Rexel Sa · EURONEXT:RXL
Rexel Sa — Investor Day (December 2009)
52 slides from Rexel Sa's investor day presentation, Dec 4, 2009
Slide 1: Rexel Investor Day, Lyon - December 4, 2009
REXEL Investor Day Lyon - December 4, 2009
Slide 2: Table of contents
Table of contents 1. Consolidating our leadership in France 3 2. Rexel 2009: a resilient global leader 16 3. Our strategic roadmap for profitable growth 25
Slide 3: Consolidating our Leadership in France
3 Consolidating our Leadership in France Patrick Berard, SVP, Southern Continental Europe
Slide 4: Rexel is a key actor in the French electrical market
Rexel is a key actor in the French electrical 4 market France’s strong electrical industry has spawned powerful global leaders
Slide 5: Rexel France: a leader with a balanced profile
5 Rexel France: a leader with a balanced profile 2009 sales (e): €2.2 bn 146,600 customers ranging from €10/year 60,000 t of cables to €40m/year 12m plugs 21% counter sales 6m switches 23% telephone sales with branch pick-up 320,000 panels 48% delivered to customers 1,200 recycling bins 8% delivered
Slide 6: Rexel France: a national network close to its customers
Rexel France: a national network 6 close to its customers 60 economic clusters 10 Distribution Centers PROXIMITY 437 Rexel & Coaxel sales outlets 1 IT system 1 legal entity SIMPLICITY 1 customer = 1 account = 1 sales representative 295,000 SKUs sold and 62,000 stored 99.5% of available stored produc
Slide 7: 2009: a rigorous focus on cost adjustment and cash
7 2009: a rigorous focus on cost adjustment and cash Organic sales growth (e) ~ -10%, more resilient than the European average Branch streamlining from 456 at end 2008 to 437 at end 2009 (-4.4%) Optimization of logistics centers from 12 to 10 Headcount adjusted by 10% ´ EBITA margin will remain abov
Slide 8: 2010-2012: building a new business model
8 2010-2012: building a new business model Structural transformation of the traditional distribution model towards “multi-distribution” Commercial ambition with a significant enlargement of the number of services and clients Continuing adaptation to evolving client needs
Slide 9: 2010-2012: model evolving towards different formats by customer type
2010-2012: model evolving towards different 9 formats by customer type SUPPLIERS REXEL LOGISTIC CENTRES E-commerce Rexel clusters & Tel sales branches Rexel docking on Delivery customer site Renovation Infrastructure Industrial users Installers & Collective & Panel builders housing projects
Slide 10: 2010-2012 Growth drivers: New sources of energy
2010-2012 Growth drivers: 10 New sources of energy New energies will be partly produced on consumption site
Slide 11: 2010-2012: Growth drivers across all our end-markets
2010-2012: Growth drivers across all our end-markets 11 Energy Renewable Data Efficiency Energy Com Speed variation, drives & engines INDUSTRY Regulation & Photovoltaïc measurements « Smartgrid » Relamping Heat pumps KnX norm COMMERCIAL Detection/regulation Wind 2nd generation Dali standard Automati
Slide 12: Growth drivers: social and regulatory change - Residential
2010-2012 Growth drivers: new opportunities 12 from social and regulatory change - Residential Rexel’s opportunities Lighting 300 million light sources to be changed Unit price x 4 over the next 3 years 5 million electric meters to be changed Electric meters per year over the next 7 years New panels
Slide 13: Growth drivers: social and regulatory change - Commercial/Industrial
2010-2012 Growth drivers: new opportunities from 13 social and regulatory change – Commercial/Industrial Rexel’s opportunities HVAC - Lighting « Grenelle environnement » Presence detection PPP hospitals Hospitals & health care Retirement homes Handicap Law Public sector buildings Energy efficiency c
Slide 14: Growth drivers: Public Private Partnerships
2010-2012 Growth drivers: 14 Public Private Partnerships Targeted customer Targeted segments customer segments Rexel value Rexel proposition value to client proposition to client Hospitals, On-site outsourced electrical contracting, Prisons, Supply chain management with streamlined Educational facil
