Canada; * A neutral calendar effect.
On a constant and same-day basis, sales were up +4.4%, including +4.4% from volume growth and a neutral price effect (+3.4% on non-cable products offset (3.4)% on cables).
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
North
America 2,103.8 +4.4% 4,176.0 +6.5%
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United
States 1,722.6 +4.2% 3,427.9 +6.3%
Gulf
Mountain
---------------------------------------------------------------------------------------------------------
Canada 381.2 +5.1% 748.1 +7.1%
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In North America, the overall good performance was driven by our capacity to capture mega trends and to enhance backlog execution.
reshoring and O&G segment, offsetting negative trends in residential. We
Asia-Pacific (7% of Group sales): +2.6% in Q2 and +2.0% in H1 on a constant and
same-day basis
In the second quarter, sales in Asia-Pacific were down (4.8)% on a reported basis, including:
On a constant and same-day basis, sales were up +2.6%.
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
Asia-
Pacific 332.5 +2.6% 661.8 +2.0%
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* In India (16% of Asia's sales), sales were up +54.6% driven by improving availability of products in a favorable industrial market.
PROFITABILITY
Adjusted EBITA margin at 7.2% in H1 2023, down -72 bps compared to H1 2022, or up +16bps excluding non-recurring items that benefited H1 2022
H1 2023
On a
constant
and
actual-
day basis +10.2% +6.7% +3.0% +8.1%
On a
constant
and same-
day basis +10.5% +6.5% +2.0% +8.1%
------------------------------------------------------------------------------------------------
Adj.
EBITA 389 317 15 702*
% of
Change
restated
for non-
recurring
items +10bps +13bps +101bps +16bps
------------------------------------------------------------------------------------------------
*Including EUR(19)m for Corporate costs in H1 23
The +8.1% actual sales growth in H1 2023 translated into an adjusted EBITA margin of 7.2%.
Restated for non-recurring items from inventory price inflation on non-cable products, net of higher performance-linked bonuses in 2022, adjusted EBITA margin was up 16 bps. As detailed below, this improvement reflects robust activity coupled with our more efficient organization and action plans, which more than offset overall opex inflation:
To see the graph, please open the pdf file by clicking on the link at the end of
the press release.
Restated for the 87bps non-recurring items that had a positive impact in H1 22,
the +16bps progression in H1 23 notably included:
By geography:
initiatives, better product mix and cost control, which more than offset
* Adjusted EBITA margin in H1 2023 stood at 7.6% of sales down -87 bps, or
effect of EUR(6.8) million), down (1.9)% year-on-year.
Focusing on the bridge from EBITDA to Reported EBITA:
Key figures (EURm) H1 2022 H1 2023 YoY change
Depreciation Right of Use
(IFRS 16) (107.6) (113.4)
Other depreciation and
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NET INCOME
Net income of EUR428.4 million in H1 2023 and recurring net income of EUR455.1
million
Operating income in the half-year stood at EUR660.0 million, down from EUR683.6
million in H1 2022.
Net financial expenses in the half-year amounted to EUR(75.7) million (vs. EUR(51.9)
million in H1 2022), and can be broken down as follows:
* EUR(26.7) million from interest on lease liabilities in H1 2023 vs EUR(21.6)
EUR(171.9) million in H1 2022).
Net income in the half-year was EUR428.4 million (vs. EUR459.8 million in H1 2022).
Recurring net income amounted to EUR455.1 million in H1 2023, down (3.4)% compared
to H1 2022, on a difficult base effect as 2022 earnings benefited from a record-
high inflation tailwind on non-cable products (Appendix 3).
FINANCIAL STRUCTURE
Free cash-flow before interest and tax of EUR242.3 million in H1 2023
Indebtedness ratio of 1.26x at June 30, 2023
In the half-year, free cash flow before interest and tax was an inflow of EUR242.3
million (vs. EUR231.6 million in H1 2022). It included:
* An outflow of EUR(402.7) million from change in working capital (compared to
Below FCF before interest and tax, the cash flow statement took into account:
At June 30, 2023:
capital allocation (notably EUR1.20 dividend payment, share buyback and M&A).
