Rexel Sa · EURONEXT:RXL
Rexel Sa — Rexel Sa Ord — Q4 2023 Earnings Presentation
33 slides from Rexel Sa's earnings presentation, Feb 14, 2024
Slide 1: Fourth-quarter sales & FY 2023 results
Fourth-quarter sales & FY 2023 results February 14, 2024 2023 consolidated financial statements were authorized for issue by the Board of Directors held on February 14th, 2024
Slide 2: Key highlights
RexeL — Key highlights a world of energy
Slide 3: Another record year in 2023
Another record year in 2023 Upgraded FY 23 guidance fully achieved • Record sales at €19.2bn • Record adjusted Ebita at 6.8%, in the upper end of the guidance • Record FCF conversion, significantly above guidance at 73% • Solid execution of our value-creating M&A strategy • Continued high shareholde
Slide 4: New sales record in FY 23
New sales record in FY 23 €19.2bn +4.3% Reported sales Same-day sales growth ✓ 2023 upgraded guidance: upper end of the 2%-6% range 20000 19,153 18,702 18000 • Boosted by several mega trends: Electrification in Europe, especially in H1, reshoring and stimulus plans 16000 14,690 in the US 13,742 13,3
Slide 5: Record adjusted Ebita margin, at the upper end of the guidance
Record adjusted Ebita margin, at the upper end of the guidance 6.8% Adjusted Ebita margin (%) ✓ 2023 upgraded guidance: c.6.6%-6.9% 1 400 8% 6.8% 6.7%3 7% 1 200 5.8%2 5.0% 6% 1 000 4.8% 5% • Record Adjusted Ebita margin, excl. one-offs, at 6.8% 4.2%1 4.4%1 4.2% 800 4% 600 • +13bps adjusted Ebita mar
Slide 6: FCF conversion significantly above guidance, driven by North America
FCF conversion significantly above guidance, driven by North America 73% FCF before Interest and tax conversion ✓ 2023 guidance: FCF conversion > 60% 1 200 120% 101% 996 • Record FCF before Interest and tax, close to €1bn, 1 000 100% 873 demonstrating the strength and resilience of Rexel’s 800 69%1
Slide 7: Q4 & FY 2023 Group financial review
Q4 & FY 2023 Group financial review
Slide 8: Q4 Sales: M&A contribution more than offset the organic decrease
Q4 Sales: M&A contribution more than offset the organic decrease +3.9% €4,802m €4,777m +0.3% €4,725m -1.8% -1.4% -2.7% Q4 23 reported sales down 1.6%: • Negative forex and same-day Actual-day evolution -1.1% sales growth • First positive contribution from Wasco acquisition Q4 2022 Forex Acquisitions
Slide 9: Positive overall non-cable selling prices; volume resilience in North America in Q4
Positive overall non-cable selling prices; volume resilience in North America in Q4 Group -1.4% 4,777 4,725 Europe (52% Group sales) North America Asia Pacific (42% Group sales) (6% Group sales) -2.8% +0.4% 2,523 2,444 -1.4% Q4 22 Q4 23 1,933 1,966 320 315 Q4 22 Q4 23 Selling price evolution Q4 22 Q
Slide 10: Q4 sales in Europe: Market share gains in our key countries
Q4 sales in Europe: Market share gains in our key countries By country By product • Negative electrification contribution, mostly solar, both in volume and price, on challenging base effect • Market outperformance in France, Germany and Switzerland • Positive pricing on our core products • Market sh
Slide 11: Q4 sales in North America: Volumes boosted by good backlog execution
Q4 sales in North America: Volumes boosted by good backlog execution By country / Region By product categories • North America • Positive volume mitigated by deflation on • Electrification categories up mid-single digit in Q4, commodity-related products boosted by industrial automation • United Stat
Slide 12: High level of backlogs, providing visibility
High level of backlogs, providing visibility US Canada c. 2.3 months of sales c. 3.6 months of sales 222 210 288 256 165 144 100 95 100 96 12.2019 12.2020 12.2021 12.2022 12.2023 12.2019 12.2020 12.2021 12.2022 12.2023 (base 100) (base 100) High level of backlogs, with strong order intake almost com
Slide 13: FY 23 reported sales: Up 2.4%, supported by organic growth & acquisitions
FY 23 reported sales: Up 2.4%, supported by organic growth & acquisitions +3.2% €19,153m €18,702m +2.7% +2.0% -0.9% -0.1% €18,387m -2.2% -2.2% Scope Actual-day evolution +0.5% +4.2% FY 2022 Forex Acquisitions Disposals FY 2022 Volume Non-cable Copper- Calendar FY 2023 comparable price based cable pr
Slide 14: FY 23 adjusted Ebita margin maintained at record level
FY 23 adjusted Ebita margin maintained at record level -3 bps 7.3% +161 bps 6.8% +76 bps 6.8% 6.7% -661 bps -45 bps -34 bps Adj. EBITA 2022 One-offs 2022 Adj. EBITA 2022 Portfolio Adj. EBITA Payrise inflation Other opex Actions plans Adj. EBITA excl. One-offs management 2022 inflation 2023 comparabl
Slide 15: Robust earnings in 2023
Robust earnings in 2023 Main P&L items Other income & expenses €(45)m Including €12.9m in restructuring €1,300m €823m Net financial expenses €(168)m Recurring net income Adjusted EBITA Down -9.7% as 2022 benefited from all-time- high inflation tailwind on non-cable products; Effective interest rate
Slide 16: Disciplined working capital and capex management
Disciplined working capital and capex management Main FCF items Trade working capital €(83)m €1,356m Stable TWCR/sales at 14.1% €996m 73% conversion Non-trade working capital Free cash flow EBITDAaL €(104)m before interest & tax Net capex €153m Stable gross capex/sales at 0.8% 16
Slide 17: Maintaining high shareholder returns while investing in value-creating acquisitions
