Rexel Sa · EURONEXT:RXL
Rexel Sa — Q1 2014 Earnings Presentation
40 slides from Rexel Sa's earnings presentation, Apr 30, 2014
Slide 1: Q1 2014 Results (Unaudited)
Q1 2014 RESULTS (UNAUDITED) April 30, 2014 Consolidated financial statements as of March 31, 2014 were authorized for issue by the Management Board on April 23, 2014 and reviewed by the Supervisory Board meeting held on April 29, 2014.
Slide 2: Results at a Glance
RESULTS AT A GLANCE RexeL as a world of energy
Slide 3: Q1 2014 highlights: Return to organic sales growth
Q1 2014 highlights: Return to organic sales growth Continued sequential improvement Sales up 0.4% on a constant and in constant and same-day sales evolution same-day basis +0.4% Despite a negative impact of copper Q1 13 Q2 13 Q3 13 Q4 13 of 1.0 percentage point at Group level Q1 14 -0.9% Despite a n
Slide 4: Q1 2014 highlights: Resilient profitability and FY 2014 targets confirmed
Q1 2014 highlights: Resilient profitability and FY 2014 targets confirmed Resilient adjusted EBITA margin of 4.5% Down 10bps year-on-year, mainly impacted by weather conditions in North America Ongoing cost control: distribution and administrative expenses (including depreciation) increased by only
Slide 5: Europe (57% of sales): Return to growth driven by Northern and Central Europe
Europe (57% of sales): Return to growth driven by Northern and Central European countries and solid profitability Rexel’s presence At comparable scope and exchange rates Europe Q1 2013 Q1 2014 Change (€m) Sales 1,724.6 1,759.4 +2.0% same-day +1.6% Gross margin 479.1 483.6 +0.9% as % of sales 27.8% 2
Slide 6: Europe: Q1 2014 business highlights
Europe (57% of sales): Return to growth driven by Northern and Central European countries and solid profitability Q1 2014 business highlights Constant and same-day sales up 1.6% (after -1.4% in Q4 2013) France (35% of the region’s sales) remained very resilient (-0.4%) in a challenging environment a
Slide 7: North America (32% of sales): Significant negative impact from weather
North America (32% of sales): Significant negative impact from weather conditions Rexel’s presence At comparable scope and exchange rates North America (€m) Q1 2013 Q1 2014 Change Sales 1,006.9 972.0 -3.5% same-day -2.7% Gross margin 221.9 215.4 -2.9% as % of sales 22.0% 22.2% +20bps Adj. EBITA1 44.
Slide 8: North America: Q1 2014 business highlights
North America (32% of sales): Significant negative impact from weather conditions Q1 2014 business highlights Reported sales down 9.1%, including a negative currency effect of €62.7m Constant and same-day sales were down 2.7% and up 1.1% excluding the negative impact of weather conditions USA (c. 75
Slide 9: Asia-Pacific (9% of sales): Strong performance in China
Asia-Pacific (9% of sales): Strong performance in China Rexel’s presence At comparable scope and exchange rates Asia-Pacific (€m) Q1 2013 Q1 2014 Change Sales 261.5 272.9 +4.4% same-day +3.8% Gross margin 53.0 53.9 +1.7% as % of sales 20.3% 19.7% -60bps Adj. EBITA1 7.2 7.0 -2.3% as % of sales 2.8% 2
Slide 10: Asia-Pacific: Q1 2014 business highlights
Asia-Pacific (9% of sales): Strong performance in China Q1 2014 business highlights Reported sales down 2.1%, including a negative currency effect of €30.0m and a positive scope effect of €12.6m Constant and same-day sales up 3.8% China (c. 30% of the region’s sales) +25.9%, driven by strong activit
