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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Rexel SA | TG:E7V | Tradegate | Ordinary Share |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.38 | -1.55% | 24.20 | 24.15 | 24.24 | 24.35 | 23.97 | 24.35 | 844 | 22:50:07 |
Q4 SALES & FY 2023 RESULTSRecord sales, adjusted Ebita margin1 and free cash flowUpgraded full-year guidance fully achieved, with Ebita in the upper end of the rangeStrong free cash flow generation, demonstrating the strength and resilience of Rexel's model |
→ FY 23 sales of €19,153.4m, up +4.3% on a same-day basis
→ Sales of €4,725.3m in Q4 2023, down (1.4)% on a same day basis, on the back of a challenging base effect in electrification in Europe and lower demand in some end-markets
→ Digital penetration rate at 30% of sales in Q4 23, up +269bps
→ FY 23 adjusted EBITA margin of 6.8%, in the upper end of guidance, driven by growth in electrification trends in H1 and good execution of action plans leading to market share gains in H2
→ Recurring net income in FY 23 at €823.3m, compared to €911.8m in 2022, on a high comparable base as last year's earnings benefited from all-time high inflation tailwind on non-cable products
→ Record Free cash flow generation, demonstrating the strength and resilience of our model
→ Proposed dividend for 2023 to be maintained at record level of 1.20€ per share
→ Executing our capital allocation strategy with a healthy balance sheet: indebtedness ratio at 1.33x
→ 2024 outlook: Stable to slightly positive same-day sales growth, adjusted EBITA margin between 6.3% and 6.6% and conversion of free cash flow before interest and tax above 60%
→ During our June 7 CMD, we will present the initiatives implemented under the Power Up 2025 plan and share our updated mid-term prospects
Guillaume TEXIER, Chief Executive Officer, said: “Rexel had an outstanding year 2023, resulting in record annual sales, profit margin and free cash flow generation. This performance once again reinforces the strength and resilience of our business model. Results, fully in line with our upgraded guidance, were driven both by supportive electrification trends, which grew at four times the pace of traditional electric distribution sales, and by the excellent execution of our action plans. I am proud of these results and wish to thank our teams in all our geographies. It is their hard work, dedication and commitment that have made Rexel a more agile, more digital and more profitable company. Rexel’s enhanced resilience allows us to target an Adjusted Ebita margin of between 6.3% and 6.6% in 2024, even in a more mixed environment. Through our Power Up 2025 action plans, we have established a new baseline of performance and will continue to deliver superior service to our customers and superior returns to our shareholders.” |
1 Excluding non-recurring items in 2022
FINANCIAL REVIEW FOR THE PERIOD ENDED DECEMBER 31, 2023 |
MAIN FY 2023 FIGURES |
Key figures1 (€m) - Actual | FY 2023 | YoY change | Change excl. non recurring items |
Sales on a reported basis | 19,153.4 | +2.4 % | |
On a constant and actual-day basis | +4.2 % | ||
On a constant and same-day basis | +4.3 % | ||
Adjusted EBITA2 | 1,300.1 | (5.7) % | |
As a percentage of sales | 6.8 % | -71 bps | -3 bps |
Reported EBITA | 1,285.9 | (4.4) % | |
Operating income | 1,216.6 | (9.4) % | |
Net income | 774.7 | (16.0) % | |
Recurring net income | 823.3 | (9.7) % | |
FCF before interest and tax | 996.4 | +14.1 % | |
FCF conversion3 | 73 % | ||
Net debt at end of period | 1,961.5 | €503m increase |
1 See definition in the Glossary section of this document 2 Change at comparable scope of consolidation 3 EBITDAaL into FCF before interest and tax
SALES
FY sales were up +2.4% year-on-year on a reported basis and +4.3% on a constant and same-day basis.
Key figures (€m) | Q4 2023 | YoY change | FY 2023 | YoY change |
Sales on a reported basis | 4,725.3 | (1.6) % | 19,153.4 | +2.4 % |
On a constant and actual-day basis | (1.1) % | +4.2 % | ||
On a constant and same-day basis | (1.4) % | +4.3 % |
In FY 2023, Rexel posted sales of €19,153.4m, up +2.4% on a reported basis, boosted by the combination of organic growth and our acquisition strategy. They include:
In Q4, sales were down (1.6)% year-on-year on a reported basis and (1.4)% on a constant and same-day basis.
