REXEL : THIRD-QUARTER AND NINE-MONTH 2017 RESULTS
(Thomson Reuters ONE) -
THIRD-QUARTER & NINE-MONTH 2017 RESULTS
ACCELERATING SAME-DAY SALES IN Q3, UP 5.2%
IMPROVING PROFITABILITY IN Q3 WHILE INVESTING IN THE US
FULL YEAR TARGETS CONFIRMED
- SALES OF ?3.239bn IN Q3, UP 1.4% ON A REPORTED BASIS
* Organic growth of 4.1% including -1.1% from calendar and +1.5% from copper
* On a constant and same-day basis, sales up 5.2% of which:
* Europe: +6.5%, benefiting from accelerating sales across most European
countries
* North America: +3.3%, supported by Proximity business in the US
* Asia-Pacific: +5.1%, driven by China and Australia
- ADJUSTED EBITA MARGIN OF 4.2% IN Q3
* Solid gross margin, up 18 bps at 24.1%, driven by North America
* Adj. EBITA margin up 17bps, while accelerating investments in the US
- STRONG INCREASE BOTH IN ADJUSTED EBITA (+8.5%) AND IN RECURRING NET INCOME
(+28.8%) IN Q3
- ALL THREE FULL-YEAR FINANCIAL TARGETS CONFIRMED, WITH ADJUSTED EBITA INCREASE
AT THE LOW END OF THE FEBRUARY GUIDANCE
-------------------------------------------------------------------------------
Key figures(1) Q3 2017 YoY change 9m 2017 YoY change
-------------------------------------------------------------------------------
Sales ?3,238.8m ?9,904.7m
On a reported basis +1.4% +2.1%
On a constant and actual-day +4.1% +2.9%
basis
On a constant and same-day basis +5.2% +2.8%
-------------------------------------------------------------------------------
Adjusted EBITA ?135.8m +8.5% ?420.8m +5.1%
As a percentage of sales 4.2% 4.2%
Change in bps as a % of sales +17bps +9bps
-------------------------------------------------------------------------------
Reported EBITA ?139.8m +12.0% ?431.8m +11.9%
-------------------------------------------------------------------------------
Operating income ?128.6m +19.7% ?361.1m +10.4%
-------------------------------------------------------------------------------
Net income ?67.1m +78.7% ?163.6m +22.6%
-------------------------------------------------------------------------------
Recurring net income ?68.8m +28.8% ?208.2m +11.0%
-------------------------------------------------------------------------------
FCF before interest and tax ?96.0m vs. ?31.2m ?19.6m vs. ?24.4m
-------------------------------------------------------------------------------
Net debt at end of period ?2,353.3m 6.3% reduction
-------------------------------------------------------------------------------
(1 )See definition in the Glossary section of this document
Patrick BERARD, Chief Executive Officer, said:
"Rexel's sales growth in the third quarter accelerated for the fourth
consecutive quarter, thanks notably to positive trends in France, the Nordic
countries and the US. We are clearly seeing the benefits of our first strategic
actions implemented in the US in terms of logistics organization and branch
network expansion.
Our gross margin and adjusted EBITA margin improved year-on-year despite cost
inflation in the UK and costs related to investments in future growth in the US,
as presented at our Capital Markets Day in February.
Based on our performance over the first nine months of the year and our
expectations for the last quarter, we confirm our full-year financial targets,
with adjusted EBITA increase at the low end of the February guidance.
Looking ahead, we remain focused on our key priorities: investment in the US, IT
and digitalization, turnaround in Germany and execution of the divestment
program."
FINANCIAL REVIEW FOR THE PERIOD ENDED SEPTEMBER 30, 2017
* Financial statements as of September 30, 2017 were authorized for issue by
the Board of Directors on October 26, 2017. They were not audited by
statutory auditors.
* The following terms: Reported 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 Q3, sales were up 1.4% year-on-year on a reported basis and up 5.2% on a
constant and same day basis, reflecting sequential improvement in all three
geographies.
In 9m, sales were up 2.1% year-on-year on a reported basis and up 2.8% on a
constant and same day basis
In the third quarter, Rexel posted sales of ?3,238.8 million, up 1.4% on a
reported basis. On a constant and same-day basis, sales were up 5.2%, including
a 1.5% positive effect due to the change in copper-based cable prices.