Slide 11: Latin America (2% of sales): Slowdown in Brazil and sales growth in Chile
Latin America (2% of sales): Slowdown in Brazil and sales growth in Chile Rexel’s presence At comparable scope and exchange rate Latin America (€m) Q1 2013 Q1 2014 Change Sales 60.6 62.9 +3.8% same-day +3.0% Gross margin 15.0 13.9 -6.9% as % of sales 24.7% 22.1% -260bps Adj. EBITA1 0.2 (0.4) n/m as
Slide 12: Latin America: Q1 2014 business highlights
Latin America (2% of sales): Slowdown in Brazil and sales growth in Chile Q1 2014 business highlights Reported sales down 14.6%, including a negative currency effect of €13.1m Constant and same-day sales up 3.0% Brazil (c. 60% of the region’s sales) -2.7%, confirming the slowdown in the market, but
Slide 13: Financial Review
FINANCIAL REVIEW RexeL as a world of energy
Slide 14: Continued sequential improvement in sales with return to organic growth
Continued sequential improvement in sales with return to organic growth €m Reported sales Q1 2013 3,153.9 Q4 2013 Q1 2014 Net currency effect -3.6% Same-day excl. copper -0.1% +1.4% +150 bps Net scope effect1 +0.4% Copper effect -0.8% -1.0% Comparable sales Q1 2013 3,053.6 Same-day incl. copper -0.9
Slide 15: Resilient profitability thanks to ongoing cost control
Resilient profitability thanks to ongoing cost control Q1 Q1 Constant and adjusted basis (€m) Change 2013 2014 Sales 3,053.6 3,067.3 +0.4% Gross margin 768.9 766.8 -0.3% as a % of sales 25.2% 25.0% -20bps Distr. and adm. exp. (incl. depr.) (628.7) (630.0) +0.2% as a % of sales (20.6%) (20.5%) +10bps
Slide 16: Reported net income up 9.3%
Reported net income up 9.3% (€m) Q1 2013 Q1 2014 Change Adjusted EBITA1 140.2 136.9 -2.4% Non-rec. copper & other effects 2.9 (2.7) Reported EBITA 143.1 134.2 -6.2% Amortization resulting from PPA (4.7) (4.1) o/w restructuring costs: €(9.4)m in Other income & exp. (10.2) (18.7) Q1 2013 and €(13.7)m
Slide 17: FCF before interest and tax impacted by change in WCR
FCF before interest and tax impacted by change in WCR €m Q1 2013 Q1 2014 EBITDA 162.6 154.0 Other operating revenues & costs (17.1) (20.1) Restructuring outflow (10.5) (12.1) Change in working capital* (144.5) (192.6) Net capital expenditure, o/w: (5.2) (24.1) Gross capital expenditure (20.0) (18.2)
Slide 18: Net debt reduced by 12% year-on-year
Net debt reduced by 12% year-on-year At March 31, 2014 (€m) Last 12m Last 3m Last 3m at 03/31/13 Free cash flow before interest & tax 522.1 (82.7) (4.2) Net interest paid (164.5) (38.0) (42.8) Income tax paid (99.7) (27.6) (22.1) Net financial investment (7.5) (6.8) (4.7) Dividend paid (53.1) (0.0)
Slide 19: Sound financial structure
Sound financial structure Breakdown of net debt at March 31, 2014: €2,405.3m Senior unsecured notes €1,857.0m EUR Bond issued May 2011 (maturity: Dec. 2018) @ 7.000% €493.3m USD Bond issued March 2012 (maturity: Dec. 2019) @ 6.125% €353.4m USD Bond issued April 2013 (maturity: Jun. 2020) @ 5.250% €3
Slide 20: Outlook
OUTLOOK RexeL as a world of energy ENERGY IN MOTION
Slide 21: 2014 full-year targets confirmed