Slide 15: Conclusion
15 Conclusion Rexel France is on the move: From a conventional distribution model to a « multi-distribution » model From local coverage of our customer base to an enlarged multi-profile customer base From an electrical product provider towards a value-added solutions provider Towards a multi-special
Slide 16: Rexel 2009: a resilient global leader
16 Rexel 2009: a resilient global leader Jean-Charles Pauze, Chairman & CEO Michel Favre, Group CFO
Slide 17: Rexel operates in a €140bn well-balanced global market
Rexel operates in a €140bn1 well-balanced 17 global market North America ~ 35% Europe ~ 30% Asia-Pacific ~ 20% Latin America, Africa & Middle East ~ 15% End-user balance Geographical balance: US + Europe account for about 2/3 of the global market End-market balance: commercial, industrial and reside
Slide 18: Rexel is a worldwide leader with strong regional positions
Rexel is a worldwide leader 18 with strong regional positions North America Europe Asia-Pacific (> 30% of Group sales) (~ 60% of Group sales) (< 10% of Group sales) Rexel N°1 Rexel N°2 Rexel N°1 ~600 sales outlets ~1,300 sales outlets ~300 sales outlets N°1 in ED in the US N°1 in 12 countries (out o
Slide 19: Rexel is at the centre of the value chain
19 Rexel is at the centre of the value chain Global manufacturers Customers End-markets Products Services Residential 25% Industrial 32% 7 Product families % of 2008 sales Broad service offer Commercial 43% Installation equipment 41% Technical support Categories Small and medium Cables & conduits 26
Slide 20: Increasing value through upgraded product and service offer
Increasing value 20 through upgraded product and service offer Higher value-added offering Increased service levels to customers Installation equipment Remote controls Technical support Personalized training Cables & conduits Multimedia cables Inventory management Product availability outsourcing Li
Slide 21: Rexel: an outstanding financial track record
21 Rexel: an outstanding financial track record Revenues (€bn) Adj. EBITA1 (€bn) Reported FCF2 (€m) 699 713 789 13.7 12.9 ,4 X2 X2 2.9 X 6.8 297 274 a a a 2004 2008 2008PF 2004 2008 2008PF 2004 2008 2004-2008 revenues 2004-2008 EBITA Adj. 2004-2008 FCF CAGR: + 19% CAGR: + 24.5% CAGR: +30% Note: 2008
Slide 22: 9-month 2009 highlights and achievements (1/2)
22 9-month 2009 highlights and achievements (1/2) Sales impacted by tough economic environment Sequential improvement of Adj. EBITA1 margin €307m 2009 Q1 Q2 Q3 9m €bn 2.8 2.8 2.8 8.4 €122m 3.6% YoY change €85m €100m organic same day -15.4% -20.2% -19.4% -18.4% 4.4% 3.6% 3.0% YoY change at constant c
Slide 23: 9-month 2009 highlights and achievements (2/2)
23 9-month 2009 highlights and achievements (2/2) Strong cash flow generation Reduce debt and strengthened financial structure FCF before interest and tax up 24% in the 9 months Net debt reduced by €348m Increased flexibility through over the first 9 months covenant renegotiation €2,932m Commitments
Slide 24: 2009 Outlook
24 2009 Outlook Sales in October and November: Full-year sales should be sequential improvement in organic growth in the range of €11.2bn to €11.3bn We confirm that Q4 will show Full-year Adj. EBITA1 margin a further sequential improvement in EBITA1 margin should be close to 4.0% Thanks to tight con
Slide 25: Our medium-term strategic roadmap for profitable growth
25 Our medium-term strategic roadmap for profitable growth Jean-Charles Pauze, Chairman & CEO Michel Favre, Group CFO Pascal Martin, Group SVP, Business Development & Operations
Slide 26: Next step in Rexel's strategy: a roadmap to consolidate our leadership
Next step in Rexel’s strategy: 26 a roadmap to consolidate our leadership "Enrich model to "Get scale" “Improve resilience “Strengthen create leadership more to cycles” as market recovers" value" 2004 2008 2009 / 2010 Sales Commercial Capture new market opportunities development initiatives to • Str
