Scienza e Tecnologia
FOURTH QUARTER SALES & FY 2022 RESULTS
→ FY22: Record results - Delivering on our Power Up 2025 strategic journey
→ FY 22 sales of €18,701.6m, up +14.1% on a same day basis, driven by both volume and prices. Sales growth boosted by accelerating electrification trends in Europe.
→ FY adj. EBITA of €1,368.5m, up +35.7% and adjusted EBITA margin at 7.3% (up +118 bps) from robust activity coupled with our more efficient organization. Adj. EBITA margin includes 66 bps of positive one-off effects from inventory price inflation on non-cable products, net of higher performance-linked bonuses
→ Recurring net income up +58.6% in FY 2022 to €911.8m, reaching a new all-time high, leading to a record dividend of €1.20 per share.
→ Record positive Free Cash Flow before interest and tax of €873.3m in FY 2022 (€680.6m in 2021). Lowest-ever full-year indebtedness ratio at 0.96x. Rating upgraded in 2022 by both S&P and Moody's.
→ Active portfolio management with 5 acquisitions and 4 disposals, including the operations announced in January 2023, fully in line with our strategy. The combined net effect is positive on sales, profitability and ROCE
→ 2023 outlook : Same-day sales growth of between 2% and 6%, adjusted EBITA margin between 6.3% and 6.7% and conversion of free cash flow before interest and tax above 60%
→ Power up 2025 : Well on track to deliver our 2022-2025 ambitions
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 +17.8% year-on-year on a reported basis and up +12.3% on a constant and same-day basis.
In the fourth-quarter, Rexel posted sales of €4,802.3 million, up +17.8% on a reported basis, including:
In Q4 2022, sales were up +12.3% on a constant and same-day basis (or +9.3% on a constant and actual-day basis), with growth well balanced between volumes and selling price increases on non-cable products in all geographies.
In addition, we have also further implemented our digital strategy and more specifically:
In FY 2022, Rexel posted sales of €18,701.6 million, up +27.3% on a reported basis. On a constant and same-day basis, sales were up +14.1%, including positive impacts from volume of +4.3%, non-cable copper prices of +8.6% and change in copper-based cable prices (+1.2% vs. a positive impact of +5.2% in 2021).
The +27.3% increase in sales on a reported basis included:
Europe (51% of Group sales): +16.0% in Q4 and +13.9% in FY, on a constant and same-day basis
In the fourth-quarter , sales in Europe increased by +13.3% on a reported basis, including:
On a constant and same-day basis, sales were up +16.0%, including a positive volume contribution +7.2% and a price effect of +8.9%.
In Europe , electrification trends continue to support our growth, with our three product families (solar, EV charging infrastructure and HVAC) growing by more than 60% (contributing for 810bps of same-day sales growth in Europe in Q4 22) and representing more than 18% of sales.
North America (42% of Group sales): +10.2% in Q4 and +16.3% in FY on a constant and same-day basis
In the fourth-quarter , sales in North America were up +27.7% on a reported basis, including:
On a constant and same-day basis, sales were up +10.2%, including +6.4% from volume growth and +3.8% from price effect.
In North America , the four product families contributing to electrification grew c. 11% and represented c. 18% of sales (including Industrial automation for 12.6% of sales and Solar for 4.1%).
Asia-Pacific (7% of Group sales): +0.7% in Q4 and +3.9% in FY on a constant and same-day basis
In the fourth-quarter , sales in Asia-Pacific were up +0.8% on a reported basis, including:
On a constant and same-day basis, sales were up +0.7%, including (3.3)% volume growth and +4.0% price effect.
PROFITABILITY
Adjusted EBITA margin at 7.3% in FY 2022, up 118 bps compared to FY 2021
The +13.8% actual sales growth in FY 22 translated into gross margin improvement of +53 bps year-on-year, at 26.2% of sales, and an adjusted EBITA margin of 7.3%. The graph below details the +118 bps improvement in Adjusted EBITA margin:
For the graph, please open the pdf file by clicking on the link at the end of the press release.
The progression notably includes:
Restated for non-recurring items in both 2021 and 2022, adjusted EBITA margin was up circa 91 bps, supported by robust activity coupled with our more efficient organization. Those tailwinds more than offset overall opex inflation.
By geography:
As a result, adjusted EBITA stood at €1,368.5 million, up +35.7%, in FY 2022 and reported EBITA stood at €1,344.8 million (including a negative one-off copper effect of €(23.7) million), up +39.5% year-on-year.