2014 full-year targets confirmed Sales in a range of around 1% below to around 2% above 2013 sales, on a constant and same-day basis Adjusted EBITA margin in a range of around 10bps below to around 20bps above the 2013 margin, consistent with targeted annual operating efficiency ratio of a change of
Slide 22: Appendices
APPENDICES RexeL as a world of energy
Slide 23: Appendix 1: Segment reporting - Group
Appendix 1: Segment reporting - Constant and adjusted basis Group Constant and adjusted basis (€m) Q1 2013 Q1 2014 Change Sales 3,053.6 3,067.3 +0.4% on a constant basis and same days +0.4% Gross profit 768.9 766.8 -0.3% as a % of sales 25.2% 25.0% -20bps Distribution & adm. expenses (incl. deprecia
Slide 24: Appendix 1: Segment reporting - Europe
Appendix 1: Segment reporting - Constant and adjusted basis Europe Constant and adjusted basis (€m) Q1 2013 Q1 2014 Change Sales 1,724.6 1,759.4 +2.0% on a constant basis and same days +1.6% o/w France 613.5 611.3 -0.4% on a constant basis and same days -0.4% United Kingdom 245.3 251.2 +2.4% on a co
Slide 25: Appendix 1: Segment reporting - North America
Appendix 1: Segment reporting - Constant and adjusted basis North America Constant and adjusted basis (€m) Q1 2013 Q1 2014 Change Sales 1,006.9 972.0 -3.5% on a constant basis and same days -2.7% o/w United States 745.9 720.4 -3.4% on a constant basis and same days -1.9% Canada 261.0 251.6 -3.6% on
Slide 26: Appendix 1: Segment reporting - Asia-Pacific
Appendix 1: Segment reporting - Constant and adjusted basis Asia-Pacific Constant and adjusted basis (€m) Q1 2013 Q1 2014 Change Sales 261.5 272.9 +4.4% on a constant basis and same days +3.8% o/w China 69.1 85.6 +23.9% on a constant basis and same days +25.9% Australia 130.9 123.4 -5.7% on a consta
Slide 27: Appendix 1: Segment reporting - Latin America
Appendix 1: Segment reporting - Constant and adjusted basis Latin America Constant and adjusted basis (€m) Q1 2013 Q1 2014 Change Sales 60.6 62.9 +3.8% on a constant basis and same days +3.0% o/w Brazil 37.3 36.3 -2.7% on a constant basis and same days -2.7% Chile 18.0 21.0 +16.6% on a constant basi
Slide 28: Appendix 2: Consolidated Income Statement
Appendix 2: Consolidated Income Statement Reported basis (€m) Q1 2013 Q1 2014 Change Sales 3,153.9 3,067.3 -2.7% Gross profit 787.1 764.1 -2.9% as a % of sales 25.0% 24.9% Distribution & adm. expenses (excl. depreciation) (624.4) (610.1) -2.3% EBITDA 162.6 154.0 -5.3% as a % of sales 5.2% 5.0% Depre
Slide 29: Appendix 2: Bridge between Operating income and Adjusted EBITA
Appendix 2: Bridge between Operating income before other income and expenses and Adjusted EBITA in €m Q1 2013 Q1 2014 Operating income before other income and other expenses 144.1 130.1 Adoption of IFRIC 21 -5.7 Change in scope effects 0.4 Foreign exchange effects -4.4 Non-recurring effect related t
Slide 30: Appendix 2: Recurring net income
Appendix 2: Recurring net income In millions of euros Q1 2013 Q1 2014 Change Reported net income 39.5 43.2 +9.3% Non-recurring copper effect 1.2 2.7 Other expense & income 10.2 18.7 Financial expense 21.3 0.0 Tax expense -9.2 -5.9 Recurring net income 63.0 58.6 -7.0% 30
Slide 31: Appendix 2: Sales and profitability by segment - Reported basis
