Rexel Sa · EURONEXT:RXL
Rexel Sa — H1 2007 Earnings Presentation
32 slides from Rexel Sa's earnings presentation, Aug 2, 2007
Slide 1: Strong H1 2007 Operating Performance
REXEL STRONG H1 2007 OPERATING PERFORMANCE August 2, 2007
Slide 2: Disclaimer
Disclaimer This document has been prepared by Rexel S.A. (“Rexel”) solely for the use at the results presentation held on August 2, 2007 and must be treated confidentially by attendees at such presentation. The information contained in this document has not been independently verified and no represe
Slide 3: Agenda H1 07 Results
AGENDA H1 07 RESULTS Highlights Operating Levers Financial Review Outlook Q&A 3
Slide 4: H1 Highlights
H1 07 Highlights Jean-Charles PAUZE, CEO 4
Slide 5: Key H1 figures
Key H1 07 figures Sales: +30.3% reported basis +4.5% constant basis & same days EBITA Adjusted: 326 M€ +29% As a % of sales 6.1% +110 bps Free Cash Flow before interest & tax: 364 M€ +140% Net Debt: 1,740 M€ Net Debt / LTM EBITDA Adjusted: 2.4 x Sharp rise in EBITA margin and cash flow, decrease in
Slide 6: Activity by market
Activity by market Europe North America Asia Pacific #1 market position Other presence • High single-digit growth in most • Residential and related commercial • Continued double-digit growth major markets activities declining • Dynamism fuelled by commercial • Renovation representing more than • Res
Slide 7: Performance improvement levers in H1
Performance improvement levers in H1 07 Top line levers: Key account wins Growth initiatives in the US Branch openings on track E-commerce ahead of plan New market developments* Operating profit levers: Supplier concentration continuing Pricing management being rolled out Logistics excellence in pro
Slide 8: H1 Operating Levers
H1 07 Operating Levers Jean-Charles PAUZE, CEO 8
Slide 9: Top Line Levers / Significant Key Account wins in H1
Top Line Levers / Significant Key Account* wins in H1 07 Australia Italy Chile Examples Mining Power generation equipment Engineering H1 07 Sales up by 47% Signed contract 1.3 M€ invoiced achievements to 15.3MAUD 40 M€ target p.a. 10 M€ target p.a. Differentiating delivery Kittin
Slide 10: Top Line Levers / Driving growth initiatives in the US
Top Line Levers / Driving growth initiatives in the US Revenue synergies with key accounts Expanding service platforms Kitting OEM Limited competition Local relationship Global Account expertise 300 + USA locations 100+ GE stocking locations On-Site Inventory / Project Management Custome
Slide 11: Top Line Levers / Increasing market saturation
Top Line Levers / Increasing market saturation Opening branches at marginal cost Developing e-Commerce H1 07 25 branch openings in H1 5.6% of sales in June 07 vs. 4% in 2006 achievements Gross CAPEX : 1.8 M€ Rapid ramp-up in France and Belgium Rexel Belgium x 4 vs. H1 06 to 8% of sales in
Slide 12: Operating Profit Levers / Supplier partnership and pricing
Operating Profit Levers / Supplier partnership and pricing Ongoing supplier concentration Pricing excellence in H1 07 55% of purchases with Top 25 suppliers in H1 07 vs. 53.5% in H1 06 Raising prices of low turnover products in the US Addressing low profitability customers in Austria Defendi
Slide 13: Operating Profit Levers / Gexpro synergies ahead of plan
Operating Profit Levers / Gexpro synergies ahead of plan Dual banner strategy in the US Synergies tracking IESC Timely phase-out of transition agreements Net cost synergies of 1.5% of Gexpro sales in Y4 confirmed Ahead of plan with 2/3 of purchasing synergies confirmed to date H1 achievements
Slide 14: Operating Profit Levers / Logistics & IT roll-out plan
Operating Profit Levers / Logistics & IT roll-out plan Shifting towards the optimal corridor IT system rationalization on plan 9,0 8,5 Belgium Germany France Centralized model 8,0 7,5 Current projects 7,0 6,5 6,0 5,5 Zone 2002 2006 2007 2009 5,0 4,5 Canada North America 14 10 7 4 Hubs & spokes 4,0 3
Slide 15: Acquisition Lever / Attractive pipeline
Acquisition Lever / Attractive pipeline H1 07 achievements Completed six acquisitions for 63 M€ in annualized sales Strengthened regional market positions (BE, FR, UK, US) Increased presence in emerging countries (China) Expanded into new businesses (Australia) Standardized procedures Robust