Maintaining high shareholder returns while investing in value-creating acquisitions Free cash flow Main FCF items before interest & tax €996m Financial investment €561m €568m €503m €(503)m Dividend Free cash flow €362m Increase innetnet Change in debtdebt after interest & tax Post cash out for Net i
Slide 18: Healthy balance sheet: Debt maturity extended and SCA renewed
Healthy balance sheet: Debt maturity extended and SCA renewed Gross debt maturity breakdown and liquidity as of December 31, 20231 1000 1,000 800 400 600 50 68 Recent operations €m 400 874 600 700 514 200 400 36 11 0 50 29 2024 2025 2026 2027 2028 2029 2030 Sustainability Linked-Bonds Medium term no
Slide 19: Proposed 2023 dividend maintained at record level of €1.20
Proposed 2023 dividend maintained at record level of €1.20 €1.20 €1.20 €0.75 40% 43% €0.44 €0.46 €0.40 €0.40 €0.42 Covid crisis 40% 48% 44% 41% 50% 45% 2015 2016 2017 2018 2019 2020 2021 2022 2023 Dividend per share (€) X% Pay-out ratio (% of recurring net income) Payout ratio AGM To be paid on 43%
Slide 20: Delivering on Power Up 25 - Status update
Delivering on Power Up 25- Status update
Slide 21: Tech-driven BtoB distributor
Tech-driven BtoB distributor Mid-term ambitions 2022 2023 40% in 2025 24%1 of sales 28% of sales Digital (30% of digital sales in Q4 2023) c. x3 the number of 6² automated DCs 9 automated DCs Supply Chain automated DC 1. Restated for the disposal of Norway in 2023 (25% on a reported basis) 2. Exclud
Slide 22: Best-in-class BtB player, with c. €5.5bn digital sales
Best-in-class BtB player, with c. €5.5bn digital sales Digital sales evolution since 2011 (% of group sales) • Rexel digital channel becoming a way of life for our customers 30% • In association with our physical network, a 24% unique value proposition 18% 13% • Full range <D+1 in all European count
Slide 23: Accelerating deployment of automated supply chain solutions
Accelerating deployment of automated supply chain solutions Germany DC Austria DC UK DC, near London • Adding inventory capacity • Increasing proximity and • Improving customer delivery to customer service around Vienna Day +1 • Addressing new regions around Frankfurt • Logistics model moving from h
Slide 24: Actively focusing on fast-growing market segments
Actively focusing on fast-growing market segments Mid-term ambitions 2022 2023 Electrification c. x2 the pace of our c. 4.3x 2.1x traditional ED business Acquisitions c. €1bn up to €2bn of sales c. €250m in 2022-25 cumulated 24
Slide 25: Electrification solidly supportive, but facing a strong 2023 comparable base
Electrification solidly supportive, but facing a strong 2023 comparable base 2021 2022 2023 2024 Economic incentives (energy prices) Government incentives, investment and requirements Corporate net zero agendas Industrial reshoring trends Global electrification trends 25
Slide 26: Acquisitions as a powerful growth engine
Acquisitions as a powerful growth engine Synergistic Growth in consolidation adjacencies • 2.3b€ of sales acquired since 2021 through 11 deals France France • Leveraging M&A to reinforce local market Europe Belgium share or position the Group on promising France Netherlands adjacent growth markets •
Slide 27: Delivering on financial goals: profitable, cash-generating and resilient
Delivering on financial goals: profitable, cash-generating and resilient Mid-term ambitions 2023 CAGR 2021-2025 c.4%-7% 4.3% in 2023 same-day sales on average CAGR 21-23 : 9.2% Adj. EBITA margin 6.8% 6.5%-7% in 2025 Free cash flow conversion >60% (each year) 73% ratio over 2022-25 27
Slide 28: A consistent shareholder-friendly policy
A consistent shareholder-friendly policy Mid-term ambitions 2022 2023 Payout ratio At least 40% 40% distributed 43% proposed Share buyback c. €400m 17% completed 50% completed 28
Slide 29: Outlook
a world of energy Outlook
Slide 30: 2024 – A mixed market environment
2024 – A mixed market environment • Commercial construction (40% exposure): Globally dynamic, especially in North America, with some sub-segments affected by interest rates • Industry (30% exposure): Solid with support from re-shoring trends and stimulus plans • Residential renovation (20% exposure)
Slide 31: Delivering resilient profitability thanks to our optimization plans
Delivering resilient profitability thanks to our optimization plans • Capitalize on the past 2 years’ structural changes… • Portfolio management to focus on growing, profitable segments and countries • Digital progression driving increased internal efficiency and productivity • Focus on customer tar
Slide 32: FY 2024 guidance
FY 2024 guidance Stable to slightly positive, with high 6.3% - 6.6% > 60% comparable base in H1 Same-day Adjusted EBITA margin1 Free cash flow conversion2 growth 1. Excluding (i) amortization of PPA and (ii) the non-recurring effect related to changes in copper-based cable prices. 32 2. FCF Before I
Slide 33: June CMD to update our strategic roadmap
June CMD to update our strategic roadmap • Well on track to achieve our 2025 ambition, executing on both pillars of the Power Up 25 strategic plan • Excel on fundamentals • Strive to be a differentiated leader • The strategic roadmap update will be presented at a Capital Markets Day to be held on Ju