Rexel Sa · EURONEXT:RXL
Rexel Sa — H1 2003 Earnings Presentation
40 slides from Rexel Sa's earnings presentation, Sep 3, 2003
Slide 1: Rexel Group First Half Year of 2003
REXEL Group FIRST HALF YEAR OF 2003 1 3 September 2003
Slide 2: Summary
SUMMARY GROUP PROFILE HIGHLIGHTS 1st HALF YEAR OF 2003 FINANCIAL RESULTS STRATEGIC ACTIONS CONCLUSION 2 3 September 2003
Slide 3: Group Profile
GROUP PROFILE 3 3 September 2003
Slide 4: The world leader with a 7% market share
GROUP PROFILE The world leader with a 7% market share Present on 4 continents and in 29 countries 1,701 branches and 21,720 employees Americas: Europe: North 57% of sales and 906 branches, of which 36% of sales and 449 are in France 509 branches, of which 293 are in the US and 216 in Canada South 1%
Slide 5: Position by country
GROUP PROFILE Position by country The world leader in the distribution of electrical supplies Position Percentage of sales France 1 29% Canada 1 10% Austria 1 3% New Zealand 1 2% Central Europe 1 2% Australia 2 5% Netherlands 2 2% Sweden 3 2% Germany 4 6% United Kingdom 4 4% United States 5 26% TOTA
Slide 6: Highlights 1st Half Year of 2003
HIGHLIGHTS 1st HALF YEAR OF 2003 6 3 September 2003
Slide 7: Highlights: low activity, reorganisations, financial structure
HIGHLIGHTS 1st HALF YEAR OF 2003 Global activity level at a low point Implementation and adjustment of reorganisations Improvement of the financial structure 7 3 September 2003
Slide 8: Global activity level at a low point
HIGHLIGHTS 1st HALF YEAR OF 2003 Global activity level at a low point Sales Gross margin increase € 3,332 M 25.0% of sales down 2.8% in like-for-like terms (24.8% 1st half year of 2002) down 10.5% in real terms Good resilience of Net result before amortization of goodwill operating result € 43 M € 1
Slide 9: Changes in macro-economic reference indicators
HIGHLIGHTS 1st HALF YEAR OF 2003 Global activity level at a low point Changes in macro-economic reference indicators: - Residential construction performed well outside Germany - Decline of non-residential construction - Stability of business investment Residential Trend / Non-Residential Trend / Bus
Slide 10: Rexel sales trend over 12-month rolling basis
HIGHLIGHTS 1st HALF YEAR OF 2003 Global activity level at a low point REXEL sales trend over 12-month rolling basis 0.0% -2.9% -4.5% -3.5% -3,5% -3,7% -4.3% -0.5% -4.9% -5.0% -4.9% -5.6% -5.7% -5.8% -6.2% -6.2% -6.6% -6.,5% -7.1% -7.2% -1.0% 01. 2002 08. 2002 06. 2003 10 3 September 2003
Slide 11: Implementation and adjustment of reorganisations
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Staff Logistics and transport Information systems Trading and organisation 11 3 September 2003
Slide 12: Staff
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Staff Changes on a comparable structural basis (staff at the end of the period) 23,820 Since 01.01.2002 : 24000 23,159 - 2,100 people on a comparable structural 23500 basis: 22,564 23000 . Europe - 1,200 22500 -2.6 % .
Slide 13: Logistics and transport: cost of processing an order line
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Logistics and transport: Change in the cost of processing* an order line France Logistics centres: drop from € 2.31 at 30.06.02 to € 2.14 at 30.06.03 January February Marc h April May June June c umulative Franc e 2002
Slide 14: Logistics and transport
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Logistics and transport UK Closure of the Magna Park centre in May. Redeployment to 6 regional centres Brazil Resizing of the logistics centre at Sao Paulo. Reduction by 1,500 sqm Spain Redefinition of the logistics ar
Slide 15: Strengthening of the American logistic hubs
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Strengthening of the American logistic hubs: Change in number of linked branches HUBS 2002 2003 UPPER MARLBORO 31 41 HOUSTON 7 7 SAINT LOUIS 5 5 DALLAS 1 4 SAN LEANDRO 0 3 ATLANTA 0 2 ORLANDO 0 2 TOTAL 44 64 7 15 3 Sep
Slide 16: Information systems
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Information systems Consolidating existing systems: - 1 system in the Netherlands, 1 in the Czech Republic - Move from 12 to 9 applications in France (from 9 to 5 in 2004) and from 11 to 8 in the US Moving towards an i
Slide 17: Trading and organisation
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Trading and organisation France Setting up central purchasing for cables Significant savings on purchases of some types of cable United States Implementation of the Sales Management Process, resulting in greater sales
Slide 18: Trading and organisation: branch changes
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Trading and organisation Number of Openings & Closures & 31.12.02 Disposals 30.06.03 branches acquisitions transfers Europe 1,005 7 -25 -81 * 906 France 453 0 -3 -1 449 Europe excluding France 552 7 -22 -80 457 America
Slide 19: Savings 2nd half 2002 / 1st half 2003
HIGHLIGHTS 1st HALF YEAR OF 2003 Implementation and adjustment of reorganisations Savings 2nd half year 2002/1st half year 2003 in line with objectives (comparable structural and exchange rate basis) €M Average no. of staff: Staff reductions -16.1 2nd half year 2002 1st half year 2003 23,623 Ì 22,78
Slide 20: Strengthening the financial structure
