FIRST-QUARTER 2022 SALES

FIRST-QUARTER 2022 SALES Strong start to the year with sales up +16.0%, driven by strong inflation and positive volumes Volumes continue to improve in Europe and North America despite continued product availability challenges Backlogs increasing in our main countries on sustained demand, acceleration in electrification trends and supply chain tensions

→ Sales of €4,377.4m in Q1 2022, up +16.0% on a same-day basis

• Positive trends in all geographies, confirming increasing demand for electrical products and the key role of distributors in the energy transition
• Growth supported by both volume increase (283bps contribution) and high selling prices (405bps contribution in cable and 910bps in non-cable products)
• Acceleration in North America, up +21.6%, driven by both volume recovery and further price increases
• High selling price increases in Q1 2022. Pricing contribution from carryover effect expected to ease in coming quarters on difficult base effects on both cable and non-cable products

→ Sales up +19.1% on an actual-day basis, benefiting from a favorable calendar effect (+3.1%) largely due to specific US accounting rules (reversal expected in Q4 22)

→ Continued supply chain tensions and resource scarcity, further impacted by the lockdown in China

→ Digital revenue in Q1 2022 represented 23.6% of total sales, up +177bps and 25.5% excl. Mayer, up +201bps

→ Q1 2022 also marked by the disposal of our Russian business

→ FY 2022 guidance confirmed, in a context of growing geopolitical and macroeconomic uncertainties

Key figures (€m)	Q1 2022	YoY change
Sales on a reported basis	4,377.4	+31.4%
On a constant and actual-day basis		+19.1%
On a constant and same-day basis		+16.0%
Same-day sales growth by geography
Europe	2,284.8	+13.6%
France	865.5	+10.4%
Scandinavia	278.5	+12.5%
Benelux	257.5	+16.8%
Germany	226.5	+17.0%
UK	223.4	+18.0%
North America	1,764.6	+21.6%
US	1,432.3	+23.2%
Canada	332.3	+14.9%
Asia-Pacific	328.0	+5.5%
China	145.5	+4.8%
Australia	131.3	+4.1%

Guillaume TEXIER, Chief Executive Officer, said: “Rexel’s strong start to the year demonstrates that we continue to benefit from solid underlying demand and electrification trends, which should accelerate in the current environment. It also highlights our ability to transform supply chain tensions into an opportunity to help customers navigate product shortages, while ensuring pass-through of supplier price increases. In this context, notwithstanding the current geopolitical and economic uncertainties, we are confident that we will achieve our 2022 objectives. We will present our medium-term roadmap at our Capital Markets Day on June 16.”

SALES REVIEW FOR THE PERIOD ENDED MARCH 31, 2022

• Unless otherwise stated, all comments are on a constant and adjusted basis and, for sales, at same number of working days.
  
  

SALES

In Q1, sales were up +31.4% year-on-year on a reported basis and +16.0% on a constant and same-day basis, reflecting positive momentum in all three geographies.

Key figures (€m)	Q1 2022	YoY change
Sales on a reported basis	4,377.4	+31.4%
On a constant and actual-day basis		+19.1%
On a constant and same-day basis		+16.0%

In the first quarter Rexel posted sales of €4,377.4m, up +31.4% on a reported basis, including:

• A positive currency effect of €104.3m (i.e. +3.1% of Q1 2021 sales), mainly due to the appreciation of the US & Canadian dollars against the euro
• A positive net scope effect of €240.0m (i.e. +7.2% of Q1 2021 sales) mainly due to Mayer acquisition in the US
• A positive calendar effect of +3.1%, largely resulting from specific US accounting rules.
  