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In June 2022, we unveiled our Power up 2025 strategy during a Capital Markets Day in Zurich. Our record 2022 results and our achievements in H1 23 put us well
on track to achieve the 2022-2025 four-year objectives. That includes our financial targets as well as our business ambitions and capital allocation.
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x2 the pace of our traditional ED
business 2.1x c. 5x
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Share buyback of EUR400m over 4 years 17% completed 30% completed
M&A contribution to sales up to EUR2bn
in 4 years c. EUR250m completed c. EUR1bn(4) completed
Divestments of between EUR200m & EUR500m
of sales c. EUR200m completed c. EUR480m completed
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1. Including 66bps of non-recurring items
2. Restated from the disposal of Norway in 2023 (25% on a reported basis)
3. Excluding the automatized DC in Norway that had been disposed
4. Including Wasco acquisition
OUTLOOK
----------
Following a strong start to the year, we are upgrading our full-year guidance.
We now anticipate for 2023, at comparable scope of consolidation and exchange rates:
* An adjusted EBITA(1 )margin of between 6.6% and 6.9% (vs initial guidance of
(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
CALENDAR
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------------------------
First-half 2023 financial report is available on the Group's website (www.rexel.com).
A slideshow of the second-quarter sales and half-year 2023 results publication is also available on the Group's website.
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 21 countries, with more than 26,000 employees. The Group's sales were EUR18.7 billion in 2022.
Rexel is listed on the Eurolist market of Euronext Paris (compartment A, ticker RXL, ISIN code FR0010451203). It is included in the following indices: 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.
CONTACTS
-----------
FINANCIAL ANALYSTS / INVESTORS
Ludovic DEBAILLEUX +33 1 42 85 76 12 ludovic.debailleux@rexel.com
(mailto:ludovic.debailleux@rexel.com)
PRESS
Brunswick: Thomas KAMM +33 1 53 96 83 92 tkamm@brunswickgroup.com
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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.
APPENDIX
-----------
For appendix, please open the pdf file by clicking on the link at the end of the
press release.
DISCLAIMER
-------------
The Group is exposed to fluctuations in copper prices in connection with its distribution of cable products. Cables accounted for approximately 19% 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 9, 2023 under number D.23-0078. 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 9, 2023 under number D.23-0078, as well as the financial statements and consolidated result and activity report for the 2022 fiscal year which may be obtained from Rexel's website (www.rexel.com).
Â
Q2 SALES & H1 2023 RESULTS
Strong start to the year - volumes supported by electrification trends
Delivering on Power Up 2025 roadmap
FY 23 guidance upgraded
-------------------------------------------------------------------------
? Strong first-half performance with solid volumes and sustained high profitability
? H1 23 sales of EUR9,763.0m, up +8.1% on a same day basis, driven by positive
volumes and prices
* Q2 23 sales of EUR4,835.1m, up +6.2% on a constant and same-day basis
* Solid volumes, up +3.3% after +4.1% in Q1
* Positive pricing contribution from both non-cable and cable, up +2.8%
but slowing sequentially, as anticipated
* Market share gains in key countries, capitalizing on operational excellence, digital and additional services offering
? Electrification trends contributing strongly, especially in Europe - growing c. 5x times faster than the rest of the business in H1 and representing 22% of our sales
? H1 23 adjusted EBITA of EUR702.3m, implying a 7.2% adj EBITA margin up +16bps from record-high level, restated for non-recurring items from inventory price inflation on non-cable products in H1 2022. This progression results from strong
activity and good execution of our action plans
? Recurring net income in H1 23 at EUR455.1m, down (3.4)%, on high base effect as
2022 earnings benefited from all-time high inflation tailwind on non-cable products
