THIRD-QUARTER 2019 SALES
REVENUE GROWTH FOR THE 12th CONSECUTIVE QUARTER
SAME-DAY SALES UP 0.9%
FULL-YEAR FINANCIAL TARGETS CONFIRMED
→ SALES OF €3,422.2bn IN Q3
→ SLOWER GROWTH THAN IN Q2 19 EXPLAINED BY LOWER INDUSTRIAL DEMAND, ESPECIALLY IN THE US AND IN GERMANY, AS WELL AS BUSINESS SELECTIVITY AND EXPECTED UNFAVORABLE BASE EFFECT
→ DIGITAL REVENUE UP 13.2% IN Q3, NOW REPRESENTING 17.5% OF TOTAL SALES AND 26.3% OF SALES IN EUROPE (UP 300 BPS)
→ FULL-YEAR FINANCIAL TARGETS CONFIRMED
Key figures1 | Q3 2019 | YoY change | 9m 2019 | YoY change |
Sales | €3,422.2m | €10,221.7m | ||
On a reported basis | +3.3% | +3.6% | ||
On a constant and actual-day basis | +1.9% | +1.9% | ||
On a constant and same-day basis | +0.9% | +2.1% | ||
Same-day sales growth by geography | ||||
Europe | €1,780.8m | -0.7% | €5,425.7m | -0.4% |
France | €661.8m | +3.3% | €2,050.3m | +2.9% |
Scandinavia | €228.7m | +1.1% | €701,1m | +3.2% |
Benelux | €178.1m | +9.6% | €568.3m | +11.7% |
UK | €180.6m | -10.6% | €558.2m | -8.8% |
Germany | €162.0m | -17.2% | €481.2m | -19.6% |
North America | €1,335.2m | +2.8% | €3,918.9m | +5.9% |
USA | €1,045.7m | +1.8% | €3,107.2m | +6.1% |
Canada | €289.5m | +6.3% | €811.7m | +5.4% |
Asia-Pacific | €306.2m | +2.7% | €877.0m | +1.4% |
China | €122.8m | +7.6% | €357.9m | +8.6% |
Australia | €128.8m | +1.5% | €367.5m | -1.6% |
1 See definition in the Glossary section of this document
Patrick BERARD, Chief Executive Officer, said:
“Rexel posted sales growth for the twelfth consecutive quarter in Q3, demonstrating the continuing effectiveness of the various initiatives we have been implementing over the past three years. The third quarter saw a slowdown in growth, partly due to a more difficult environment in the industrial segment in the US and Germany. It also reflects a conscious decision by the group to be more selective in our mix of business in order to improve profitability and cash generation. Despite a challenging environment, we remain focused on reaching our full-year financial targets.”
SALES REVIEW FOR THE PERIOD ENDED SEPTEMBER 30, 2019
4 Unless otherwise stated, all comments are on a constant and adjusted basis and, for sales, at same number of working days.
SALES
In Q3, sales were up 3.3% year-on-year on a reported basis and up 0.9% on a constant and same-day basis, reflecting solid sales momentum in Canada, key European countries and China.
In the third quarter, Rexel posted sales of €3,422.2 million, up 3.3% on a reported basis, including:
On a constant and same-day basis, sales were up 0.9%, including a negative effect from the change in copper-based cable prices (-0.3% in Q3 19 vs +0.3% in Q3 18).
In 9m, Rexel posted sales of €10,221.7 million, up 3.6% on a reported basis. On a constant and same day basis, sales were up 2.1%, including a negative impact of 0.3% from the change in copper-based cable prices.
The 3.6% increase in sales on a reported basis included:
Europe (52% of Group sales): -0.7% in Q3 on a constant and same-day basis
In the third quarter, sales in Europe increased by 0.8% on a reported basis, including a limited negative currency effect of €1.4m (mainly due to the depreciation of the Swedish Krona against the euro). On a constant and same-day basis, sales were down 0.7% (or up 1.0% excluding branch closures in Germany and Spain).
North America (39% of Group sales): +2.8% in Q3 on a constant and same-day basis
In the third quarter, sales in North America were up 7.7% on a reported basis, including a positive currency effect of €55.5m (mainly due to the appreciation of the US dollar against the euro). On a constant and same-day basis, sales were up 2.8%, mainly driven by Canada.
Asia-Pacific (9% of Group sales): +2.7% in Q3 on a constant and same-day basis
In the third quarter, sales in Asia-Pacific were down 0.1% on a reported basis, including a negative scope effect of €10.4m following the disposal of our business in China in Q4 18 and a positive currency effect of €0.5m, mainly due to the appreciation of the US dollar against the euro. On a constant and same-day basis, sales were up 2.7%.
OUTLOOK
Consistent with our medium-term ambition and assuming no material changes in the macroeconomic environment, we target for 2019, at comparable scope of consolidation and exchange rates:
1 excluding (i) amortization of PPA and (ii) the non-recurring effect related to changes in copper-based cable prices. At comparable scope and 2018 average currency conditions, we estimate an impact of +€1 million on our 2019 adjusted EBITA
2 as calculated under the Senior Credit Agreement terms
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 2.
CALENDAR
February 13, 2020 Fourth-quarter and full-year 2019 results
April 21, 2020 First-quarter 2020 sales publication
April 21, 2020 Annual shareholders’ meeting
FINANCIAL INFORMATION
A slideshow of the third-quarter 2019 sales 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 some 2,000 branches in 26 countries, with nearly 27,000 employees. The Group’s sales were €13.37 billion in 2018. Rexel is listed on the Eurolist market of Euronext Paris (compartment A, ticker RXL, ISIN code FR0010451203). It is included in the following indices: SBF 120, CAC Mid 100, CAC AllTrade, CAC AllShares, FTSE EuroMid, STOXX600. Rexel is also part of the following SRI indices: FTSE4Good, Ethibel Sustainability Index Excellence Europe, Euronext VigeoEiris Eurozone 120, Dow Jones Sustainability Index Europe and STOXX® Global Climate Change Leaders, in recognition of its performance in corporate social responsibility (CSR). Rexel is on the CDP “Climate A List”.
For more information, visit Rexel’s web site at www.rexel.com
CONTACTS
FINANCIAL ANALYSTS / INVESTORS
Ludovic DEBAILLEUX | +33 1 42 85 76 12 | ludovic.debailleux@rexel.com |
PRESS
Brunswick: Thomas KAMM | +33 1 53 96 83 92 | 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 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.
RECURRING NET INCOME is defined as net income adjusted 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.
DISCLAIMER
The Group is exposed to fluctuations in copper prices in connection with its distribution of cable products. Cables accounted for approximately 14% 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 Document de Référence registered with the French Autorité des Marchés Financiers (AMF) on April 3, 2019 under number D.19-0264. 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 Document de Référence registered with the AMF on April 3, 2019 under number D.19-0264, as well as the consolidated financial statements and activity report for the 2018 fiscal year which may be obtained from Rexel’s website (www.rexel.com).
Attachment