Rexel Reports First-Quarter 2023 Sales

In the first quarter 2023, Rexel posted sales of €4,927.9m, up +12.6% on a reported basis, including:

• A positive currency effect of €32.3 million (i.e. +0.7% of Q1 2022 sales), mainly due to the appreciation of the US dollar against the euro
• A positive net scope effect of €23.9 million (i.e. +0.5% of Q1 2022 sales) from our active portfolio management, with favorable impacts from acquired companies offsetting disposals.
  • Acquisitions of Horizon and Buckles-Smith, two specialists of Industrial Automation distribution in the US, as well as Trilec, the number 3 player in Belgium, and LTL in Canada, contributing to the positive scope effect
  • Disposal effects reflecting the sale of Rexel’s activities in Spain and Norway (closing completed ahead of schedule on March 1st), as well as of activities in Portugal and Russia, to a lesser extent
• A positive calendar effect of +1.0%.On a constant and same-day basis, sales were up +10.1%, as a result of:

• An excellent performance in Europe and North America on more difficult base effects, offsetting lower growth in Asia-Pacific.
• Strong underlying trends from electrification and growing demand for energy efficiency solutions, boosted by government subsidies and corporate agendas, as illustrated by the growth of product categories such as PV, EV, Industrial Automation or HVAC, which grew by c. +31% in Q1, above Group average, and represented c.22% of sales. This more than offset signs of slowdown in the new residential component of our end demand.
• A favorable pricing environment for non-cable products (6.6% contribution in the quarter), resulting from a carryover effect of price increases passed in 2022 and an additional rise recorded in the beginning of 2023.
• A slightly negative copper-cable pricing contribution ((0.6)% in Q1 2023 vs 4.1% in Q1 2022) resulting from lower copper prices in Q1 23 compared to Q1 22. Assuming copper prices remain unchanged, we anticipate a more favorable copper cable contribution in H2 23.
• Further growth in digitalization in all three geographies, with digital sales now representing 27.4% of sales, up 320bps compared to Q1 2022. Trends were positive in Europe (37.3% of sales, an increase of +183bps), North America (18.8% of sales, an increase of +436bps) and Asia-Pacific (5.8% of sales, up +126bps).

Europe (51% of Group sales): +12.7% in Q1 on a constant and same-day basis

In the first quarter, sales in Europe increased by +10.6% on a reported basis, including:

• A negative currency effect of (0.8)%, or €(18.3) million, mainly due to the depreciation of the British pound and the Swedish Krona against the euro
• A negative scope effect of (2.3)%, or €(53.0) million, mainly resulting from the disposal of our activities in Russia, Spain & Portugal in 2022 and Norway in 2023On a constant and same-day basis, sales were up +12.7%, including a positive volume contribution of 4.3% and a price effect of +8.3% (including 0.3% contribution from copper-based cable prices in the quarter).

  In Europe, electrification trends continued to support our growth, with our three product families (solar, EV charging infrastructure and HVAC) growing by +57% (contributing for 770bps of same-day sales growth in Europe in Q1 23) and representing 19% of sales. Germany, Benelux and Sweden were the biggest beneficiaries of sustained electrification growth in the region.

  • Sales in France (39% of the region’s sales) were up +10.8%, outperforming the market, with positive trends in all markets except in the traditional ED business in residential. We saw positive momentum in HVAC and Solar activities.
  • Benelux (13% of the region’s sales) grew by +12.5%, with a good performance in Belux and Netherlands. More specifically, Solar, HVAC and EV infrastructure remain the key growth drivers in the Netherlands.
  • Sales in Scandinavia (11% of the region’s sales) were up +17.4% with accelerating trends in electrification, notably in Sweden (Solar).
  • Sales in Germany (11% of the region’s sales) posted strong +22.7% growth, with further market share gains, supported by the residential & commercial markets. Residential was again boosted by solar demand.
  • In the UK (9% of the region’s sales), sales increased by +2.7%, on a difficult comparable base due to the lower revenues generated in the quarter with the Department of Education (school air filtration and CO2 equipment – contribution of -270bps in Q1 23). Underlying growth was supported by favorable trends in industry.

   

   North America (42% of Group sales): +8.7% in Q1 on a constant and same-day basis

  In the first quarter, sales in North America increased by +17.4% on a reported basis, including:

  • A positive currency effect of +3.3%, or €58.0 million, due to the appreciation of the US dollar against the euro

  • Leveraging our transformation and enhanced efficiency, we target for 2023, at comparable scope of consolidation and exchange rates:

    • Same-day sales growth of between 2% and 6%
    • An adjusted EBITA1 margin of between 6.3% and 6.7%
    • Free cash flow conversion2 above 60%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/EBITDAaLNB: 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.A positive scope effect of +4.4%, or €76.9 million, from the acquisition of Horizon Solutions and Buckles-Smith in the US as well as LTL in Canada.On a constant and same-day basis, sales were up +8.7%, including +4.6% from volume growth and +4.1% from price effect (including (1.7)% contribution from copper-based cable prices in the quarter).

      In North America, electrification trends continued to support our growth, with our four product families (solar, EV charging infrastructure, HVAC and industrial automation) growing by c.+19% (contributing for 370bps of same-day sales growth in North America in Q1 23) and representing c. 22% of sales.

      • In the US (82% of the region’s sales), sales posted solid +8.6% growth on a same-day basis, driven by robust demand in our diversified Commercial and Industrial end-markets, offsetting the declining trend in residential activity and the more difficult base effect in the Southeast.
        • Rexel’s Industrial automation business grew in double digits
        • Rexel was awarded a multi-year U.S. Postal Service contract for the supply of up to 41,500 electric vehicle charging stations.
      • In Canada (18% of the region’s sales), sales grew by +9.3% on a same-day basis. The robust growth in Q1 was largely driven by diversified industrial segments such as mining, transportation, OEM, farm & food, sawmills…
      • Stable backlogs in North America at end-March 2023 compared to end-December 2022, reflecting good project execution and robust underlying order intake in the quarter.
      • Smooth integration of recently-acquired companies: Buckles-Smith and Horizon in the US as well as LTL in Canada.

       

      Asia-Pacific (7% of Group sales): +1.3% in Q1 on a constant and same-day basis

      In the first quarter, sales in Asia-Pacific were up +0.4% on a reported basis, including:

      • A negative currency effect of (2.3)%, or €(7.4) million, mainly due to the depreciation of the Chinese renminbi and the Australian dollar against the euro

      • A neutral scope effect

      On a constant and same-day basis, sales were up +1.3%, including a slight (0.5)% volume decline and +1.8% price effect (including 0.1% contribution from copper-based cable prices in the quarter).

      

       

      • In the Pacific (52% of the region’s sales), sales were up +8.0% on a constant and same-day basis. More specifically:

      ◦ In Australia (83% of Pacific’s sales), sales increased by +9.1%, with good volume growth driven by Industrial and, to a lesser extent, Commercial. Solar activity remained supportive.

      • In Asia (48% of the region’s sales), sales decreased by (5.1)% on a constant and same-day basis:

      ◦ In China (87% of Asia’s sales), sales were down (3.5)% due to increased business selectivity in a favorable business environment.

    CALENDAR

    May 9 2023 – Detachment date of the dividend

    May 11, 2023 – Dividend Payment of €1.20 per share (issue premium) 

    July 28, 2023 – First-half 2023 result

    FINANCIAL INFORMATION

    A slideshow of the first quarter 2023 sales is 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 1,900 branches in 21 countries, with more than 26,000 employees. The Group’s sales were €18.7 billion in 2022.

    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.