Appendix 2: Sales and profitability by segment - Reported basis Reported basis (€m) Q1 2013 Q1 2014 Change Sales 3,153.9 3,067.3 -2.7% Europe 1,731.8 1,759.4 +1.6% North America 1,069.6 972.0 -9.1% Asia-Pacific 278.8 272.9 -2.1% Latin America 73.7 62.9 -14.6% Gross profit 787.1 764.1 -2.9% Europe 47
Slide 32: Appendix 2: Consolidated Balance Sheet
Appendix 2: Consolidated Balance Sheet December 31, Assets (€m) 2013 March 31, 2014 Goodwill 4,111.2 4,123.3 Intangible assets 1,038.3 1,037.6 Property, plant & equipment 278.1 277.9 Long-term investments(1) 51.7 37.6 Deferred tax assets 161.6 153.8 Total non-current assets 5,640.9 5,630.2 Inventori
Slide 33: Appendix 2: Change in Net Debt
Appendix 2: Change in Net Debt €m Q1 2013 Q1 2014 EBITDA 162.6 154.0 Other operating revenues & costs(1) (17.1) (20.1) Operating cash flow 145.5 133.9 Change in working capital (144.5) (192.6) Net capital expenditure, of which: (5.2) (24.1) Gross capital expenditure (20.0) (18.2) Disposal of fixed a
Slide 34: Appendix 3: Working Capital
Appendix 3: Working Capital Constant basis March 31, 2013 March 31, 2014 Net inventories as a % of sales 12 rolling months 10.8% 11.1% as a number of days 53.3 53.7 Net trade receivables as a % of sales 12 rolling months 16.6% 17.4% as a number of days 56.0 56.4 Net trade payables as a % of sales 12
Slide 35: Appendix 4: Headcount & Branch Evolution
Appendix 4: Headcount & Branch Evolution FTEs at end of period Year-on-Year 31/03/2013 31/12/2013 31/03/2014 comparable Change Europe 17,054 16,750 16,694 -2.1% USA 6,190 6,234 6,165 -0.4% Canada 2,394 2,379 2,362 -1.3% North America 8,584 8,613 8,527 -0.7% Asia-Pacific 2,931 2,883 2,864 -2.3% Latin
Slide 36: Appendix 5: Calendar, scope and change effects on sales
Appendix 5: Calendar, scope and change effects on sales 2013 proforma sales will take into account the following estimated effects: Q1 Q2 Q3 Q4 FY Calendar effect 0.0% -0.6% -0.3% +1.1% 0.0% Scope effect1 €12.6m c. €10m c. €10m c. €10m c. 43m Change effect2 -3.6% -3.8% -2.2% -0.9% -2.6% (1) Based on
Slide 37: Appendix 6: Changes due to the enforcement of IFRIC 21
Appendix 6: Changes due to the enforcement of IFRIC 21 as from January 1, 2014 IFRIC Interpretation 21 “Levies” clarifies that the obligating event that gives rise to a liability to pay a levy is the activity described in the relevant legislation that triggers the payment of the levy. IFRIC Interpre
Slide 38: Appendix 7: Three-month Copper Price Evolution
Appendix 7: Three-month Copper Price Evolution USD/t Q1 Q2 Q3 Q4 FY €/t Q1 Q2 Q3 Q4 FY 2012 8,327 7,829 7,732 7,925 7,953 2012 6,351 6,098 6,178 6,108 6,184 2013 7,954 7,187 7,104 7,168 7,353 2013 6,024 5,502 5,363 5,267 5,539 2014 6,999 2014 5,111 2013 vs. 2012 -4% -8% -8% -10% -8% 2013 vs. 2012 -5
Slide 39: Financial Calendar and contacts
Financial Calendar and contacts Financial Calendar Contacts • May 22, 2014 • Investors & Analysts AGM Marc MAILLET Tel: +33 1 42 85 76 12 • July 30, 2014 Email: [email protected] Q2 and H1 results Florence MEILHAC • October 29, 2014 Tel: +33 1 42 85 57 61 Q3 and 9m results Email: florence.meilh
Slide 40: Disclaimer
Disclaimer The Group is exposed to fluctuations in copper prices in connection with its distribution of cable products. Cables accounted for approximately 15% of the Group's sales, and copper accounts for approximately 60% of the composition of cables. This exposure is indirect since cable prices al