? Positive Free Cash Flow before interest and tax of EUR242.3m in H1 2023 (vs
EUR231.6m in H1 2022). Indebtedness ratio at 1.26x
? Power Up 2025 strategic action plans now in place and delivering, resulting in
higher growth, sustained high profitability and disciplined capital allocation
? Acquisition of Wasco in the Netherlands, further enhancing Rexel's exposure to
fast growing markets
? FY 23 guidance upgraded, continued focus on our action plans to focus on growing market segments and boost profitability, in a supportive but more contrasting environment
+------------------------------------------------------------------------------+
|Guillaume TEXIER, Chief Executive Officer, said: | |"I'm extremely proud of Rexel's solid performance in the first half of 2023 as|
|it proves that the company is able to deliver very strong results even in a| |more uncertain economic environment. Our exposure to several fast-growing and| |resilient segments, notably those linked to electrification, allowed us to| |more than offset the softness in a limited number of end-markets. Our| |relentless focus on efficiency allowed us to maintain a record-high level of| |profitability. In addition, our refocused portfolio, with well-targeted| |acquisitions and divestments, is now contributing strongly to our performance.|
|This set of results makes us very confident in our ability to reach our 2023 | |guidance, which has been upgraded, and puts us well on track to achieve our| |2025 ambitions." | +------------------------------------------------------------------------------+
FINANCIAL REVIEW FOR THE PERIOD ENDED JUNE 30, 2023
------------------------------------------------------
* Half-year 2023 financial report was authorized for issue by the Board of
Directors on July 27, 2023. 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.
MAIN FIGURES IN H1 2023
--------------------------
Key
figures(1)
(EURm) - Change excl. non Actual H1 2023 YoY change recurring items
Sales on a
reported
basis 9,763.0 +7.5 % +7.5 %
On a
constant
and actual-
day basis +8.1 % +8.1 %
On a
constant
and same-
day basis +8.1 % +8.1 %
-------------------------------------------------------------------------------
Adjusted
EBITA(2) 702.3 (1.7) %
As a
percentage
of sales 7.2 % -72 bps +16bps
-------------------------------------------------------------------------------
Reported
EBITA 695.5 (1.9) %
-------------------------------------------------------------------------------
Operating
income 660.0 (3.5) %
-------------------------------------------------------------------------------
Net income 428.4 (6.8) %
-------------------------------------------------------------------------------
Recurring
net income 455.1 (3.4) %
-------------------------------------------------------------------------------
FCF before
interest
and tax 242.3 +4.7 %
-------------------------------------------------------------------------------
Net debt at
end of
period 1,901.6 EUR90m 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
SALES
In Q2, sales were up +2.8% year-on-year on a reported basis and up +6.2% on a constant and same-day basis.
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
Sales on
a
reported
basis 4,835.1 +2.8% 9,763.0 +7.5%
On a
constant
and
actual-
day
basis +5.2% +8.1%
On a
constant
and
same-day
basis +6.2% +8.1%
-----------------------------------------------------------------------------------------------------
In the second quarter, Rexel posted sales of EUR4,835.1m, up +2.8% on a reported
basis, including:
* A positive constant and same-day sales growth of +6.2%
* A negative currency effect of EUR(93.6) million (i.e. (2.0)% of Q2 2022
sales), mainly due to the depreciation of the US and Canadian dollars;
* A negative net scope effect of EUR(17.6) million (i.e. (0.4)% of Q2 2022
sales), resulting from the net effect between disposals in Europe (Rexel
Spain, Portugal and Norway) and recent acquisitions (Horizon and Buckles-
Smith in the US, Trilec in Belgium and to a lesser extent, LTL in Canada);
* A negative calendar effect of (1.0)%.
In Q2 2023, sales were up +6.2% on a constant and same-day basis (or +5.2% on a constant and actual-day basis), with growth well balanced between volumes and selling price increases on non-cable products in all geographies.
