Scienza e Tecnologia
FOURTH QUARTER SALES & FY 2021 RESULTS: RECORD PERFORMANCE
→ Sales of €4,077.3m in Q4 2021, up +12.2% on a constant and same day basis vs Q4 2020 ; sequential acceleration vs Q3 2021, both in price and volume. Agility to serve strong demand in an environment still marked by labor and supply chain tensions
→ Record sales and growth rate in 2021 : €14.7bn, up +15.6% on a constant and same-day basis
→ FY 21 adj. EBITA margin up +196 bps at 6.2% vs 2020 (also above FY 19 margin of 5.0%) from FY 21 same-day sales growth of +15.6% as well as further deployment of our digital initiatives, strong focus on price increase and operational excellence. Adj. EBITA includes 40 bps of positive one-off effects from non-cable products inventory price inflation, net of higher performance-linked bonuses
→ Recurrin g net income of €575.0m, up +107.0% in FY 2021 , from all-time high performance
→ Positive Free Cash Flow before interest and tax of €680.6m in FY 2021 (€461.6m in FY 2019), with FCF conversion of 65.7%, significantly above guidance. Lowest-ever indebtedness ratio at 1.37x
→ Proposal to distribute a record dividend of €0.75 per share, payable in cash
→ Mayer acquisition : A faster-than-expected integration process should translate into higher synergies, now expected at 1.5% of sales in year 1 and above 2.5% in year 3.
→ 2022 outlook : Same-day sales growth of between 4% and 6%, adjusted EBITA margin above 6% and free cash flow conversion above 60%
→ An updated strategic roadmap will be presented at a Capital Market Day in Zurich on June 16, 2022
See definition in the Glossary section of this document Change at comparable scope of consolidation Adjusted for non-recurring copper effect
SALES
In Q4, sales were up +20.3% year-on-year on a reported basis and up +12.2% on a constant and same-day basis, despite a challenging base effect, reflecting our robust underlying activity.
In the fourth quarter, Rexel posted sales of €4,077.3 million, up +20.3% on a reported basis, including:
Sales were up +11.8% on a constant and actual-day basis (or up +12.2% a constant and same-day basis), notably driven by North America and Europe, despite a more difficult base effect as the business environment started to recover in Q4 2020 from the Covid-19 outbreak.
In addition, the quarter benefited from further growth in digitalization in all geographies, with digital sales now representing 23.7% of Group sales, up +262 bps compared to Q4 2020. Trends were positive in North America (up to 12.2% of sales including Mayer, up +267 bps), Europe (up to 34.8% of sales, an increase of +97 bps) and in Asia-Pacific (5.3% of sales, up +147 bps).
In FY 2021, Rexel posted sales of €14,690.2 million, up +16.7% on a reported basis. On a constant and same-day basis, sales were up +15.6%, including a positive impact of +5.2% from the change in copper-based cable prices (vs. a positive impact of +0.2% in FY 2020) and a positive impact from non-cable copper price of 4.5%.
The +16.7% increase in sales on a reported basis included:
Europe (53% of Group sales): +10.0% in Q4 and +16.4% in FY on a constant and same-day basis
In the fourth quarter , sales in Europe increased by +11.0% on a reported basis, including a positive currency effect of +1.0%, or €20.2 million, mainly due to the appreciation of Norwegian Krone and the British pound against the euro and a negative scope effect of (0.4)%, or €(7.7) million. On a constant and same-day basis, sales were up +10.0%, positioning Rexel above the pre-crisis level in both volume and price.
North America (39% of Group sales): +18.5% in Q4 and +16.6% in FY on a constant and same-day basis
In the fourth quarter , sales in North America were up +41.7% on a reported basis, including a positive currency effect of +4.8%, or €52.8 million, due to the appreciation of the US and Canadian dollars against the euro and a positive scope effect of €181.8 million, or +16.4%, from the acquisition of Mayer in the US and a utility distribution business in Canada. On a constant and same-day basis, sales were up +18.5%, and are now significantly above their pre-crisis level (Q4 21 up +9.7% vs Q4 2019).
* Mayer consolidated as of November 8, 2021
Asia-Pacific (8% of Group sales): ( 0.1)% in Q4 and +7.5% in FY on a constant and same-day basis
In the fourth quarter , sales in Asia-Pacific were up +4.0% on a reported basis, including a positive currency effect of +5.3%, or €17.2 million, due to the appreciation of all currencies against the euro and more specifically the Australian dollar and the Chinese renminbi. On a constant and same-day basis, sales were down (0.1)%.