In the fourth-quarter, Rexel posted sales of €4,725.3m, down (1.6)% on a reported basis, including:
In Q4 2023, sales were down (1.4)% on a constant and same-day basis (or (1.1)% on a constant and actual-day basis). More specifically:
1 Including positive scope effect and added product categories (notably in HVAC segment)
Europe (52% of Group sales): (2.8)% in Q4 and +5.1% in FY on a constant and same-day basis
In the fourth-quarter, sales in Europe decreased by (0.7)% on a reported basis, including:
Key figures (€m) | Q4 2023 | YoY change | FY 2023 | YoY change |
Europe | 2,444.4 | (2.8) % | 9,619.1 | +5.1% |
France | 927.2 | (0.6) % | 3,668.7 | +5.5% |
Benelux | 430.9 | (5.6) % | 1,364.1 | +2.3% |
Germany | 244.2 | (2.0) % | 1,076.7 | +10.8% |
Nordics | 216.5 | (10.6) % | 925.9 | +1.2% |
UK | 189.2 | (3.7) % | 813.0 | +2.0% |
Switzerland | 185.5 | +5.0% | 693.0 | +8.4% |
North America (42% of Group sales): +0.4% in Q4 and +4.0% in FY on a constant and same-day basis
In the fourth-quarter, sales in North America were down (1.7)% on a reported basis due to the currency effect, including:
Key figures (€m) | Q4 2023 | YoY change | FY 2023 | YoY change |
North America | 1,965.8 | +0.4% | 8,231.6 | +4.0% |
United States | 1,607.3 | (0.1) % | 6,737.1 | +3.4% |
Gulf Central | +5.6% | +17.5% | ||
Mountain Plains | +5.5% | +10.3% | ||
Florida | +1.1% | +4.0% | ||
Southeast | -% | (0.2) % | ||
Northwest | (1.1) % | (3.0) % | ||
Midwest | (3.3) % | +7.8% | ||
California | (4.8) % | +4.5% | ||
Northeast | (6.6) % | (2.8) % | ||
Canada | 358.5 | +2.9% | 1,494.5 | +7.0% |
In North America, the overall good performance was driven by our capacity to capture reshoring trends and to enhance backlog execution.
Asia-Pacific (6% of Group sales): (1.4)% in Q4 and (0.1)% in FY on a constant and same-day basis
In the fourth-quarter, sales in Asia-Pacific were down (7.6)% on a reported basis due to the negative currency effect, including:
Key figures (€m) | Q4 2023 | YoY change | FY 2023 | YoY change |
Asia-Pacific | 315.2 | (1.4) % | 1,302.7 | (0.1) % |
Australia | 145.0 | +1.0% | 584.6 | +4.5% |
China | 126.8 | (0.1) % | 525.2 | (3.5) % |
PROFITABILITY
Adjusted EBITA margin at 6.8% in 2023, down -71 bps compared to 2022 or stable excluding non-recurring items that benefited 2022
FY 2023 (€m) | Europe | North America | Asia Pacific | Group |
Sales | 9,619 | 8,232 | 1,303 | 19,153 |
On a constant and actual-day basis | +4.5% | +4.4% | +0.1% | +4.2% |
On a constant and same-day basis | +5.1% | +4.0% | (0.1) % | +4.3% |
Adj. EBITA | 695 | 610 | 39 | 1,300* |
% of sales | 7.2% | 7.4% | 3.0% | 6.8% |
Change in bps as a % of sales | -80 bps | -79 bps | 109 bps | -71 bps |
*Including €(44)m for Corporate costs in FY 23
The 4.2% actual sales growth in FY 2023 translated into an adjusted EBITA margin of 6.8%.
Adjusted EBITA margin improved by +13bps from 6.7% in 2022 to 6.8% in 2023, restated for the non-recurring items from inventory price inflation on non-cable products, net of higher performance-linked bonuses, with :
1 One-off 2022 at scope and rate 2023 stands at -68bps
By half-year period, this stable adjusted EBITA evolution at 6.8% results from:
By geography, the stable evolution of our Adjusted EBITA margin can be explained as follows:
As a result, adjusted EBITA stood at €1,300.1m (vs. €1378.2m in 2022 comparable base) and reported EBITA stood at €1,285.9 million (including a negative one-off copper effect of €(14.2) million).
