REXEL : ANNUAL RESULTS 2016
(Thomson Reuters ONE) -
FULL-YEAR 2016 RESULTS
FULL-YEAR 2016 PERFORMANCE IN LINE WITH GUIDANCE
ORGANIC SALES STABILIZED IN Q4, WITH IMPROVEMENT IN ALL THREE GEOGRAPHIES
STRONG 58% INCREASE IN NET INCOME FROM CONTINUING OPERATIONS
STABLE PROPOSED DIVIDEND OF ?0.40 PER SHARE PAYABLE IN CASH
FULL-YEAR 2016 PERFORMANCE IN LINE WITH GUIDANCE
* Sales of ?13.2bn, down 1.9% on a constant and same-day basis, including
negative effects from copper (-0.9%) and Oil & Gas (-0.9%)
* Adjusted EBITA margin of 4.2%, down 27bps year-on-year
* Solid cash-flow at 69% of EBITDA before interest and tax and 42% of EBITDA
after interest and tax
ORGANIC SALES STABILIZED IN Q4, WITH IMPROVEMENT IN ALL THREE GEOGRAPHIES
* Europe back to growth (+1.7% in Q4), mainly driven by France
* Sequential improvement in North America (-2.0% in Q4 after -6.0% in Q3),
driven by the USA, and Asia-Pacific (-1.9% in Q4 after -5.6% in Q3), mainly
driven by China
STRONG 58% INCREASE IN NET INCOME FROM CONTINUING OPERATIONS
STABLE PROPOSED DIVIDEND OF ?0.40 PER SHARE PAYABLE IN CASH
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Key figures(1) FY 2016 YoY change
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Sales ?13,162.1m
On a reported basis -2.8%
On a constant and actual-day basis -1.7%
On a constant and same-day basis -1.9%
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Adjusted EBITA ?549.8m -7.6%
As a percentage of sales 4.2%
Change in bps as a % of sales -27bps
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Reported EBITA ?539.6m -5.8%
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Operating income ?397.0m +4.6%
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Net income from continuing op. ?134.3m +58.0%
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Recurring net income ?250.3m -7.1%
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FCF before interest and tax from continuing op. ?439.1m vs. ?562.6m
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Net debt at end of period ?2,172.6m -1.2%
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(1 )See definition in the Glossary section of this document
Patrick BERARD, Chief Executive Officer, said:
"Our performance in 2016 was in line with guidance, despite an environment that
remained challenging throughout most of the year.
In the last quarter of the year, Rexel posted stable organic sales after three
quarters of decline. Sales improved sequentially in all three geographies,
mainly driven by France, reflecting improved activity in all end-markets; the
USA, where Oil & Gas started to show signs of stabilization while construction
activity remained solid; and China, thanks to improving industrial activity.
This sequential improvement in sales trends and the strategic orientations that
we will present today at our Capital Markets Day augur well for 2017. The
outlook for the year, fully consistent with the medium-term ambitions that we
will detail during the Capital Markets Day, targets a resumption of organic
growth, with sales up in the low single digits, and a mid to high single-digit
increase in adjusted EBITA, both on a constant and adjusted basis.
We will propose a cash dividend of ?0.40 per share, stable compared to last year
and in line with our pay-out policy."
FINANCIAL REVIEW FOR THE PERIOD ENDED DECEMBER 31, 2016
* Financial statements as of December 31, 2016 were authorized for issue by
the Board of Directors on February 10, 2017. They have been audited by
statutory auditors.
* The following terms: EBITA, Adjusted EBITA, EBITDA, Recurring net income,
Free Cash Flow and Net Debt are defined in the Glossary section of this
document.
* Unless otherwise stated, all comments are on a constant and adjusted basis
and, for sales, at same number of working days.
SALES
In Q4, sales were down 1.5% year-on-year on a reported basis and stable year-on-
year on a constant and same-day basis, reflecting improvement in organic sales
in all three geographies
In the full year, sales were down 2.8% year-on-year on a reported basis and down
1.9% year-on-year on a constant and same-day basis
In the fourth quarter, Rexel posted sales of ?3,457.7 million, down 1.5% on a
reported basis and stable on a constant and same-day basis. Excluding the 0.1%
negative impact due to the change in copper-based cable prices, sales were up
0.1% on a constant and same-day basis.
The 1.5% decrease in reported sales included:
* A net negative currency effect of ?28.9 million (mainly due to the
depreciation of the British pound against the euro),
* A net negative effect of ?7.3 million from changes in the scope of
consolidation (acquisitions of Sofinther in France and Brohl & Appell in the
US and divestments of Poland, Slovakia and Baltics),
* A negative calendar effect of 0.5 percentage points.