Slide 27: Global market trends provide Rexel with long-term growth opportunities
Global market trends provide Rexel 27 with long-term growth opportunities Continuous growth in mature markets Strong upside in emerging markets Electricity consumption People with access to electricity ('000 kWh/head OECD countries per annum) (Population in bn) 10 €43tr 5 4,0 9 3,6 €32tr 4 2,9 3,2 8
Slide 28: Capturing market opportunities through Structural Organic Growth drivers
Capturing market opportunities 28 through Structural Organic Growth drivers Market Segments Opportunities mega-trends Globalization Energy efficiency Lighting Retrofit, Increased Variable speed outsourcing motor regulators,… Clean energy sources Renewable energy Wind, Photovoltaic Energy savings Mas
Slide 29: Capturing Structural Organic Growth opportunities
29 Capturing Structural Organic Growth opportunities
Slide 30: Energy efficiency: Lighting retrofit
30 Energy efficiency: Lighting retrofit Targeted customer segments Rexel value proposition to client Medium size tertiary / commercial end users Full service assistance to switch to energy efficient lighting, including: z Schools / university campuses, z Audit z Hospitals, z Pool of qualified instal
Slide 31: Renewable energy: Wind
31 Renewable energy: Wind Targeted customer segments Rexel value proposition to client Wind turbine manufacturers Supply of customized components (electrical, hardware and small manufactured parts ) z Vestas, GE Wind, Gamesa, Enercon, Suzlon, Siemens z Global presence and sourcing mainly from China
Slide 32: Renewable energy: Photovoltaic
32 Renewable energy: Photovoltaic Targeted customer segments Rexel value proposition to client Three customer segments End-user relationship z Individuals Packaged products + services z Photovoltaic (PV) installers (financing, insurance, audit, installers’ coordination, …) z Projects ROI calculation
Slide 33: EPCs: International Projects Group (IPG)
33 EPCs: International Projects Group (IPG) Targeted customer segments Rexel value proposition to client Global Engineering, Procurement Standardized & coordinated approach and Construction companies (EPCs) for all projects z Sector focus on Oil & Gas, Industrial processes, z Dedicated central comme
Slide 34: Structural growth drivers should generate additional sales of around €400m by 2012
Structural growth drivers should generate 34 additional sales of around €400m by 2012 Total 2009-2012 Incremental addressable growth sales 2012 market Energy Efficiency Lighting Retrofit €1.3bn 8% ~ €100m Renewable Energy Wind €1.3bn 8% ~ €100m Photovoltaic €2.8bn 25-35% ~ €100m EPCs International P
Slide 35: Pursuing a selective acquisitions strategy
35 Pursuing a selective acquisitions strategy
Slide 36: 2005-2008: A successful track-record of integrating acquisitions
2005-2008: A successful track-record 36 of integrating acquisitions Rexel consolidated the electrical distribution market 29 bolt-on and mid-sized acquisitions 2 transforming acquisitions 2005 2006 Gexpro in the US (ex-GE Supply) 24 bolt-on acquisitions (<€50m z Sales of €1.8bn of sales) → €250m add
Slide 37: 3 main priorities for acquisitions
37 3 main priorities for acquisitions Strengthen regional market share in mature markets z North America z Key European markets Expand presence in emerging markets z Asia: China, South-East Asia, India z Latin America: Mexico, Brazil Broaden the offer of value-added services z Purchase competencies
Slide 38: Strengthen market shares in mature economies
38 Strengthen market shares in mature economies # # # # # S # # S # # S # S # # Market share > 10% 5% ≤ Market share < 10% Market share < 5% Market share ≥ 20% 10% ≤ Market share < 20% Market share < 10% Strengthen existing regional market Consolidate market share in existing share countries Develop
Slide 39: Expand presence in emerging markets