Slide 16: H1 Financial Review
H1 07 Financial Review Nicolas LWOFF, CFO 16
Slide 17: Solid organic revenue growth
Solid organic revenue growth* % on a + 30 . 3 s Group: +4.5% in H1, +3.3% in Q2 p or t e d basi re Business environment consistent in Q1 and Q2 Strong Q2 06 base effect in each region -2.8% By zone: +27.4% FX rates Europe: +9.6% in H1, +7.7% in Q2 Significant growth in most geographies and end +4.5%
Slide 18: Improvement in adjusted gross margin
Improvement in adjusted gross margin* +70 bps +10 bps Geographic breakdown (% of sales) 24.8% H1 07 H1 06 24.3% 24.2% 24.1% 24.8 Group 24.1 Q2 06 Q2 07 H1 06 H1 07 26.9 Europe 26.4 + 20 bps On-going improvement in gross margin Operating levers such as pricing excellence, partnership developments wit
Slide 19: Significant increase in adjusted EBITA
Significant increase in adjusted EBITA* H1 07 Q2 07 +30 bps +40 bps 6.2% 6.1% +10 bps Reduction in +10 bps Reduction in +70bps S,G&A S,G&A 169 M€ Reduction 326 M€ +10 bps Reduction +50 bps in personnel in personnel costs Gross margin costs improvement +20 bps Gross margin 5.0% improvement Group +110
Slide 20: Doubling of net profit pre IPO-related costs
Doubling of net profit pre IPO-related costs* Variation of net profit pre IPO-related costs: + 97% Sharp rise in EBITA +98 M€ + 74 M€ Change in financial expenses 151 M€ and other income & expenses +15 M€ HYB redemption Repayment of 2005 SCA 77 M€ Post IPO-related Change in income taxes -39 M€ 19 M€
Slide 21: Strong improvement in free cash flow
Strong improvement in free cash flow EUR million H1 07 H1 06 Increase in Adjusted EBITDA Adjusted EBITDA 360 235 Reduction in working capital requirement Copper Adjustment 2 24 from 15.0% of sales in H1 06 to 13.6% in EBITDA 362 259 H1 07 (on a constant basis) Other operating revenues and costs (7)
Slide 22: Sound financial structure
Sound financial structure Shareholders’ Equity Net Debt 3,134 M€ Net Debt / Shareholders’ Equity 56% 1,740 M€ Net Debt / LTM EBITDA adjusted 2.4 x (vs. 2.7x at March 31, 2007 Pro Forma for IPO) June 30, 2007 Flexibility for development, financing secured on a 5 year basis 22
Slide 23: Outlook
Outlook Nicolas LWOFF, CFO 23
Slide 24: Assumptions and 2007 Objectives
Assumptions Continuation of organic growth in Europe and Asia-Pacific Continued challenging environment in North America Average June 07 copper prices and exchange rates in H2 07 2007 Objectives(1) Organic growth at least between 3% and 5% Adjusted EBITA margin revised upwards: above 5.8% Other Obje
Slide 25: Q&A
Q&A 25
Slide 26: Financial Calendar & Contacts
Financial Calendar & Contacts 26
Slide 27: Financial Calendar and Contacts
Financial Calendar Contacts November 13, 2007 Investors & Analysts - 7:30 AM CET: Q3 07 - Frédéric de Castro sales & results announcement Tel: +33 1 42 85 76 12 - 10:00 AM CET: conference call Email: [email protected] 27
Slide 28: Appendices
Appendices 28
Slide 29: Appendix 1: Condensed Income Statement
Appendix 1: Condensed Income Statement Six months to June 30th Three months to June 30th IFRS, unaudited, EUR million 2007 2006 Var (in %) 2007 2006 Var (in %) Reported basis Sales 5,304.8 4,071.5 +30.3% 2,728.5 2,104.8 +29.6% Gross profit 1,314.8 1,042.8 +26.1% 676.5 547.7 +23.5% As a% of sales 24.
Slide 30: Appendix 2: Condensed Balance Sheet
Appendix 2: Condensed Balance Sheet June 30, 2007 December 31, 2006 EUR million IFRS unaudited IFRS audited ASSETS Net intangible assets & Goodwill 3,287.8 3,250.5 Property, plant & equipment 268.1 268.5 Long term investments 41.3 39.3 Deferred tax assets 119.9 136.2 Total non-current assets 3,717.1
Slide 31: Appendix 3: Change in Net Debt
Appendix 3: Change in Net Debt EUR million, unaudited H1 2007 IFRS H1 2006 IFRS Q2 2007 IFRS Q2 2006 IFRS EBITDA 362.1 258.6 200.1 149.4 Other operating revenues & costs (7.3) (2.5) (5.7) (1.3) Change in Working capital (7.6) (85.7) (11.6) (44.3) Net capital expenditures 16.6 (18.7) (15.7) (12.7) Fr
Slide 32: Appendix 4: Evolution of sales by geographic area
Appendix 4: Evolution of sales by geographic area H1 07 H1 07/H1 06 H1 07/H1 06 Q2 07 Q2 07/Q2 06 Q2 07/Q2 06 Geographic area (in M€) Reported Constant * (in M€) Reported Constant * Europe 2,493.8 15,20% 9,60% 1,263.0 12,90% 7,70% of which France 8,90% 9,50% 8,20% 7,60% United Kingdom 8,80% 6,80% 7,