In the full year, Rexel posted sales of ?13,162.1 million, down 2.8% on a
reported basis and down 1.9% on a constant and same-day basis. Excluding the
0.9% negative impact due to the change in copper-based cable prices, sales were
down 1.0% on a constant and same-day basis.
The 2.8% decrease in reported sales included:
* A net negative currency effect of ?212.7 million (mainly due to the
depreciation of the British pound and Canadian dollar against the euro),
* A net positive effect of ?59.2 million from changes in the scope of
consolidation (acquisitions of Sofinther in France, Electro-Industrie en
Acoustiek in Belgium, Zhonghao Technology in China and Brohl & Appell in the
US and divestments of Poland, Slovakia and Baltics),
* A positive calendar effect of 0.2 percentage points.
Europe (54% of Group sales): +1.7% in Q4 and -0.1% in FY on a constant and same-
day basis
In the fourth quarter, sales in Europe decreased by 2.8% on a reported basis,
including three negative effects: a calendar effect of -1.1%, a negative net
scope effect of ?12.7m and a negative currency effect of ?50.5m (mainly due to
the depreciation of the British pound against the euro). On a constant and same-
day basis, sales were up 1.7%. This return to organic sales growth in Q4
represented a significant improvement over Q3 (-1.6%) and was mainly driven by
France.
* In France (35% of the region's sales), sales were up 3.6%, mainly reflecting
improved performance in all three segments (non-residential, residential and
industry).
* In Scandinavia (14% of the region's sales), sales remained solid and grew by
3.2%. This performance was driven by strong activity in Sweden (+10.0%).
* In Germany (11% of the region's sales), sales were up 1.2%, continuing to
improve sequentially since the beginning of 2016.
* In the UK (11% of the region's sales), sales continued to be impacted by
adverse market conditions since the Brexit vote and lower sales of
photovoltaic equipment since the end of feed-in tariffs on December
31, 2015. UK sales were down 7.9%, of which -6.1 percentage points due to a
sharp drop of 92% in sales of photovoltaic equipment.
* In other European countries:
* Benelux (8% of the region's sales) posted strong growth of 10.4%, with
Belgium up 5.5% and The Netherlands up 18.4%,
* Sales in Switzerland (6% of the region's sales) continued to be impacted
by unfavorable market conditions (down 2.0%) while Austria (5% of the
region's sales) was up 1.5%,
* Southern Europe (5% of the region's sales) posted sales drops in all
countries: Spain (-8.0%) was mainly impacted by export activity while
domestic activity was down only 2.2%; Italy was down 3.5% and Portugal
down 2.4%.
North America (36% of Group sales): -2.0% in Q4 and -4.1% in FY on a constant
and same-day basis
In the fourth quarter, sales in North America were up 0.5% on a reported basis,
including a positive calendar effect of 0.7%, a positive currency effect of
?17.7m (mainly due to the appreciation of the American and Canadian dollars
against the euro) and a positive scope effect of ?5.4m. This is a strong
sequential improvement compared to the 6.0% drop posted in Q3, mainly driven by
the US.
* In the US (80% of the region's sales), sales posted significant sequential
improvement and were down only 1.5% (vs. -6.6% in Q3), of which:
* -1.5 percentage points were attributable to lower O&G sales, despite a
sequential improvement (-23% vs. -31% in Q3),
* -1.6 percentage points were attributable to branch network optimization.
Excluding both impacts, sales were up 1.6% in Q4, reflecting contrasting
performance:
* Solid construction activity contributed to sales growth at both Rexel C&I
and Platt,
* Capitol Light posted double-digit growth, boosted by new projects,
* Automation activity improved sequentially, with a limited drop year-on-year,
* Other businesses (mostly Gexpro operations) posted a combined drop in sales
in the mid-single digits, due to continued weak industrial activity.
* In Canada (20% of the region's sales), sales were stable sequentially, down
4.0%, of which:
* -1.7 percentage points attributable to lower O&G sales (down 23% year-
on-year),
* -1.5 percentage points attributable to lower wind sales (down 89% year-
on-year).
Excluding both impacts, sales were down 0.8% in Q4, reflecting weak sales to
industry.
Asia-Pacific (10% of Group sales): -1.9% in Q4 and -2.7% in FY on a constant and
same-day basis
In the fourth quarter, sales in Asia-Pacific were down 1.6% on a reported basis,
including a negative calendar effect of 0.8% and a positive currency effect of
?3.9m (mainly due to the appreciation of the Australian and New Zealand dollars
offsetting the depreciation of the Chinese yuan against the euro). On a constant
and same-day basis, sales were down 1.9%, mainly reflecting a sequential
improvement in China and growth in Australia.
* Asia (52% of the region's sales), driven by China, improved sequentially.