39 Expand presence in emerging markets 2008 Market size Expected timing China €8 bn Short-term South-East Asia €5 bn Short to Mid-term India €4 bn Short to Mid-term Key priorities: Middle East €4 bn Short to Mid-term China, South-East Asia & India Brazil €3 bn Mid-term Mexico €2 bn Mid-term Sales in
Slide 40: Acquisition criteria
40 Acquisition criteria Quantitative criteria z Payback ≤ 7 years z Synergies ≥ 1.5% of acquired sales z EPS accretion within 24 months Qualitative criteria z Fit of target with Rexel’s portfolio and strategy z Strengthen core business z Develop higher value-added services
Slide 41: Upgrading the business model
41 Upgrading the business model
Slide 42: Rexel's evolving business model: towards higher value-added services
Rexel’s evolving business model: 42 towards higher value-added services TODAY TOMORROW « Products x Branch » model « Products & Services x Segment » model End-markets Customers by vertical segments Branch Residential Branch Counter Counter Industry Sales Hospitals INSTALLERS INSTALLERS representativ
Slide 43: Focus on e-commerce growth
43 Focus on e-commerce1 growth Support sales development and front-office e-commerce penetration (% of sales) Increased sales, Cross-selling >30% 10-30% <10% and up-selling Increased gross margin Switzerland Belgium France Norway USA UK Reduction in number of branches Netherlands Sweden Germany 12%
Slide 44: IT platforms as a key enabler of upgraded model
IT platforms as a key enabler 44 of upgraded model Country IT rationalization IT Opex & Capex evolution ERP consolidation effort on-going IT Opex stable (% of sales) thanks to on-going efforts to adjust to environment 80 71 70 60 IT Capex contained below €30m in 2009 +17/-5 47 45 50 40 35 30 30 20 1
Slide 45: Increase customer proximity and build up efficient logistic solutions
Increase customer proximity 45 and build up efficient logistic solutions Customer service level is good Steady inventory reduction 100% Line fill NL Rex. Inventory 12% 11.1% 11.3% rate (%) 90% (% of sales 10.4% 9.6% 9.9% Rexel Inc 10% excl. ACE) Switz. 8% 80% 6% Finland 70% 4% NL Hag. 2% 60% Canada
Slide 46: Enhancing profitability in selected markets
46 Enhancing profitability in selected markets UK USA Spain
Slide 47: UK: Leverage market leadership to raise profitability
UK: Leverage market leadership 47 to raise profitability Current status Historical development Market Rexel: #4 before Hagemeyer → #1 after Hagemeyer Market size: €3.1bn Develop segment differentiation through banner positioning First five player’s (incl. Rexel) Successful integration of Hagemey
Slide 48: USA: Dual strategy for Rexel Inc. & Gexpro
USA: Dual strategy for Rexel Inc. & Gexpro 48 to fully capitalize on market recovery Current status Historical development Rexel Inc. Market z Local and regional customers z Redeploy network in attractive regions and unify corporate back-end support Market size: USD55bn z Promote nationally coordi
Slide 49: Spain: Rightsizing to restore profitability in a smaller market
Spain: Rightsizing to restore profitability 49 in a smaller market Current status Historical development Rexel: small player before Hagemeyer → #1 after Hagemeyer Market Hagemeyer integration completed Market size: €1.7bn Successful resizing of organization to adapt to market collapse First five
Slide 50: Delivering medium-term profitable growth
50 Delivering medium-term profitable growth
Slide 51: Rexel's medium-term ambitions
51 Rexel’s medium-term ambitions Market opportunities Structural Organic Growth drivers Acquisitions Annual organic growth of at least 1 point above GDP of Rexel’s regions, in a stabilized environment Upgraded business model Service provider e-commerce + Cost discipline Supply chain & IT enhancement
Slide 52: Rexel on the move to strengthen its leadership
52 Rexel on the move to strengthen its leadership Rexel has demonstrated the resilience of its business model Rexel is well positioned to seize growth opportunities and reinforce its leadership Rexel is upgrading its model to complete its evolution from a product provider to a value-added services p