* More specifically, same-day sales growth of +6.2% in the quarter resulted
from a +3.3% rise in volumes, an increase of +4.7% in the selling price of
non-cable products and a decrease of (1.8)% on copper-based cable prices
* The four product categories related to electrification (Solar, Electric
Vehicle charging infrastructure, HVAC and Industrial Automation),
represented 22% of sales and grew by 16% in Q2. They grew in the quarter at
c. 5x the pace of the traditional ED business, above the Power Up 2025
ambition to grow those businesses at twice the pace of the ED business
* Volumes were positive in all geographies in the quarter driven by mega
trends. Volumes were up +4.4% in North America, boosted by reshoring of
industrial production, and +2.4% in Europe from electrification and more
specifically Solar, EV and HVAC
* The +4.7% of non-cable price increases resulted from both carry-over effect
(lower than in Q1 23) and from additional selling price increases in the Q2
23. Overall, most product categories benefited from significant price
increases, except conduits in North America and some industrial automation
products in China. We expect to further increase prices in the second part
of the year
* The (1.8)% cable price evolution reflects the lower copper price in Q2 23
compared to Q2 22.
* We posted further growth in digitalization in all three geographies, with
digital sales now representing 27.7% of sales, up +295bps compared to Q2
2022. Trends were positive in Europe (37.2% of sales, an increase of +220
bps), Asia-Pacific (up +364bps, to 8.4% of sales) and North America (19.8%
of sales, an increase of +346 bps) with strong progression in the US.
In H1 2023, Rexel posted sales of EUR9,763.0 million, up +7.5% on a reported
basis. On a constant and same-day basis, sales were up +8.1%, including positive
impacts from volumes of +3.7% and non-cable copper prices of +5.7%, offsetting the change in copper-based cable prices (i.e. (1.2)% vs. a positive impact of +3.1% in H1 2022).
The +7.5% increase in sales on a reported basis included:
* A negative currency effect of EUR(61.4) million (i.e. (0.7)% of H1 2022
sales), mainly due to the depreciation of the Canadian dollar and Swedish
Krona;
* A slightly positive net scope effect of EUR6.4 million (i.e. 0.1% of H1 2022
sales), resulting from the acquisitions of Horizon and Buckles-Smith in the
US and Trilec in Belgium as well as LTL in Canada, offsetting the disposals
of businesses including Rexel Spain, Portugal and Norway;
* A neutral calendar effect.
Europe (50% of Group sales): +8.3% in Q2 and +10.5% in H1, on a constant and same-day basis
In the second quarter, sales in Europe increased by +1.2% on a reported basis, including:
* A negative currency effect of EUR(11.5) million, or (0.5)%, mainly due to the
depreciation of the Swedish Krona against the euro;
* A negative scope effect of (4.3)%, or EUR(102.0) million, from the net effects
between the acquisitions of Trilec in Belgium and the disposals of Rexel
Spain, Portugal and Norway;
* A negative calendar effect of (2.0)%.
On a constant and same-day basis, sales were up +8.3%, including a positive volume contribution of +2.4%, and a positive price effect of +5.9% (+6.6% on non-cable products offset (0.7)% on cables)
Key figures
(EURm) Q2 2023 YoY change H1 2023 YoY change Europe 2,398.7 +8.3% 4,925.1 +10.5%
----------------------------------------------------------------------------------------------------------
France 944.8 +8.7% 1,918.4 +9.7% Benelux 313.0 +9.6% 629.5 +11.0% Germany 269.9 +13.5% 552.3 +18.0% Nordics 232.9 +5.2% 519.5 +11.6% UK 195.6 +2.3% 416.4 +2.5% Switzerland 164.6 +7.9% 330.2 +8.5%
----------------------------------------------------------------------------------------------------------
In Europe, electrification trends continue to support our growth, with our three
product families (solar, EV charging infrastructure and HVAC) growing by more than +31% and representing 20% of sales and more than 60% of the same-day sales growth in the quarter (contributing for +507 bps of same-day sales growth in Europe in Q2 23)
* Sales in France (39% of the region's sales) posted solid +8.7% growth,
further outperforming the market in Q2. The quarter was driven by double-
digit progression in Industry, Commercial and HVAC end-markets and, to a
lesser extent, by residential. The quarter also benefited from an
acceleration in solar activity, with France adopting this alternative energy
later than other European countries.
