Rexel Sa · EURONEXT:RXL
Rexel Sa — FY2002 Earnings Presentation
37 slides from Rexel Sa's earnings presentation, Mar 4, 2003
Slide 1: Rexel Group 2002 Annual Results
REXEL Group 2002 ANNUAL RESULTS 1 4 March 2003
Slide 2: Agenda
GROUP PROFILE 2002 HIGHLIGHTS MONITORING OPERATING OBJECTIVES FINANCIAL RESULTS STRATEGIC ACTIONS CONCLUSION 2 4 March 2003
Slide 3: Group Profile
GROUP PROFILE N°1 (7% global market share) Present on 4 continents and in 32 countries 1804 branches and 23 200 employees 2002 sales: € 7.374 billion North America: Europe: 39% of sales and 54% of sales and 511 branches, 1,005 branches, of which of which 297 are in the 453 are in France US and 214 i
Slide 4: Distribution of sales by product and client type
GROUP PROFILE Distribution of sales by product type Distribution of sales by client type 2002 2% 4% 3% 41% 9% 10% 10% 18% 21% 22% 60% Installation equipment Conduits and cables Contractors Industry Commercial Sector Others Lighting Security and communication Climate control Tools White and brown pro
Slide 5: 2002 Highlights: New management and restructuring plan
2002 HIGHLIGHTS New management Implementation of 2002-2003 restructuring plan: - workforce - logistics - information systems Industrial investment and non-residential construction cycles at a low point 5 4 March 2003
Slide 6: Gross margin increased in a difficult environment
2002 HIGHLIGHTS In a difficult environment ... gross margin increased: Sales € 7.374 billion 24.6% of sales in 2002 down 5.0% in like-for-like terms (24.5% in 2001) down 7.3% in real terms Operating result on target: Net result before amortization of goodwill € 292 m €4m 4.0% of sales (net result Gr
Slide 7: Monitoring Operating Objectives
MONITORING OPERATING OBJECTIVES 7 4 March 2003
Slide 8: Monitoring operating objectives
MONITORING OPERATING OBJECTIVES Lowering costs Improving logistics and transport Upgrading systems Leveraging sales power 8 4 March 2003
Slide 9: Lowering costs: adaptation of structures
LOWERING COSTS Adaptation of structures ... Preserving the sales force - 1 256 job reductions W orkforce in 2002 at constant scope, of which: grow th 2002/2001 South America 10% Oceania and Asia 4% Sales -3.3% Logistics -6.6% North America 32% Europe Marketing/Administration -8.6% 54% - 46 net branc
Slide 10: Improving logistics and transport
IMPROVING LOGISTICS AND TRANSPORT Summary of objectives Achievements Improve productivity Fine-tuning of logistics structures in Spain, Italy and Brazil € 2.29 cost per order line for all new generation centres compared with € 2.8 in 2001 Optimise supplier/client flows Improvement of special orders
Slide 11: Upgrading information systems
UPGRADING INFORMATION SYSTEMS Summary of objectives Achievements Revise timing of outstanding Negotiations finalised with projects: outsourcing and lead partner; talks under way deployment of integrated systems with others Modernise systems and Unification of systems processes in Germany and Belgium
Slide 12: Leveraging sales power
LEVERAGING SALES POWER Increase in percentage of workforce associated with the sales: from 55% in 2001 to 57% in 2002 Consolidation of sales training: 4,700 staff underwent training in 2002, compared with 4,000 in 2001 Expansion of specialist sales forces at regional level 12 4 March 2003
Slide 13: Leveraging sales power: branch network and product offer
LEVERAGING SALES POWER Optimisation and modernisation of branch network . € 27 m of investments, of which: . 60% in Europe . 30% in Oceania . 8% in North America . 2% in South America Enhancement of product offer: . promotional campaigns . national product offers Analysis of purchasing / client hist
Slide 14: Financial Results
FINANCIAL RESULTS 14 4 March 2003
Slide 15: 2002 Sales by geographical area
2002 SALES: distribution by geographical area as % Growth* in € m of sales 2002/2001 in 2002 North America 2,849 39% - 7.8% Europe exc. France 2,048 28% - 5.0% France 1,942 26% - 2.0% Oceania / Asia 451 6% - 0.7% South America 84 1% - 3.0% TOTAL 7,374 100% - 5.0% 15 * measured on a constant structur
Slide 16: Growth in monthly sales 2002
GROWTH IN MONTHLY SALES 2002 OVER A 12-MONTH PERIOD 0,0% -5,0% -4,7% -5,1% -5,1% -5,8% -6,0% -5,9% -6,5% -6,4% -6,9% -6,7% -7,3% -7,4% -10,0% 16 Jan. 02 Feb. 02 Mar. 02 April 02 May 02 June 02 July 02 Aug. 02 Sept. 02 Oct. 02 Nov. 02 Dec. 02 4 March 2003
Slide 17: 2002 Consolidated sales: -7.3%
2002 CONSOLIDATED SALES: - 7.3% €m Exchange rate Disposals changes Like-for-like Acquisitions growth (3) - 5.0% 17 (198) (400) Consolidated total 31.12.2001: Consolidated total 31.12.2002: € 7,958 m € 7,374 m 17 4 March 2003
Slide 18: Impact of exchange rate changes
Dollar € 53 m Canadian Real € 16 m Brazilian 4 March 2003 € 129 m US Dollar 31/12/01 14/01/02 28/01/02 11/02/02 Impact of Group consolidation in € 25/02/02 11/03/02 25/03/02 08/04/02 22/04/02 06/05/02 20/05/02 03/06/02 17/06/02 01/07/02 15/07/02 29/07/02 12/08/02 26/08/02 09/09/02 23/09/02 07/10/02