Sales were down 4.1% (vs. -9.0% in Q3):
* In China (c. 67% of Asia), sales dropped by a limited 1.9% (vs. double-
digit declines in the two previous quarters), reflecting strong
improvement in industrial automation products and solutions,
* In South-East Asia (22% of Asia), sales continued to be impacted by the
sharp drop (-32%) in O&G activity and were down 16.8% (vs. -13.3% in
Q3),
* In the Rest of Asia (11% of Asia), sales continued to grow by double
digits (+17.2%), with sales up 19.9% in India and 14.3% in the Middle
East.
* Pacific (48% of the region's sales), driven by Australia, also improved
sequentially. Sales were up 0.6% (vs. -1.9% in Q3):
* In Australia (80% of Pacific), sales were up 0.7% (vs. -2.6% in Q3),
despite more challenging comparables,
* In New Zealand (20% of Pacific), sales were broadly stable (+0.1%), as
project activity in the Auckland region offset the slowdown of
rebuilding activity in the Christchurch region, which is close to
completion.
PROFITABILITY
Improved gross margin
Adjusted EBITA margin of 4.2%, in line with guidance
In the full year, gross margin stood at 24.2% of sales, up 14bps year-on-year,
reflecting broadly stable margin in Europe (at 26.7% of sales) and improvement
in North America (up 13bps at 22.1% of sales) and Asia-Pacific (up 63bps at
18.0% of sales).
Opex (incl. depreciation) were slightly up in value (+0.4%) but deteriorated by
41bps to 20.0% of sales. In Europe, opex were up 2.8%, mainly reflecting higher
depreciation related to increased investment and higher salaries and benefits,
while sales were flat on a constant and actual-day basis. In North America and
Asia-Pacific, opex were down 2.3% and 0.6% respectively, but these decreases did
not offset drops in sales of 4.1% and 2.8% respectively on a constant and
actual-day basis. Corporate Holdings and Other costs were reduced by 25% from
?36.6m in FY 2015 to ?27.3m in FY 2016.
As a result, adjusted EBITA margin stood at ?549.8m, down 27bps to 4.2% of
sales, in line with guidance.
Reported EBITA stood at ?539.6m in the full year (including a ?10.1m negative
one-off copper effect), down 5.8% year-on-year.
NET INCOME
Strong 58% increase in net income from continuing operations
Operating income in the full year stood at ?397.0 million, up 4.6% year-on-year.
* Amortization of intangibles resulting from purchase price allocation
amounted to ?18.7 million (vs. ?17.0 million in 2015),
* Other income and expenses amounted to a net charge of ?124.0 million (vs. a
net charge of ?176.5 million in 2015). They included:
* ?59.3 million of restructuring costs (vs. ?58.7 million in 2015),
* ?46.8 million from goodwill impairment (vs. ?84.4 million in 2015),
mainly related to operations in China (?38.3 million), Slovenia (?4.7
million) and South-East Asia (?3.8 million).
Net financial expenses in the full year amounted to ?146.3 million (vs. ?210.0
million in 2015). This reduction reflected both lower one-off charges related to
refinancing operations that amounted to ?(16.3)m in 2016 vs. ?(52.5)m in 2015
and the reduction in interest expense on gross debt from ?(125.5)m in 2015 to
?(108.9)m in 2016. In the full year, the average effective interest rate on
gross debt decreased by 35 basis points year-on-year, reflecting recent debt
refinancing operations: it stood at 3.54% (vs. 3.89% in 2015).
Income tax in the full year represented a charge of ?116.4 million (vs. ?84.4
million in 2015). The increase is mainly due to higher profit before tax. The
effective tax rate stood at 46.4% (vs. 49.8% in 2015).
Net income from continuing operations in the full year was up 58.0%, at ?134.3
million (vs. ?85.0 million in 2015).
There was no impact from discontinued operations (vs. a loss of ?69.3 million in
2015).
Reported net income in the full year amounted to ?134.3 million (vs. ?15.7
million in 2015).
Recurring net income in the full year amounted to ?250.3 million (vs. ?269.4
million in 2015) (see appendix 2).
FINANCIAL STRUCTURE
Solid generation of free cash-flow
Stable net debt and indebtedness ratio
In the full year, free cash-flow before interest and tax from continuing
operationswas an inflow of ?439.1 million (vs. an inflow of ?562.6 million in
2015). This net inflow included:
* Gross capital expenditure of ?115.8 million (vs. ?119.5 million in 2015),
* An outflow of ?26.1 million from change in working capital (vs. an inflow of
?103.8 million in 2015).