* Benelux (13% of the region's sales) was up +9.6%, with positive volume
momentum fueled by solar.
* Sales in Germany (11% of the region's sales) were up +13.5%, with favorable
trends in all three end-markets, continued market share gains and sustained
growth in solar.
* Sales in the Nordics (10% of the region's sales) were up +5.2%, notably
driven by a strong demand in solar, offsetting the loss of two large
customers.
* In the UK (8% of the region's sales), sales were up +2.3%, with residential
and industrial markets offset by lower growth in commercial.
North America (43% of Group sales): +4.4% in Q2 and +6.5% in H1 on a constant and same-day basis
In the second quarter, sales in North America were up +5.9% on a reported basis,
including:
* A negative currency effect of (2.8)%, or EUR(54.9) million, due to the
depreciation of the US and Canadian dollars against the euro;
* A positive scope effect of +4.2%, or EUR84.4 million, from the acquisition of Buckles-Smith and Horizon in the US, and, to a lesser extent, LTL in Canada; * A neutral calendar effect.
On a constant and same-day basis, sales were up +4.4%, including +4.4% from volume growth and a neutral price effect (+3.4% on non-cable products offset (3.4)% on cables).
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
North
America 2,103.8 +4.4% 4,176.0 +6.5%
---------------------------------------------------------------------------------------------------------
United
States 1,722.6 +4.2% 3,427.9 +6.3%
Gulf
Central +29.3% +27.5% California +16.0% +16.2% Midwest +5.6% +11.8% Florida +3.2% +5.9%
Mountain
Plains +2.0% +11.9% Southeast +1.1% +0.1% Northwest (6.3) % (2.4) % Northeast (8.3) % +0.5%
---------------------------------------------------------------------------------------------------------
Canada 381.2 +5.1% 748.1 +7.1%
---------------------------------------------------------------------------------------------------------
In North America, the overall good performance was driven by our capacity to capture mega trends and to enhance backlog execution.
* In the US (82% of the region's sales), sales were up +4.2% in Q2 2023.
* By market, we seized the robust industrial demand driven by production
reshoring and O&G segment, offsetting negative trends in residential. We
also benefited from the strong resilience of our commercial activity
thanks to our very diversified portfolio and the solid backlog.
* By region, the market share gains in California & Gulf Central offset
lower demand in the Northwest and Northeast.
* By business, the growth was boosted by the project activities from good
backlog execution that benefited from lower supply chain pressure.
* The backlog at end-June 2023 remains high, still representing 3
months of sales; up 3.6% vs end Q2 22 and 2.8% below end of Q1 2.
* In Canada (18% of the region's sales), sales grew by +5.1% on a same-day
basis, notably thanks to industrial activities and specifically
Petrochemical and mining, contributing for 280bps and 40bps respectively.
Asia-Pacific (7% of Group sales): +2.6% in Q2 and +2.0% in H1 on a constant and
same-day basis
In the second quarter, sales in Asia-Pacific were down (4.8)% on a reported basis, including:
* A negative currency effect of (7.8)%, or EUR(27.2) million, due to the
depreciation of the Australian dollar and the Chinese renminbi against the
euro;
* A positive calendar effect of +0.7%
On a constant and same-day basis, sales were up +2.6%.
Key
figures
(EURm) Q2 2023 YoY change H1 2023 YoY change
Asia-
Pacific 332.5 +2.6% 661.8 +2.0%
----------------------------------------------------------------------------------------------------
Australia 147.2 +4.9% 290.8 +6.9% China 132.9 (1.2) % 270.3 (2.4) %
----------------------------------------------------------------------------------------------------
* In the Pacific (53% of the region's sales), sales were up +2.8% on a
constant and same-day basis:
* In Australia (84% of Pacific's sales), sales were up +4.9%, driven by
mid-single digit growth in all three end-markets. The lower growth
compared to Q1 23 is explained by the industrial segment as well as
commercial to a lesser extent.