Focusing on the bridge from EBITDA to Reported EBITA:
NET INCOME
Net income of €922.3 million in 2022
Recurring net incom e up +58.6% to €911.8 million in 2022
Operating income in the full year stood at €1,343.0 million, up from €911.8 million in 2021.
Net financial expenses in the full year amounted to €(119.4) million (vs. €(133.1) million in 2021), and can be broken down as follows:
Income tax in the full year represented a charge of €(301.2) million (vs. €(180.8) million in 2021) mainly reflecting the improvement of pre-tax income. In 2022, income tax expense benefited from the €12.8 million positive effect of the non-taxable gain on the disposal of Rexel Spain and Portugal while income tax expense in 2021 was impacted by a €26.5 million one-off gain related to the deferred tax asset recognition on tax losses carried forward, mainly in the UK and Germany.
Net income in the full year was €922.3 million (vs. €597.6 million in 2021).
Recurring net income amounted to €911.8 million in 2022, up +58.6% compared to 2021 (Appendix 3).
FINANCIAL STRUCTURE
Free cash-flow before interest and tax of €873.3 million in 2022
Indebtedness ratio of 0.96x at December 31, 2022
In the full year, free cash flow before interest and tax was an inflow of €873.3 million (vs. an inflow of €680.6 million in 2021), representing a free cash flow conversion rate (EBITDAaL into FCF before interest and taxes) of 61.4% , above guidance (> 60%).
This net inflow included:
Below FCF before interest and tax, the cash flow statement took into account:
At December 31, 2022:
Rexel will propose to shareholders a record-high dividend of €1.20 per share, to be paid fully 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 on May 11, 2023 (detachment date on May 9 ), will be subject to approval at the Annual Shareholders' Meeting to be held in Paris on April 20, 2023.
Our record 2022 results put us well on track to achieve the 2022-2025 four-year objectives presented at our Capital Markets Day in June. That includes our financial targets as well as our capital allocation and business ambitions.
In order to support our strategic roadmap, we announced today our purpose :
"Electrifying solutions that make a sustainable future possible"
Each of the words in our purpose statement resonates:
Rexel recently announced three transactions to reinforce its portfolio and its local footprint in key regions. They include :
The combined operations will contribute positively to our sales, earnings and Return On Capital Employed in year 1.
Acquisition of Buckles Smith Electric Company in the US
On January 5 , Rexel US signed and closed the acquisition of Buckles Smith Electric Company, a regional industrial automation distributor, the last independent player in the region. Based in Santa Clara, California, the company generated USD150m of sales in 2022, through 6 branches and 153 employees.
Buckles Smith is a high-quality company with higher profitability than Rexel's North American average. This acquisition is highly synergistic with our other Rockwell specialized distribution territories as well as with our Californian operations. It strengthens our position in the region and allow us to gain further market share in California, the biggest addressable market in the US (c. 13% of the total US market).
Acquisition of Lineman's Testing Laboratories in Canada
On January 17 , Rexel Canada signed and closed the acquisition of Lineman's Testing Laboratories, a leading provider of high-voltage electrical services and products to the utility and industrial markets. The company was founded in Toronto in 1958, has 63 employees and generated c. 25m of sales in 2022.
This acquisition will be a valuable complement to Rexel's portfolio, notably for the utility market.
Disposal of operations in Norway
Rexel also announces the signing of the divestment of its operations in Norway to Kesko on January 27. Rexel's activities in Norway, generating sales of approximately €250m in 2022, were less profitable than Group average and presented less strategic and value creation potential for the future. The completion of the transaction is subject to the approval of Norway's competition authority.
Since January 1, 2021, through 10 transactions, Rexel has acquired c. €1.5bn of sales and it has carried out 6 divestments representing c. €0.5bn of sales, materially enhancing the Group's growth and profitability profile and reinforcing its capabilities to address the challenges and opportunities of the energy transition and electrification trends.
Leveraging our transformation and enhanced efficiency, we target for 2023, at comparable scope of consolidation and exchange rates:
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 20, 2023 First-quarter 2023 sales
April 20, 2023 2023 Annual Shareholders' Meeting
May 9, 2023 Detachment date of the dividend
May 11, 2023 Dividend payment
July 28, 2023 Second-quarter sales and H1 2023 results
2022 consolidated financial statements are available on the Group's website (www.rexel.com).
A slideshow of the fourth-quarter sales and full-year 2022 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 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.
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 19% 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
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