At December 31, 2016, net debt stood at ?2,172.6 million (vs. ?2,198.7 million
at December 31, 2015). Net debt was reduced by ?42.2 million before the
unfavorable impact of currency and by ?26.1 million after this impact. It took
into account:
* ?118.8 million of net interest paid during the year,
* ?54.6 million of income tax paid during the year,
* ?91.6 million of net financial investments during the year,
* ?120.3 million of dividend paid during the year,
* ?16.1 million of negative currency effect.
At December 31, 2016, the indebtedness ratio (Net financial debt / EBITDA), as
calculated under the Senior Credit Agreement terms, stood at 3.0x, stable year-
on-year.
STABLE PROPOSED DIVIDEND OF ?0.40 PER SHARE, PAYABLE IN CASH
Rexel will propose to shareholders a dividend of ?0.40 per share, similar to
last year and representing 48% of the Group's recurring net income (vs. 45% last
year). This is in line with Rexel's policy of paying out at least 40% of
recurring net income.
This dividend, payable in cash early in July 2017, will be subject to approval
at the Annual Shareholders' Meeting to be held in Paris on May 23, 2017.
2017 OUTLOOK
In an environment that will likely continue to be impacted by economic and
political uncertainty, Rexel aims at achieving the following full-year 2017
targets, which are fully consistent with the medium-term ambitions and strategy
that Rexel will outline today at its Capital Markets Day (CMD):
* After two years of decline, Rexel targets resuming organic growth, with
sales up in the low single digits (on a constant and same-day basis); this
target takes into consideration market prospects prevailing as of today and
the first effects of measures detailed during today's CMD to accelerate
organic growth over the medium-term;
* In addition, Rexel targets a mid to high single-digit increase in adjusted
EBITA; this target reflects the expected growth in sales combined with the
first effects of measures detailed during today's CMD to improve operational
and financial performance over the medium-term;
* Lastly, Rexel targets an indebtedness ratio (net debt-to-EBITDA as
calculated under the Senior Credit Agreement terms) of below 3 times at
December 31, 2017.
CALENDAR
April 28, 2017 First-quarter results
May 23, 2017 Annual shareholders' meeting
July 31, 2017 Second-quarter and half-year
results
October 27, 2017 Third-quarter and nine-month results
FINANCIAL INFORMATION
The financial report for the period ended December 31, 2016 is available on the
Group's website (www.rexel.com), in the "Regulated information" section, and has
been filed with the French Autorité des Marchés Financiers.
A slideshow of the fourth-quarter and full-year 2016 results is also available
on the Group's website.
ABOUT REXEL GROUP
Rexel, a leader in the professional distribution of products and services for
the energy world, addresses three main markets - residential, commercial and
industrial. The Group supports its customers to be at their best in running
their business, by providing a broad range of sustainable and innovative
products, services and solutions in the field of technical supply, automation
and energy management. Rexel operates through a network of some 2,000 branches
in 32 countries, with more than 27,000 employees. The Group's sales were ?13.2
billion in 2016.
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, STOXX600. Rexel is also
part of the following SRI indices : FTSE4Good, STOXX® (STOXX® Global ESG Impact,
STOXX® Low Carbon indices Global, Europe et EURO), Ethibel Sustainability Index
Excellence Europe and Dow Jones Sustainability Index Europe, in recognition of
its performance in corporate social responsibility (CSR). For more information,
visit Rexel's web site at www.rexel.com
CONTACTS
FINANCIAL ANALYSTS / INVESTORS
Marc MAILLET +33 1 42 85 76 12 marc.maillet(at)rexel.com
Florence MEILHAC +33 1 42 85 57 61 florence.meilhac(at)rexel.com
PRESS
Elsa LAVERSANNE +33 1 42 85 58 08 elsa.laversanne(at)rexel.com
Brunswick: Thomas KAMM +33 1 53 96 83 92 tkamm(at)brunswickgroup.com
GLOSSARY
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 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.
RECURRING NET INCOME is defined as net income adjusted 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.
APPENDICES
For appendices, please open the PDF file by clicking on the link at the end of
the press release.
DISCLAIMER
The Group is exposed to fluctuations in copper prices in connection with its
distribution of cable products. Cables accounted for approximately 14% 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 cables 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 Document de Référence registered
with the French Autorité des Marchés Financiers (AMF) on April 7, 2016 under
number D16-0299. 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 Document de Référence registered with the AMF on April 7, 2016
under number D16-0299, as well as the consolidated financial statements and
activity report for the 2015 fiscal year which may be obtained from Rexel's
website (www.rexel.com).
REXEL ANNUAL RESULTS 2016:
http://hugin.info/143564/R/2077920/781806.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: REXEL via GlobeNewswire
Unternehmensinformation / Kurzprofil:
Datum: 13.02.2017 - 07:30 Uhr
Sprache: Deutsch
News-ID 523551
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