Rexel successfully issued its first Schuldschein for 200 million euros

Rexel announces today the success of its first Schuldschein private placement, totaling 200 million euros, with two tranches of three and five years.

Initially planned at 100 million euros, the placement was oversubscribed by French and international investors, leading Rexel to double the amount issued.

This issuance is one of the first by a non-investment grade French issuer since late 2022 and demonstrates the quality and attractiveness of Rexel’s credit profile.

This transaction is part of the Group’s active management of its balance sheet and will allow Rexel to diversify its investor base, extend the average maturity of its debt and benefit from attractive financing conditions.

Bayerische Landesbank and Commerzbank are the arrangers of this transaction.

Laurent Delabarre, Group Chief Financial Officer of Rexel, declared: “We are very pleased with the success of this issue, which will allow us to continue to strengthen our financial structure. The positive reaction from investors demonstrates the attractiveness of Rexel’s strategy and prospects, which we recently presented at our Capital Markets Day.”            

Powering Up Rexel to the next level

Rexel is hosting today from 10.15AM CEST a Capital Markets Day in Paris to present an update on its strategic roadmap and unveil its new and upgraded medium-term financial ambitions.

Over the past few years, Rexel has built a very strong foundation based on the combination of several building blocks which together constitute a winning formula:

• Tech-driven operations, making best use of digital, AI and automation
• A wide array of value-added services that greatly expand our traditional role and address our customers’ most pressing challenges
• A consistent focus on sustainability
• Value-creating M&A
• Engaged associates with strong expertise and customer focus
• A track record of executing and delivering

Going forward, this solid foundation will allow Rexel to benefit from the secular trends shaping its end markets. In particular, the electrification of everything is opening broad areas of opportunities that can be addressed selectively, capitalizing on Rexel’s existing strengths.

Rexel is unveiling upgraded medium-term financial targets:

• Sales growth potential of between 5% and 8%, with targeted M&A representing between 2% and 3%
• Adjusted EBITA margin above 7%
• High-single digit growth in Earnings Per Share (EPS)
• An average conversion rate of 65% of EBITDAaL into Free Cash Flow before interest and tax

These will be supported by our capital allocation priorities:

• A dividend payout of at least 40%
• Share buybacks of between 50 million euros and 150 million euros per year
• A contribution of M&A to sales of between 2% and 3%
• Annual capital expenditure progressing in line or below top line growth
• A targeted net financial debt / EBITDAaL leverage ratio of around 2.0x

Rexel enters into an agreement to buy Talley

Rexel has reached an agreement to acquire Talley, a leading distributor of wireless infrastructure products and solutions in the United States, strongly reinforcing its exposure to the fast-growing data usage trends.

Talley provides network infrastructure products to mobile network operators, network installers, infrastructure operators and end-users across the US. Established in 1983 by the Talley family and headquartered in Los Angeles, Talley will generate turnover of c. $360m in 2024 and operates with the support of 11 warehouses and 300+ employees.
This acquisition complements Rexel’s $700m sales in the datacom and datacenter spaces in North America. It enhances the group’s offer with both connected and electrified solutions to further benefit from the electrification trend of wireless connectivity and digitalization. It also provides access to high-growth verticals including in-building wireless, private LTE or enterprise networks as well as ongoing network coverage densification and future upgrades.
Talley’s combination with Rexel opens multiple opportunities for further development as well as efficiency improvement, to the benefit of Talley and Rexel’s customers. The transaction is projected to be accretive to Rexel’s earnings per share in year 1, value-creating in year 2 and to represent a fully synergized multiple of ~7x EBITDA.

 “The acquisition of Talley is an important step to continue to strengthen our presence in the US. Electrical solutions and datacom solutions are increasingly interconnected, and Talley’s acquisition will represent a step change, giving us access to expertise, solutions, suppliers and customers in the datacom space. This new transaction is fully in line with our strategy of reinforcing our exposure to faster growing trends and verticals and increasing our weight in North American markets. Talley has an excellent reputation and market recognition for its value-added services, and shares Rexel’s customer-centric values. We are very excited about the opportunities created by the association of the two companies and look forward to working with Talley’s talented teams and management to continue driving profitable growth.” Guillaume Texier, CEO of Rexel

The completion of this transaction remains subject to US antitrust approval and customary closing conditions and is expected to close in June.*

First-Quarter 2024 Sales

Q1 same-day sales down (4.6)%, in line with expectations, mostly from high comparable base

Resilient core ED business; positive contribution from acquisitions

FY 24 guidance confirmed

→ Q1 24 sales stood at €4,707.4m, down (4.6)% on a same-day basis, in line with expectations, on high electrification comparable base, notably in solar activity in Europe

• Restated for electrification (22% of sales, down c.(12)%) and cable, core ED activity remained resilient, with a limited decline of (0.8)%
• Stable non-cable pricing and price increase in our core products. Restated for electrification, non-cable pricing rose by +0.7%
• Cable pricing at (1.5)% from high copper prices in Q1 23 and continued price normalization in North America beginning at end-Q2 23

→ Resilience of our non-residential market and industrial automation business, especially in North America

→ Further market share gains in our key countries (including France, Germany and Switzerland) demonstrating the solidity of our model

→ Improvement in backlogs in North America, providing visibility

→ Digital penetration rate at 31% of sales in Q1 24, up +273bps

→ Continued focus on margin resilience, leveraging the key initiatives of the Power Up 2025 plan