The 1.4% increase in sales on a reported basis included:
* A negative currency effect of ?77.3 million (i.e. -2.4% of Q3 2016 sales),
mainly due to the depreciation of the US dollar and the British pound
against the euro,
* A negative net scope effect of ?4.0 million (i.e. -0.1% of Q3 2016 sales),
mainly resulting from the recent divestments in South East Asia,
* A negative calendar effect of 1.1 percentage points.
In 9 months, Rexel posted sales of ?9,904.7 million, up 2.1% on a reported
basis. On a constant and same-day basis, sales were up 2.8%, including a 1.2%
positive impact due to the change in copper-based cable prices.
The 2.1% increase in sales on a reported basis included:
* A negative currency effect of ?38.0 million (i.e. -0.4% of 9m 2016 sales),
mainly due to the depreciation of the US dollar and the British pound
against the euro,
* A negative net scope effect of ?42.9 million (i.e. -0.4% of 9m 2016 sales),
mainly resulting from recent divestments (Poland, Slovakia, Baltics and
South East Asia), partly offset by the acquisition of Brohl & Appell in the
US,
* A positive calendar effect of 0.1 percentage points.
Europe (54% of Group sales): +6.5% in Q3 and +3.7% in 9m on a constant and same-
day basis
In the third quarter, sales in Europe increased by 3.8% on a reported basis,
including a negative currency effect of ?16.2m (mainly due to the depreciation
of the British pound against the euro). On a constant and same-day basis, sales
were up 6.5%.
Sales in most of Rexel's markets were in positive territory, supported by a
broadly favorable environment and a favorable base effect.
* Sales in France (35% of the region's sales) were up 9.1%, with trends
improving over the quarter in the three end-markets (residential, non-
residential and industry);
* Sales in Scandinavia (13% of the region's sales) were up 9.4%, notably
thanks to strong 15.5% growth in Sweden, where we gained market share in a
favorable environment in the three end-markets.
* Sales in Germany (12% of the region's sales) were up 5.5%, mainly driven by
the non-residential and industrial end-markets (notably cables, with a
+3.2% contribution);
* Benelux (8% of the region's sales) posted solid growth, with Belgium up
7.3% and The Netherlands up 14.4%, thanks to sales of photovoltaic equipment
(PV), contributing for 8.5% to growth in the quarter;
* In Switzerland (6% of the region's sales), sales were up 6.5%, mainly thanks
to Rexel's strategy of focusing on larger projects in an environment that
remains competitive.
However, sales dropped by 2.4% in the UK (12% of the region's sales) in a
challenging environment related to uncertainty around Brexit.
North America (36% of Group sales): +3.3% in Q3 and +2.1% in 9m on a constant
and same-day basis
In the third quarter, sales in North America were down 1.7% on a reported basis,
including a negative currency effect of ?50.6m (mainly due to the depreciation
of the US dollar against the euro). On a constant and same-day basis, sales were
up 3.3%.
* In the US (78% of the region's sales), sales were up 4.3% on a same-day
basis, despite a negative 1.2% effect from hurricanes Irma and Harvey. The
sales evolution was driven by:
* faster organic sales growth, especially in the Proximity business, with
Platt and Rexel C&I up in the high-single digits, offsetting lower growth in
the Project business, still impacted by the non-renewal of a wind contract
with a large contractor and by disruptions in the supply chain of a large
supplier;
* a continued improving trend in the Oil & Gas business, up 30%, contributing
for 1.4% to growth in the US;
* a positive impact of 0.7% percentage points, attributable to branch network
and counter expansion. At the end of September, 11 new branches have been
opened, of which 5 in Q3 2017. For FY 2017, 17 branch openings (of which 4
Platt branches in California) and 20 Platt-like counters in Gexpro branches
are forecasted, with a combined annualized sales contribution of around
USD50m or 1.25% of additional sales;
* a favorable base effect (Q3 2016 was down 6.6%).
* In Canada (22% of the region's sales), sales were down 0.4% on a same-day
basis, despite a better O&G business environment (up low to mid-single
digit) mainly due to maintenance activity in the midstream market. This
slight decrease is mainly due to a more challenging base effect. On a
sequential basis, it is worth noting the absence in the quarter of large
wind contract that boosted Q2 2017 sales (3.0% of the 5.3% sales growth in
Q2 2017).
Asia-Pacific (10% of Group sales): +5.1% in Q3 and +0.6% in 9m on a constant and
same-day basis
In the third quarter, sales in Asia-Pacific were down 0.1% on a reported basis,
including a negative scope effect of ?3.9m and a negative currency effect of
?10.5m. On a constant and same-day basis, sales were up 5.1%, mainly reflecting
strong growth in China and Australia, which offset South East Asia's poor
performance.