  

On a constant and same-day basis, sales were up +16.0%, as a result of:

• An excellent performance in North America, with further recovery, and strong resilience in Europe on more difficult base effects, offsetting lower growth in Asia-Pacific as business recovered from the pandemic earlier than in other geographies
• Strong underlying trends from electrification and growing demand for energy efficiency solutions in a context of rising energy costs, as illustrated by growth of product categories such as PV, EV or HVAC at rates above Group average
• A favorable pricing environment for both cable (4.1% contribution in Q1 2022 vs 2.9% in Q1 2021) and non-cable (9.1% contribution in the quarter) products, resulting from a carryover effect of price increases passed in 2021 and an additional rise recorded in 2022
• Further growth in digitalization in all three geographies, with digital sales now representing 25.5% of Group sales excluding Mayer, up +201bps compared to Q1 2021, or 23.6% of sales, up +177bps including Mayer, considering its low digital penetration. Trends were positive in Europe (up to 35.0% of sales, an increase of +166bps), North America (up to 12.4% of sales, an increase of +304bps including Mayer) and Asia-Pacific (4.6% of sales, up +72bps).

In the quarter, the tensions on the supply chain remained unchanged and we don’t expect any improvement before the second part of the year, as visibility remains low (lockdown in China, Russia/Ukraine war). This “scarcity environment” continues to be an opportunity for Rexel, as we continue to help our customers deal with product shortages and labor availability to unlock productivity gains.

Europe (52% of Group sales): +13.6% in Q1 on a constant and same-day basis

In the first quarter, sales in Europe increased by +15.6% on a reported basis, including a positive currency effect of +0.6%, or €12.1m, mainly due to the appreciation of the British pound and the Swiss Franc against the euro and a negative scope effect of (0.2)%, or €(4.9)m, from the disposals of our activity in Russia in March 2022 and a small business in France in Q1 2021. On a constant and same-day basis, sales were up +13.6%.

Key figures (€m)	Q1 2022	YoY change
Europe	2,284.8	+13.6%
France	865.5	+10.4%
Scandinavia	278.5	+12.5%
Benelux	257.5	+16.8%
Germany	226.5	+17.0%
UK	223.4	+18.0%
Switzerland	145.3	+5.6%
Austria	129.3	+16.7%
Southern Europe	85.8	+21.9%

Overall in Europe, activity remained robust, still driven by proximity and renovation activities. Acceleration in volume and price increases on non-cable products drove the good performance in Q1 22, despite continuing limitations caused by supply chain tensions. More specifically, in our larger countries:

• Sales in France (38% of the region’s sales) were up +10.4%, with similar progression in all 3 end-markets. The quarter was marked by significant market outperformance and increased digital penetration (28.4% of sales, up 328bps). Service and EV activities contributed positively to the overall performance.
• Sales in Scandinavia (12% of the region’s sales) were up +12.5%, with a slow start to the year, notably in Sweden, due to the pandemic. Trends significantly accelerated in March. Q1 sales growth was largely driven by the residential & commercial markets and boosted by PV activity.
• Benelux (11% of the region’s sales) grew by +16.8%, with strong demand in the residential market in Belux, boosted by robust growth from green products, now representing 10% of sales. Growth in the Netherlands was also boosted by renewable energy products (PV/EV/HVAC up c. 40% yoy), in a context of rising energy prices.
• Sales in Germany (10% of the region’s sales) posted strong +17.0% growth, supported by residential & industrial markets. Residential was boosted by PV demand (up 190%, contributing for 550bps). Industrial demand was driven by metal, energy & water markets offsetting low demand in automotive.
• In the UK (10% of the region’s sales), sales increased by +18.0%, with a strong demand in residential and commercial markets. The pipeline is robust in all 3 markets.
  
  

Disposal of our Russian activity

With circa €10m of revenues generated in 2021, Rexel had limited exposure to Russia (below 0.1% of Group sales).

Following recent events in the region, Rexel took the decision to fully dispose this activity through a Management Buy Out (MBO) that was completed on March 23, 2022.

North America (40% of Group sales): +21.6% in Q1 on a constant and same-day basis

In the first quarter, sales in North America increased by +67.5% on a reported basis, including a positive currency effect of +7.4%, or €78.1m, due to the appreciation of the US & Canadian dollars against the euro, a positive scope effect of +23.7%, or €249.8m, from the acquisition of Mayer in the US, as well as a positive calendar effect of +6.1%. On a constant and same-day basis, sales were up +21.6%, driven by the US and Canada.