Focus on the bridge from EBITDA to Reported EBITA:
Key figures (€m) | FY 2022 | FY 2023 | YoY change |
EBITDA | 1,680.8 | 1,633.0 | (2.8) % |
% EBITDA margin | 9.0 % | 8.5 % | |
Depreciation Right of Use (IFRS 16) | (220.5) | (233.3) | |
Other depreciation and amortization | (115.4) | (113.8) | |
Reported EBITA | 1,344.8 | 1,285.9 | (4.4) % |
NET INCOME
Net income of €774.7 million in FY 2023 and recurring net income of €823.3 million
Operating income in the year stood at €1,216.6 million (vs €1,343.0 million in 2022).
Net financial expenses in the year amounted to €(167.7) million (vs. €(119.4) million in 2022), and can be broken down as follows:
Income tax in the year represented a charge of €(274.2) million (vs. €(301.2) million in 2022)
Net income in the year was €774.7 million (vs. €922.3 million in 2022).
Recurring net income amounted to €823.3 million in 2023, down (9.7)% compared to 2022, on a high comparable base 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 €996.4 million in 2023
Indebtedness ratio of 1.33x at December 31, 2023
In 2023, free cash flow before interest and tax was an inflow of €996.4 million (vs. €873.3 million in 2022), representing a free cash flow conversion rate (EBITDAaL into FCF before interest and taxes) of 73%, above guidance (> 60%). It included:
Below FCF before interest and tax, the cash flow statement took into account:
At December 31, 2023:
SENIOR CREDIT AGREEMENT |
On January 23rd, 2024, Rexel signed a new Senior Credit Agreement (SCA), with the following terms:
This new SCA reflects the trust of Rexel’s core banks in its management, strategy and prudent financial profile.
Taking into consideration the recently-renegotiated SCA, Group liquidity stood at €1.5bn at end-December 2023.
PROPOSED DIVIDEND FOR 2023 TO BE MAINTAINED AT RECORD LEVEL OF 1.20€ PER SHARE |
Rexel will propose to shareholders to maintain the dividend at a record level of 1.20€ per share, to be paid fully in cash. This represents a payout of 43% of the Group’s recurring net income, in line with Rexel’s policy of paying out at least 40% of recurring net income.
This dividend, payable in cash on May 17, 2024 (detachment date on May 16th), will be subject to approval at the Annual Shareholders’ Meeting to be held in Paris on April 30, 2024.
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 and 2023 achievements 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 | 2023 achievements |
4% to 7% organic growth over 4 years | 14.1% | 4.3% |
6.5% to 7% adj. Ebita margin in 2025 | 7.3%1 | 6.8% |
FCF conversion above 60% each year | 61% | 73% |
40% of digital sales in 2025 | 24%2 of sales | 28% of sales(30% of digital sales in Q4 23) |
x3 the number of automatized DC | 63 automated DC | 9 automated DC |
Sales growth in Electrification: x2 the pace of our traditional ED business | 2.1x | c. 4.3x |
Share buyback of €400m over 4 years | 17% completed | 50% completed |
M&A contribution to sales up to €2bn in 4 years | c. €250m | c. €1bn cumulated |
Divestments of between €200m & €500m of sales | c. €480m completed | c. €480m completed |
During our June 7 CMD, we will present the initiatives implemented under Power Up 2025 and share our updated mid-term prospects.
OUTLOOK |
We expect 2024 end-markets to evolve as follows:
In addition, while backlog execution in North America will still be a tailwind for 2024, we will continue to face a strong comparable base on electrification categories in H1.
In this environment, we target to deliver resilient profitability thanks to our optimization efforts.
We will further capitalize on the past 2 years’ structural changes and more specifically:
At the same time, we also see potential for more profitability improvement:
We anticipate for 2024, 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. 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 |
April 30, 2024 First-quarter 2024 salesApril 30, 2024 Annual Shareholders’ Meeting May 16, 2024 Detachment date of the dividendMay 17, 2024 Dividend paymentJune 7, 2024 Capital Markets DayJuly 30, 2024 H1 2024 results
FINANCIAL INFORMATION |
Full-year 2023 financial report is available on the Group’s website (www.rexel.com).A slideshow of the fourth-quarter sales and full-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 1,950 branches in 19 countries, with more than 27,000 employees. The Group’s sales were €19.2 billion in 2023. 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 |
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 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 15% 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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