PROFITABILITY
Adjusted EBITA margin at 6.2% in FY 2021, up +196 bps compared to FY 2020
The +15.2% actual sales growth in FY 21 translated into a gross margin improvement of +146 bps year-on-year, at 26.0% of sales and an adjusted EBITA margin up +196 bps year-on-year at 6.2%, including a non-recurring impact of 40 bps that benefited 2021 (80 bps of positive one-off from non-cable products inventory price inflation net of a negative 40bps impact from the higher performance-linked bonuses). It demonstrates the result of our profound transformation over the last 5 years and notably the digital transformation that translates into above-market sales growth, improved customer service and higher productivity.
The graph below details the +196 bps improvement in Adjusted EBITA margin:
* including 60bps of government subsidies net of 45bps of lower volume related rebates in 2020
Assuming a return to a normalized price increase environment, the 40bps non-recurring impact that benefited 2021 will not repeat in 2022.
By geography:
As a result, adjusted EBITA stood at €906.0 million, up +69.0%, in the year 2021 and reported EBITA stood at €963.7 million (including a positive one-off copper effect of €57.8 million), up +79.5% year-on-year.
NET INCOME
Net income of €597.6 million in FY 2021
Recurring net incom e up +107.0% to €575.0 million in FY 2021
Operating income in the year stood at €911.8 million, reversing a loss of €(3.4) million in FY 2020.
Net financial expenses in the year amounted to €(133.1) million (vs. €(117.2) million in FY 2020) split as follows:
Income tax in the year represented a charge of €(180.8) million in 2021 (vs. €(140.7) million in FY 2020):
Net income in the year was €597.6 million (vs. a negative €(261.3) million in FY 2020).
Recurring net income amounted to €575.0 million in 2021, up +107.0% compared to FY 2020 (see appendix 3), corresponding to an all-time high Earnings Per Share of €1.89.
FINANCIAL STRUCTURE
Free cash-flow before interest and tax of €680.6 million in full-year 2021
Indebtedness ratio of 1.37x a t December 31, 2021
In the full year, free cash flow before interest and tax was an inflow of €680.6 million (vs. an inflow of €613.0 million in FY 2020), representing a free cash flow conversion rate ( EBITDAaL into FCF before interest and taxes) of 65.7%, above guidance (> 60%) . This net inflow included:
At December 31, 2021, net financial debt increased by €216.3 million year-on-year at €1,551.2 million (vs €1,334.9 million at December 31, 2020). It took into account:
At December 31, 2021, the indebtedness ratio (Net financial debt/ EBITDAaL ) , as calculated under the Senior Credit Agreement terms, stood at 1.37x significantly lower than the 2.14x posted at December 31, 2020.
Rexel will propose to shareholders a dividend of €0.75 per share, the highest-ever amount fully paid in cash. This represents a payout of 40% 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 in early June 2022, will be subject to approval at the Annual Shareholders' Meeting to be held in Paris on April 21, 2022.
In 2022, Rexel will continue to operate in favorable market conditions:
Labor and product availability will remain a factor at least in the first part of the year.
Leveraging our transformation and enhanced efficiency, we target for 2022, at comparable scope of consolidation and exchange rates*:
* Assuming no severe deterioration of the sanitary environment
An updated strategic roadmap, will be presented at a Capital Market Day to be held at our Group's biggest branch in Zurich on June 16, 2022.
Excluding ( i ) amortization of PPA and (ii) the non-recurring effect related to changes in copper-based cable prices.
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
April 21, 2022 First-quarter 2022 sales
April 21, 2022 Annual Shareholders' Meeting
June 16, 2022 Capital Market Day in Zurich
2021 financial statements and consolidated result is available on the Group's website (www.rexel.com).
A slideshow of the fourth-quarter sales and full-year 2021 results publication is also available on the Group's website.
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 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: SBF 120, CAC Mid 100, 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.
FINANCIAL ANALYSTS / INVESTORS
PRESS
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.
For appendix, please open the pdf file by clicking on the link at the end of the press release.
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 11, 2021 under number D.21-0111, and its amendment filed with the AMF, on March 29, 2021 under number D.21-0111-A01. 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 11, 2021 under number D.21-0111, its amendment filed with the AMF, on March 29, 2021 under number D.21-0111-A01, 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
2321 Rosecrans Avenue. Suite 2200
90245 El Segundo Stati Uniti