HIGHLIGHTS 1st HALF YEAR OF 2003 Improvement of the financial structure Strengthening the financial structure and concentrating on core business 19 March Disposal of property portfolio for € 41 M 30 June Disposal of specialised distribution business in security equipment for € 112 M 30 June Capital
Slide 21: Corporate governance
HIGHLIGHTS 1st HALF YEAR OF 2003 Corporate governance Strengthened control Appointment of two independent directors Creation of three specialised Committees (nomination and compensation, audit, strategy) Set up of Internal Regulation for the Board of directors (tasks, composition, remit, functioning
Slide 22: Financial Results
FINANCIAL RESULTS 22 3 September 2003
Slide 23: Sales
FINANCIAL RESULTS Sales €M Acquisitions Like-for-like growth Exchange rate 11 changes 3,722 (102) (299) 3,332 - 2.8 % on a comparable structural, exchange rate, and day-year basis Consolidated 30.06.02: Consolidated 30.06.03: € 3,722 M € 3,332 M 23 3 September 2003
Slide 24: Changes in activity
FINANCIAL RESULTS Sales Changes in activity on a comparable structural, exchange rate, and day-year basis -3.0% -2.7% -2.8% -6.8% -6.6% -6.7% Quarter 1 Quarter 2 1st Half Year 2002 2003 Europe -3.1% 1st half year 2003 Americas -3.1% Asia/Pacific +1.2% 24 3 September 2003
Slide 25: Changes by area
FINANCIAL RESULTS Sales Changes by area On a comparable structural, exchange % of Group rate, and day-year Q1 2003 Q2 2003 S1 2003 basis sales Europe -3.0% -3.3% -3.1% 57% France -1.4% -2.7% -2.0% 29% Europe excluding France -4.5% -3.9% -4.2% 28% Americas -3.6% -2.5% -3.1% 37% North America -3.6% -2
Slide 26: Increase in gross margin
FINANCIAL RESULTS Gross margin Increase in gross margin 25.0% 24.8% 1st half year 2003: Europe 26.8% Americas 21.7% * Asia/Pacific 27.3% *Sales mix : 66% stock sales 34% direct sales 30.06.2002 30.06.2003 26 3 September 2003
Slide 27: Operating profitability by area
FINANCIAL RESULTS Operating profitabilty Changes by area 4.1% 3.6% 1st half year 2003: Europe 3.7 % Americas 3.4 % Asia/Pacific 4.0 % 30.06.2002 30.06.2003 27 3 September 2003
Slide 28: Income statement
FINANCIAL RESULTS Income statement €M Financial result Exceptional 119.4 result Taxes (41.7) Amortization (13.7) of goodwill (20.7) (16.3) 27.0 Operating result: Net result Group’s € 119.4 M share: € 27.0 M 28 3 September 2003
Slide 29: Improvement of the financial structure
FINANCIAL RESULTS Balance sheet Improvement of the financial structure Stockholders’ equity 1,385 1,024 + 35 % Net debt 1,029 - 46 % 552 31.12.2002 30.06.2003 Variation in stockholders’ equity in € M: 31.12.2002 30.06.2003 Stockholders’ equity at 31.12.02 1,024 Capital increase and others 407 Divide
Slide 30: Statement of cash flows
FINANCIAL RESULTS Statement of cash flows in € M Operating result 119.4 Depreciation and changes in provisions 20.0 Internally generated funds from operations 139.4 Cash flow from financial operations -40.4 Flows from non-recurring income and taxes -29.1 Internally generated funds 69.9 Reduction in
Slide 31: Change in WCR
FINANCIAL RESULTS Change in WCR in € M Re duc tio n in o pe rating WCR - 70.6 Stocks -49.2 Accounts receivable -35.0 Trade payable 65.0 Other debtors and creditors -51.4 Reduction in sales of receivables 103.8 Increase in WCR 33.2 31 3 September 2003
Slide 32: Operating investments
FINANCIAL RESULTS Operating investments Fall in gross investments: down 55% (€ 48.3 M in the 1st half year of 2002) in € M Gross operating investments 21.9 of which Branches 6.1 Information systems 10.7 Logistics and other 5.1 Disposals -35.3 Net operating investments -13.4 32 3 September 2003
Slide 33: Strategic Actions
STRATEGIC ACTIONS 33 3 September 2003
Slide 34: Strategic actions overview
STRATEGIC ACTIONS Capturing targeted market shares Supplier relationships Proximity management 34 3 September 2003
Slide 35: Capture targeted market shares
STRATEGIC ACTIONS Capture targeted market shares Customer segmentation targeted at small and medium- sized contractors Strengthening of our positions through external growth in certain economic areas: - areas where market share is low: Italy (3%), United Kingdom (6%), some regions of the United Stat
Slide 36: Supplier relationships
STRATEGIC ACTIONS Supplier relationships Redefine the balance of supplier relations between Group, Country and Branch, based on a partnership spirit Optimise and concentrate purchases Strengthen shared sales developments 36 3 September 2003
Slide 37: Proximity management
STRATEGIC ACTIONS Proximity management Emphasize a local commercial approach: - attain 15% to 20% market share at local level - increase responsibility at field level: supplier relationships, sales policy, cost optimisation, human resources Adapt and optimise the supply chain to local conditions 37
Slide 38: Conclusion
CONCLUSION 38 3 September 2003
Slide 39: Conclusion
CONCLUSION Global leadership as well as in the main countries of activity Rexel first interlocutor of its customers Good resilience of gross margin and operating profitability at the bottom of the cycle Control of cost adjustments Strengthened financial and control structures STRONG LEVERAGE ON ACTI
Slide 40: Rexel Group First Half Year of 2003
REXEL Group FIRST HALF YEAR OF 2003 40 3 September 2003