* In New Zealand (16% of Pacific's sales), sales were down (7.0)% in Q2
23 as the country entered into recession, with all sectors impacted,
particularly the commercial and industrial end-markets.
* In Asia (47% of the region's sales), sales were up +2.5% on a constant and
same-day basis:
* In China (84% of Asia's sales), sales were down (1.2)% from business
selectivity, offsetting favorable trends in several verticals such as
machinery, automotive or municipalities.
* In India (16% of Asia's sales), sales were up +54.6% driven by improving availability of products in a favorable industrial market.
PROFITABILITY
Adjusted EBITA margin at 7.2% in H1 2023, down -72 bps compared to H1 2022, or up +16bps excluding non-recurring items that benefited H1 2022
H1 2023
(EURm) Europe North America Asia Pacific Group Sales 4,925 4,176 662 9,763
On a
constant
and
actual-
day basis +10.2% +6.7% +3.0% +8.1%
On a
constant
and same-
day basis +10.5% +6.5% +2.0% +8.1%
------------------------------------------------------------------------------------------------
Adj.
EBITA 389 317 15 702*
% of
sales 7.9% 7.6% 2.3% 7.2%
Change -79 bps -87 bps +97 bps -72 bps
---------------------
Change
restated
for non-
recurring
items +10bps +13bps +101bps +16bps
------------------------------------------------------------------------------------------------
*Including EUR(19)m for Corporate costs in H1 23
The +8.1% actual sales growth in H1 2023 translated into an adjusted EBITA margin of 7.2%.
Restated for non-recurring items from inventory price inflation on non-cable products, net of higher performance-linked bonuses in 2022, adjusted EBITA margin was up 16 bps. As detailed below, this improvement reflects robust activity coupled with our more efficient organization and action plans, which more than offset overall opex inflation:
To see the graph, please open the pdf file by clicking on the link at the end of
the press release.
Restated for the 87bps non-recurring items that had a positive impact in H1 22,
the +16bps progression in H1 23 notably included:
* A positive operating leverage impact of +92 bps, from robust activity and
active management of our internal action plans, as disclosed below in the
detail by geography;
* An opex inflation impact of -76 bps due to overall inflation of +4.0%,
including +5.3% from wage increases and +3.8% from other opex.
By geography:
* Europe:
* Adjusted EBITA margin in H1 2023 stood at 7.9% of sales, down -79 bps,
or up +10bps restated for non-recurring items. This improvement results
from the implementation of our internal actions such supplier
initiatives, better product mix and cost control, which more than offset
opex inflation, translating into the adjusted Ebita margin improvement. * North America:
* Adjusted EBITA margin in H1 2023 stood at 7.6% of sales down -87 bps, or
up +13bps restated for non-recurring items. This improvement results
from the implementation of our actions such as pricing management,
synergies on acquisitions, improved inventory management and
productivity, which more than offset opex inflation and investment for
growth translating into the adjusted Ebita margin improvement.
* Asia-Pacific:
* Adjusted EBITA margin stood at 2.3% of sales, up +97 bps or up +101bps
restated for non-recurring items, on better credit control leading to
reduced bad debt level in H1 23.
* At corporate level, adjusted EBITA amounted to EUR(19.0) million, in line with
the normative level.
As a result, adjusted EBITA stood at EUR702.3 million, down (1.7)% in H1 2023 and
reported EBITA stood at EUR695.5 million (including a negative one-off copper
effect of EUR(6.8) million), down (1.9)% year-on-year.
Focusing on the bridge from EBITDA to Reported EBITA:
* EBITDA margin was down -74 bps at 8.9%
* Depreciation of Right of Use stands at EUR(113.4) million
* Other depreciation and amortization stood at EUR(56.4) million, implying
0.58% of sales, slightly lower than the 0.62% in H1 2022.