→ Active capital allocation in the quarter

• Solid M&A pipeline
  • End-April, Rexel reached an agreement to acquire Itesa, reinforcing its position in the security & communication business in France

• Share buyback for €23m in the quarter, or €223m on a cumulative basis since the launch of the plan

→ 2024 outlook confirmed: Stable to slightly positive same-day sales growth with high comparable base in H1 2024, adjusted EBITA margin between 6.3% and 6.6% and conversion of free cash flow before interest and tax above 60%

Press Release – Combined Shareholders’ Meeting of April 30, 2024

Rexel informs its shareholders that its Combined Shareholders’ Meeting (ordinary and extraordinary) will be held on April 30, 2024 at 10:30 a.m. at Châteauform’ City George V, 28, avenue George V, 75008 Paris.
The prior notice of meeting (“avis de réunion”) was published in the Bulletin des annonces légales obligatoires (BALO), dated Friday, March 22, 2024 (www.journal‐officiel.gouv.fr/balo), bulletin No. 36 (reference number 2400595). It contains the detailed agenda for the meeting and the draft resolutions and describes how shareholders can take part in and vote at the meeting.
The convening notice for shareholders (“avis de convocation”) will be published in the Bulletin des annonces légales obligatoires (BALO) of Friday, April 12, 2024 and in Journal Spécial des Sociétés Françaises par Actions of the same day.
The convening notice has also been sent to shareholders whose shares are held in registered form and has been made available to the accredited banks or brokers for the shareholders whose shares are held in bearer form.
In accordance with applicable laws and regulations, the information and documents relating to this meeting will be:
− made available on Rexel’s website (www.rexel.com), under the “Investors/Events/2024 Annual General Shareholders’ Meeting” section;
− made available at Rexel’s registered headquarters (13, boulevard du Fort de Vaux, 75017 Paris, France) and
− sent to shareholders by Société Générale Securities Services – Services Assemblées, CS 30812, 44308 Nantes Cedex 3, upon receipt of a request.
Further information on this shareholders’ meeting and more specifically on the shareholder voting procedures is available on the website www.rexel.com (“Participating in the Annual Shareholders’ Meeting”).

Distribution of an amount of 1.20 euros per share

The Board of Directors of Rexel has decided to submit to the Shareholders’ Meeting to be held on April 30, 2024, the payment of a dividend of 1.20 euro per share, by deduction from the results.

The right to this dividend shall be detached from the share on May 151, 2024. The dividend shall be paid on May 17th, 2024.

Board nominations to be proposed to the Shareholders’ Meeting

Board of Directors has unanimously decided on the recommendation of the Nomination, Governance and CSR Committee, to propose to the Annual General Meeting of April 30th, 2024 the appointment of Eric Labaye and Catherine Vandenborre as new independent members of the Board of Directors for a four year term, as well as the renewal of Brigitte Cantaloube’s term of office as Director.
François Henrot has also informed the Board of his resignation from his directorship following the April 30th, 2024 Annual General Meeting.

Agnès Touraine, Chairwoman of Rexel’s Board of Directors, said: “François Henrot has played a key role on Rexel’s Board of Directors, notably as Senior Independent Director. I would like to thank him warmly for his advice, his loyalty and his many contributions over the years. And I am delighted to welcome Eric Labaye and Catherine Vandenborre. The Board of Directors had recently identified complementary needs in terms of expertise, which guided our choices. Eric will bring to the Board his expertise in the fields of strategy and innovation. As for Catherine, she will provide Rexel with her knowledge of the electricity sector, as well as her expertise in finance. I wish them both much pleasure in contributing to Rexel’s development as members of our Board.”

2023 Universal Registration Document made available

2023 Universal Registration Document, including the annual financial report for the 2023 financial year, was filed on March 11, 2024 with the French Autorité des marchés financiers (AMF), under number D.24-0096.

The Universal Registration Document notably includes the following information:
– The report on corporate governance prepared by the Board of Directors (including the compensation policy for corporate officers);
– The description of the share repurchase program;
– The statement of non-financial performance; and
– The reports of statutory auditors and information regarding their fees.

The Universal Registration Document is available on Rexel’s corporate website (www.rexel.com/en) in the “Investors – Regulated Information” section and on the AMF’s website (www.amf-france.org). It is also available at no cost at Rexel’s headquarters, 13, boulevard du Fort de Vaux, 75017 Paris, France.

Fourth-Quarter Sales & Full-Year 2023 Results

Record sales, adjusted Ebita margin1 and free cash flow

Upgraded full-year guidance fully achieved, with Ebita in the upper end of the range

Strong 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

• Positive volume and price contributions: +2.0% and +2.3% respectively

• Boosted by electrification trends in Europe, mainly in H1, and commercial & industrial projects in North America

→ 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

• Highest-ever FCF before interest and tax, at close to €1bn

• FCF conversion (EBITDAaL into FCF before I&T) significantly above guidance at 73%

→ 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

• Share buyback: €134m of shares repurchased in 2023; €200m since mid-2022 launch of plan

• Acquisitions: €800m of acquired sales in 2023

→ 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.”

Change in Rexel’s financial agenda

Initially planned for February 15, 2024, the publication of Rexel’s full-year 2023 results and the conference call have been moved forward to Wednesday, February 14, 2023 after market close.

This change is due to numerous company results in the Capital Goods sector scheduled for February 15. Further information related to time and connection details will be communicated in the coming weeks.