Key figures (€m)	Q1 2022	YoY change
North America	1,764.6	+21.6%
Total US	1,432.3	+23.2%
Mayer		+27.5%
US excl. Mayer		+22.1%
Gulf Central		+42.0%
Mountain Plains		+33.9%
Northwest		+24.6%
Florida		+23.0%
Southeast		+16.4%
California		+14.3%
Midwest		+12.8%
Northeast		(0.6)        %
Canada	332.3	+14.9%

In line with the Q4 21 trend, North America further recovered, benefiting from better volume and non-cable price increases. Backlogs further increased in the quarter.

• In the US (81% of the region’s sales), sales posted solid +23.2% growth on a same-day basis, with positive trends in all regions including the Northwest, despite a difficult base effect, and significant recovery in the Mountain Plains (robust demand in Las Vegas and Denver) and Gulf Central (recovery in Oil & Gas sector) regions. By market, all three end-markets grew at a similar pace with further positive development in commercial and residential and recovery from a lower base in industry. The backlog remains healthy, up +63% at end of March 2022 yoy. Mayer is progressing well, up +27.5%, and the integration process is occurring smoothly. We are on track to achieve our upgraded synergy ambitions presented in February 2022.
  
  
• In Canada (19% of the region’s sales), sales grew by +14.9% on a same-day basis, Q1 performance was driven by the industrial end-market up c. 20%, contributing for c. 900bps notably boosted by robust demand in oil & gas and mining.
  
  

Asia-Pacific (8% of Group sales): +5.5% in Q1 on a constant and same-day basis

In the first quarter, sales in Asia-Pacific were up +9.1% on a reported basis, including a positive currency effect of +4.7%, or €14.2m, mainly due to the appreciation of the Chinese renminbi against the euro and a negative scope effect of (1.7)%, or €(5.0)m, related to the disposal of Rexel Saudi Arabia in Q4 2021. On a constant and same-day basis, sales were up +5.5%.

Key figures (€m)	Q1 2022	YoY change
Asia-Pacific	328.0	+5.5%
Australia	131.3	+4.1%
China	145.5	+4.8%

• In the Pacific (49% of the region’s sales), sales were up +5.5% on a constant and same-day basis. More specifically:
  • In Australia (82% of Pacific’s sales), sales increased by +4.1%, boosted by price increases, offsetting a slow start to the year, impacted by difficult weather conditions notably in the New South Wales & Queensland regions as well as Covid-related staff shortages.

• In Asia (51% of the region’s sales), sales increased by +5.5% on a constant and same-day basis:
  • In China (86% of Asia’s sales), sales were up +4.8%. The acceleration was supported by demand from municipalities, renewables and infrastructure & transportation, offsetting the lack of demand in automotive and food & beverage as a result of chip shortages as well as the continuing pandemic situation. The quarter benefited from selling price increases. Orders are growing significantly. We anticipate the coming quarter to be impacted by the recent local lockdowns that took place in large cities.

FY 2022 OUTLOOK

We remain confident we will achieve our 2022 objectives despite geopolitical and macroeconomic uncertainties.

Leveraging our transformation and enhanced efficiency, we target for 2022, at comparable scope of consolidation and exchange rates*:

• Same-day sales growth of between 4% and 6%
• An adjusted EBITA¹ margin above 6%
• Free cash flow conversion² above 60%
  
  

* Assuming no severe deterioration of the sanitary environment

An updated strategic roadmap, will be presented at a Capital Markets Day to be held at our Group's biggest branch in Zurich on June 16, 2022.

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 2.

CALENDAR

June 3, 2022                                 Ex-dividend date
June 7, 2022 Dividend Payment of €0.75 per share (issue premium)
June 16, 2022 Capital Markets Day
July 28, 2022                                First-half 2022 results

FINANCIAL INFORMATION

A slideshow of the first quarter 2022 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 over 1,900 branches in 24 countries, with more than 26,000 employees. The Group’s sales were €14.7 billion in 2021.
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 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

Sara DU REAU	+33 6 60 31 77 72	sara.dureau@rexel.com
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 17% 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 10, 2022 under number D.22-0083.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 10, 2022 under number D.22-0083, as well as the financial statements and consolidated result and activity report for the 2021 fiscal year which may be obtained from Rexel’s website (www.rexel.com).

 

Attachment

• PR - First-quarter 2022 Sales