Key figures (EURm) H1 2022 H1 2023 YoY change
EBITDA 872.5 865.3 (0.8) % % EBITDA margin 9.6% 8.9%
Depreciation Right of Use
(IFRS 16) (107.6) (113.4)
Other depreciation and
amortization (56.2) (56.4) Reported EBITA 708.7 695.5 (1.9) %
-------------------------------------------------------------------------------
NET INCOME
Net income of EUR428.4 million in H1 2023 and recurring net income of EUR455.1
million
Operating income in the half-year stood at EUR660.0 million, down from EUR683.6
million in H1 2022.
* Amortization of intangible assets resulting from purchase price allocation
amounted to EUR(10.5) million (vs. EUR(5.7) million in H1 2022).
* Other income and expenses amounted to a net charge of EUR(25.1) million (vs. a
net charge of EUR(19.4) million in H1 2022) and included:
* EUR(13.5) million from capital losses on disposal
* EUR(7.0) million of acquisition costs
* EUR(4.2) million of restructuring costs (vs EUR(2.4) million in H1 2022)
Net financial expenses in the half-year amounted to EUR(75.7) million (vs. EUR(51.9)
million in H1 2022), and can be broken down as follows:
* EUR(49.0) million in H1 2023 from financial costs compared to EUR(30.2) million
in H1 2022, reflecting higher average interest rates.
* The effective interest rate increased to 3.39% in H1 2023 compared to
2.01% in H1 2022.
* EUR(26.7) million from interest on lease liabilities in H1 2023 vs EUR(21.6)
million in H1 2022. Income tax in the half-year represented a charge of EUR(155.9) million (vs.
EUR(171.9) million in H1 2022).
* Effective tax rate stood at 26.7% in H1 2023 compared to 27.2% in H1 2022,
down 50bps.
Net income in the half-year was EUR428.4 million (vs. EUR459.8 million in H1 2022).
Recurring net income amounted to EUR455.1 million in H1 2023, down (3.4)% compared
to H1 2022, on a difficult base effect as 2022 earnings benefited from a record-
high inflation tailwind on non-cable products (Appendix 3).
FINANCIAL STRUCTURE
Free cash-flow before interest and tax of EUR242.3 million in H1 2023
Indebtedness ratio of 1.26x at June 30, 2023
In the half-year, free cash flow before interest and tax was an inflow of EUR242.3
million (vs. EUR231.6 million in H1 2022). It included:
* EBITDAaL of EUR731.1 million (vs EUR750.3 million in H1 2022), of which EUR(134.3)
million of lease payments in H1 2023;
* An outflow of EUR(402.7) million from change in working capital (compared to
an outflow of EUR(454.4) million in H1 2022). The change in trade working
capital stood at EUR(254.2) million, combined with an outflow of EUR(148.5)
million from the change in non-trade working capital notably explained by
the cash-out of 2022 performance linked-bonuses and commissions.
* On a constant basis, trade WCR was stable at 15.1% of sales in H1 2023
(vs 15.2% in H1 2022).
* A higher level of net capital expenditure (i.e. EUR(74.5) million vs. EUR(54.6)
million in H1 2022). Gross capex represented 0.6% of sales, stable vs. H1
2022.
Below FCF before interest and tax, the cash flow statement took into account:
* EUR(44.4) million of net interest paid in H1 2023 (vs EUR(24.2) million paid in
H1 2022);
* EUR(184.2) million of income tax paid in the half-year, compared to EUR(161.0)
million paid in H1 2022;
* EUR(65.2) million of financial investment, corresponding to the net effect
between cash-out for the acquisitions (EUR194m) and proceeds from the
disposals (EUR131m);
* EUR(362.3) million of dividends paid in H1 2023 based on 2022 earnings (EUR1.20
per share);
* EUR(42.3) million of share buybacks;
* EUR12.6 million of positive currency effects during the half year (vs a
negative EUR(64.4) million in H1 2022).
At June 30, 2023:
* Net financial debt increased by EUR90.3 million year-on-year at EUR1,901.6
million (vs EUR1,811.3 million at June 30, 2022), resulting from active
capital allocation (notably EUR1.20 dividend payment, share buyback and M&A).