* In Asia (49% of the region's sales), sales were up 3.4%:
* In China (75% of Asia), sales grew by 9.6% on a constant and same-day
basis, helped by favorable comps (-11.2% in Q3 2016) and reflecting
increased sales of industrial automation products and solutions. It is
also worth noting that the comparable effect will become less favorable
in Q4 (-1.9% in Q4 16);
* In South East Asia (15% of Asia), sales dropped by 19.0%, mainly due to
the O&G market that remains very challenging, contributing for -10% of
sales evolution in the quarter.
* In the Pacific (51% of the region's sales), sales were up 6.8% on a constant
and same-day basis:
* In Australia (82% of Pacific), sales were up 10.2%, mainly reflecting
good momentum in the non-residential end-market (Proximity business);
* In New Zealand (18% of Pacific), sales were down 6.2% due to lower
project sales.
PROFITABILITY
Continued improvement in gross margin: +18bps in Q3 and +8bps in 9m
Adjusted EBITA margin of 4.2% in Q3, up 17bps, and of 4.2% in 9m, up 9bps
In the third quarter, gross margin was up 18 bps year-on-year, at 24.1% of sales
and opex (including depreciation) amounted to 19.9% of sales, stable year-on-
year.
* In Europe, gross margin stood at 26.2% of sales, down 16bps year-on-year,
mainly due to unfavorable cable margin contribution for -27bps, partly
offset by the benefits stemming from supplier concentration across Europe
and better gross margin, despite cost inflation, in the UK, thanks to
Rexel's transformation strategy, which includes the move to one banner.
Opex (including depreciation) amounted to 21.1% of sales, improving by 39bps due
to strict cost control.
* In North America, gross margin stood at 22.8% of sales. This represented a
76bps improvement year-on-year, coming from both the US (stronger margin in
the Proximity business, supplier concentration and pricing strategy) and
Canada (lower direct sales). This improvement was more than offset by opex
(including depreciation) that increased by 91bps (to 18.7% of sales),
impacted by investments in future growth in the US, including branch
openings, counter resets, commercial actions and logistic initiatives.
* In Asia-Pacific, gross margin stood at 17.7% of sales. It represented a
18bps deterioration year-on-year, impacted by the poor performance in South
East Asia. Opex (including depreciation) amounted to 16.4% of sales,
improving by 41bps, mainly thanks to strict credit management.
* At Corporate holding level, opex amounted to ?5.4m, compared to ?7.6m a year
ago, thanks to strict cost control. The normative level of spending at
corporate level remains unchanged at around ?30m per annum.
As a result, adjusted EBITA margin in Q3 stood at 4.2% of sales vs. 4.0% in Q3
2016, reflecting an improved adjusted EBITA margin in Europe (5.1% of sales vs.
4.9% in Q3 2016) and in Asia-Pacific (1.3% of sales compared to 1.0% in Q3
2016) offsetting the lower adjusted EBITA margin in North America (4.1% of sales
vs. 4.3% in Q3 2016);
In the Q3, reported EBITA stood at ?139.8 million (including a ?4.0m positive
one-off copper effect), up 12.0% year-on-year.
In the nine months, gross margin stood at 24.4% of sales, up 8bps year-on-year,
thanks to North America (up 39bps at 22.5% of sales) offsetting the
deterioration in Europe (down 5bps at 26.8% of sales) and Asia-Pacific (down
45bps at 17.9% of sales).
Opex (incl. depreciation) were broadly stable year-on-year at 20.1% of sales.
As a result, adjusted EBITA stood at ?420.8m at 4.2% of sales, up 9bps year-on-
year.
Reported EBITA stood at ?431.8m in 9m (including a ?11.1m negative one-off
copper effect) up 11.9%.
NET INCOME
Increase of 22.6% in net income in 9m, mainly driven by lower net financial
expenses
Operating income in 9m stood at ?361.1 million, vs. ?327.1m in 9m 2016.
* Amortization of intangibles resulting from purchase price allocation
amounted to ?14.3 million (vs. ?13.7 million in 9m 2016).
* Other income and expenses amounted to a net charge of ?56.4 million (vs. a
net charge of ?44.9 million in 9m 2016). They included ?20.5 million of
restructuring costs (vs. ?32.4 million in 9m 2016). They also included
charges, already booked in H1 2017, from goodwill impairment in Finland
(?12.8 million) and loss on asset disposals and termination of business in
South East Asia (?20.2 million), as previously disclosed.