Slide 19: 2002: Improvement in gross margin rate
2002: IMPROVEMENT IN GROSS MARGIN RATE Strong resilience power Improvement potential 24,5% 24,6% Sales North America 1 Europe France exc. F North 31.12.2001 31.12.2002 America 2 Oceania South America Margin 24.6% 1: stock sales (62% of sales) 2: direct sales (38% of sales) 19 4 March 2003
Slide 20: 2002: Operating profitability by geographical area
2002: OPERATING PROFITABILITY BY GEOGRAPHICAL AREA Targeted improvement potential Sales North America Europe France exc. F Oceania South America Operating result 4.0% 20 4 March 2003
Slide 21: Net result 2002
NET RESULT 2002 €m Operating result Financial result 292.0 (97.6) Exceptional result (162.7) Taxes Amortization of goodwill (27.7) (35.2) (31.2) Net result group’s share 21 4 March 2003
Slide 22: Exceptional charges 2002
EXCEPTIONAL CHARGES 2002 Net result largely affected by exceptional restructuring charges: - Restructuring & reorganisation € 96.1 m - Exceptional depreciation € 58.9 m - Other € 7.7 m TOTAL € 162.7 m 22 4 March 2003
Slide 23: Balance sheet
BALANCE SHEET Stockholders’ equity €m 1343 Net debt 1024 €m 1148 1029 31.12.2001 31.12.2002 Variation in stockholders’ equity 2002: Stockholders’ equity 2001 1343 Conversion rate adjustments - 151 Dividends - 105 31.12.2001 31.12.2002 2002 result - 31 Other - 32 Total - 319 Stockholders’ equity 2002
Slide 24: 2002 Consolidated statement of cash flows
2002 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flow remains significant in € m Operating Result 292.0 Depreciation 56.6 Changes in provisions - 7.5 Internally generated funds from 341.1 operations Cash flow from financial operations - 95.5 Cash flow from non-recurring income and expenses - 73.8 Cash
Slide 25: Reduction in WCR
REDUCTION IN WCR in € m 2002/2001 Reduction in operating WCR - 58.4 Stocks - 25.4 Accounts receivable - 47.3 Trade payables 14.3 Reduction in non-operating WRC - 51.3 WCR reduction - 109.7 25 4 March 2003
Slide 26: 2002: Investment selectivity
2002: INVESTMENT SELECTIVITY € 113 m in 2001, € 83 m in 2002 (-27%) in € m Gross operating investments 82.7 of which Branches 27.2 Information Systems 49.9 Logistics and other 5.6 Disposals -51.5 Net operating investments 31.2 26 4 March 2003
Slide 27: 2002 Dividend
2002 DIVIDEND PROPOSED DIVIDEND: (35% Pay-Out on normalized net result) Gross dividend € 48.9 m Gross dividend per share € 1.03* * including a tax credit of € 0.08 27 4 March 2003
Slide 28: Strategic Actions
STRATEGIC ACTIONS 28 4 March 2003
Slide 29: Strategic actions
STRATEGIC ACTIONS Continue implementation of restructuring plan Capture market share through internal growth Decentralise management – step up control Optimize supplier partnerships Target high-growth areas: e.g. Eastern Europe & Oceania/China Select investments 29 4 March 2003
Slide 30: Capture market share through internal growth
CAPTURE MARKET SHARE THROUGH INTERNAL GROWTH Customer segmentation targeted at: - Small/medium-sized contractors - Recapture customers and increase rate of penetration - Project specification Optimization of product offer and sales drives, particularly for value added items: - 100 000 new references
Slide 31: Capture market share through internal growth
CAPTURE MARKET SHARE THROUGH INTERNAL GROWTH Balance market mix Monitor monthly sales performance indicators e.g. new customers/ex-customers Deploy US Sales Management Process in other countries 31 4 March 2003
Slide 32: Optimize supplier partnerships
OPTIMIZE SUPPLIER PARTNERHIPS Optimization of purchasing and business relations with preferred strategic partners More than 25% of purchases made from the top 5 suppliers in 2002 Target: 95% of sales with around 450 suppliers 32 4 March 2003
Slide 33: Target countries with high growth potential
TARGET COUNTRIES WITH HIGH GROWTH POTENTIAL Double-digit industry growth Eastern Europe High potential in residential and commercial sectors 10% market share with REXEL-generated sales of € 163m GDP growth of between 3 and 3.5% Oceania Market leader in New Zealand (more than 40% market share) N° 2 i
Slide 34: Select investments
SELECT INVESTMENTS Target countries where Group already present - Consolidation of market share in geographical areas or market segments: e.g. Ermann/Highspeed Cabling in Austria - Leverage: logistics, client portfolio, information systems - Due diligence and management integration capability Potent
Slide 35: Conclusion
CONCLUSION 35 4 March 2003
Slide 36: Conclusion
CONCLUSION No economic recovery recorded in the first two months of 2003 Pursuit of 2002-2003 restructuring plan tailored to economic climate REXEL gearing up for short and medium-term operating profitability improvement 36 4 March 2003
Slide 37: Rexel Group 2002 Annual Results
REXEL Group 2002 ANNUAL RESULTS 37 4 March 2003