* The indebtedness ratio (Net financial debt/EBITDAaL), as calculated under
the Senior Credit Agreement terms, stood at 1.26x, a stable level vs. June
30, 2022.
ON TRACK TO ACHIEVE OUR POWER UP 2025 OBJECTIVES
---------------------------------------------------
In June 2022, we unveiled our Power up 2025 strategy during a Capital Markets Day in Zurich. Our record 2022 results and our achievements in H1 23 put us well
on track to achieve the 2022-2025 four-year objectives. That includes our financial targets as well as our business ambitions and capital allocation.
Power Up 2025 2022 achievements H1 2023 achievements 4% to 7% organic growth over 4 years 14.1% 8.1% 6.5% to 7% adj. Ebita margin in 2025 7.3%(1) 7.2% FCF conversion above 60% each year 61.4% On track
-------------------------------------------------------------------------------
40% of digital sales in 2025 24%(2) of sales 28% of sales x3 the number of automatized DC 6(3) automated DC 7 automated DC
x2 the pace of our traditional ED
business 2.1x c. 5x
-------------------------------------------------------------------------------
Share buyback of EUR400m over 4 years 17% completed 30% completed
M&A contribution to sales up to EUR2bn
in 4 years c. EUR250m completed c. EUR1bn(4) completed
Divestments of between EUR200m & EUR500m
of sales c. EUR200m completed c. EUR480m completed
-------------------------------------------------------------------------------
1. Including 66bps of non-recurring items
2. Restated from the disposal of Norway in 2023 (25% on a reported basis)
3. Excluding the automatized DC in Norway that had been disposed
4. Including Wasco acquisition
OUTLOOK
----------
Following a strong start to the year, we are upgrading our full-year guidance.
We now anticipate for 2023, at comparable scope of consolidation and exchange rates:
* Same-day sales growth in the upper end of the initial range (vs initial
guidance of 2%-6% )
* An adjusted EBITA(1 )margin of between 6.6% and 6.9% (vs initial guidance of
6.3% - 6.7%) * Free cash flow conversion(2) above 60% (unchanged)
(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
CALENDAR
-----------
October 20, 2023 Third-quarter 2023 sales February 15, 2024 FY 2023 results FINANCIAL INFORMATION
------------------------
First-half 2023 financial report is available on the Group's website (www.rexel.com).
A slideshow of the second-quarter sales and half-year 2023 results publication is also available on the Group's website.
ABOUT REXEL GROUP --------------------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 21 countries, with more than 26,000 employees. The Group's sales were EUR18.7 billion in 2022.
Rexel is listed on the Eurolist market of Euronext Paris (compartment A, ticker RXL, ISIN code FR0010451203). It is included in the following indices: 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.
CONTACTS
-----------
FINANCIAL ANALYSTS / INVESTORS
Ludovic DEBAILLEUX +33 1 42 85 76 12 ludovic.debailleux@rexel.com
(mailto:ludovic.debailleux@rexel.com)
PRESS
Brunswick: Thomas KAMM +33 1 53 96 83 92 tkamm@brunswickgroup.com
(mailto:tkamm@brunswickgroup.com) GLOSSARY
-----------
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.
APPENDIX
-----------
For appendix, please open the pdf file by clicking on the link at the end of the
press release.
DISCLAIMER
-------------
The Group is exposed to fluctuations in copper prices in connection with its distribution of cable products. Cables accounted for approximately 19% 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 9, 2023 under number D.23-0078. 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 9, 2023 under number D.23-0078, as well as the financial statements and consolidated result and activity report for the 2022 fiscal year which may be obtained from Rexel's website (www.rexel.com).
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| Name | WKN | Börse | Kurs | Datum/Zeit | Diff. | Diff. % | Geld | Brief | Erster | Schluss | |
|---|---|---|---|---|---|---|---|---|---|---|---|
 |
REXEL S.A. INH. EO 5 | A0MM7Q | Frankfurt | 24,350 | 18.06.24 08:49:48 | -0,480 | -1,93% | 24,810 | 24,970 | 24,350 | 24,830 |