Net financial expenses in 9m amounted to ?90.8 million (vs. ?114.1 million in
9m 2016). Both periods included charges related to refinancing operations:
* 9m 2017 included a net charge of ?6.3 million, related to early redemption
of the remaining outstanding USD330m from the Senior notes issued in April
2013;
* 9m 2016 included a net charge of ?17.1 million related to (i) the early
repayment of a ?650m Senior notes issued in 2013 and maturing in June 2020
and (ii) the early repayment of USD170m (c. ?150m) from the Senior notes
issued in April 2013 and maturing in June 2020.
Restated for those net charges, net financial expenses decreased from ?97.0
million in 9m 2016 to ?84.5 million in 9m 2017. This largely reflected lower
average debt year-on-year and lower average effective interest rate, thanks to
the various refinancing operations. The average effective interest rate on gross
debt decreased by 45bps year-on-year in 9m 2017 to 3.17% (vs. 3.62% in 9m 2016).
Income tax in 9m represented a charge of ?106.7 million (vs. ?79.7 million in
9m 2016), a rise of 34.0%, mainly reflecting a 26.9% increase in profit before
tax. The effective tax rate stood at 39.5% (vs. 37.4% in 9m 2016).
Net income in 9m rose by 22.6% to ?163.6 million (vs. ?133.4 million in
9m 2016).
Recurring net income in 9m amounted to ?208.2 million, up 11.0% year-on-year
(see appendix 2).
FINANCIAL STRUCTURE
Net debt reduced by 6.3% year-on-year at September 30, 2017
In 9m, free cash flow before interest and taxwas an inflow of ?19.6 million (vs.
an inflow of ?24.4 million in 9m 2016). This net inflow included:
* Net capital expenditure of ?77.6 million (vs. ?80.1 million in 9m 2016),
* An outflow of ?353.5 million from change in working capital on a reported
basis (vs. an outflow of ?300.2 million in 9m 2016). On a constant and
adjusted basis, trade working capital increased by 51bps as a percentage of
the last 12-month sales, from 13.8% at September 30, 2016 to 14.3% at
September 30, 2017, compared to a 100bps increase at June 30(th), 2017. This
increase reflected the rise in inventories to support a deeper and larger
offer and the opening of branches/counters in the US, as presented at the
Capital Markets Day.
At September 30, 2017, net debt stood at ?2,353.3 million, down 6.3% year-on-
year (vs. ?2,511.0 million at September 30, 2016).
It took into account:
* ?120.8 million of dividend paid early July,
* ?77.3 million of net interest paid in 9m (?25.5 million paid in Q3),
* ?91.3 million of income tax paid in 9m (?27.8 million paid in Q3),
* ?97.7 million of positive currency effect in 9m (positive effect of ?33.8
million in Q3).
OUTLOOK
Taking into consideration the performance of the first nine months and
expectations for the last quarter, Rexel confirms its 2017 full-year financial
targets, with adjusted EBITA(1) increase at the low end of the February
guidance:
* resuming organic growth, with sales up in the low single digits (on a
constant and same-day basis) after two years of decline;
* a mid- to high single-digit increase in adjusted EBITA;
* an indebtedness ratio (net-debt-to-EBITDA, as calculated under the Senior
Credit Agreement terms) of below 3 times at December 31, 2017.
(1) At comparable scope of consolidation and exchange rates and excluding (i)
amortization of PPA and (ii) the non-recurring effect related to changes in
copper-based cables price (unchanged)
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 5.
CALENDAR
February 14, 2018 Fourth-quarter and full-year results
2017
FINANCIAL INFORMATION
The financial report for the period ended September 30, 2017 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 third-quarter and 9-month 2017 results is also available on
the Group's website.
ABOUT REXEL GROUP
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 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® Global ESG Leaders, Ethibel
Sustainability Index Excellence Europe, Euronext Vigeo Eiris Eurozone 120 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
Ludovic DEBAILLEUX +33 1 42 85 76 12 ludovic.debailleux(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.
Q3 RESULTS 2017:
http://hugin.info/143564/R/2145148/822262.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: 27.10.2017 - 07:30 Uhr
Sprache: Deutsch
News-ID 565546
Anzahl Zeichen: 25203
contact information:
Town:
Paris
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 422 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"REXEL : THIRD-QUARTER AND NINE-MONTH 2017 RESULTS"
steht unter der journalistisch-redaktionellen Verantwortung von
REXEL (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
