THIRD-QUARTER 2022 SALES Record quarter with same-day sales growth up 16.3% Acceleration in volume growth capturing electrification trends & additional selling price increase 2022 guidance upgraded for the second time |
→ Sales of €4,816.6m in Q3 2022, up +16.3% on a same-day basis, accelerating after a robust start to the year
→ Record quarter driven by acceleration in volume growth (c. 750bps contribution in Q3 22 vs +60bps in Q2 22), demonstrating our ability to fully capture the boost in electrification, notably in
→ Strong selling price increase on non-cable products in all geographies (900bps contribution), reflecting pass-through of the rise in production costs
→ Robust growth in our three end-markets with Residential, Commercial and Industrial up double digits
→ Double-digit growth in all three geographies. Strong momentum in the US reflecting good underlying demand and internal transformation
→ Strategic focus on organic growth and M&A translating into +35.5% reported sales growth in Q3 22
→ Digital penetration up c. +240bps, representing c. 25% of Group revenues in Q3 22, with +467bps improvement in the US, now at c. 18% of digital sales
→ FY 22 guidance upgraded for same-day sales growth and adjusted Ebita margin
→ Share buyback with €60m completed (c. 3.7 million shares)
Key figures (€m) | Q3 2022 | YoY change | 9m 2022 | YoY change |
Sales on a reported basis | 4,816.6 | +35.5% | 13,899.4 | +31.0% |
On a constant and actual-day basis | +15.5% | +15.4% | ||
On a constant and same-day basis | +16.3% | +14.7% | ||
Same-day sales growth by geography | ||||
2,292.5 | +15.9% | 6,947.5 | +13.2% | |
808.3 | +10.2% | 2,570.8 | +9.3% | |
Scandinavia | 292.3 | +21.2% | 878.8 | +14.0% |
Benelux | 268.0 | +27.0% | 792.1 | +19.8% |
258.8 | +25.7% | 726.6 | +19.4% | |
194.8 | +9.5% | 613.9 | +12.2% | |
2,142.3 | +17.3% | 5,893.0 | +18.5% | |
US | 1,753.6 | +18.1% | 4,788.2 | +19.5% |
388.7 | +14.0% | 1,104.8 | +14.3% | |
381.8 | +12.7% | 1,058.9 | +5.0% | |
164.2 | +12.7% | 453.4 | +1.7% | |
161.8 | +12.7% | 445.5 | +7.4% |
Guillaume TEXIER, Chief Executive Officer, said: “Rexel benefited in the third quarter from solid underlying markets as well as accelerating demand for electrification, driven by the high price of energy, especially in Our strong third quarter is also an excellent illustration of how our new strategy, Power Up 2025, allows us to tap into high growth segments of the electrical materials market, driven by powerful and resilient mega trends such as sustainability, energy transition or resource and labor scarcity. These trends, combined with a very strong backlog and our relentless focus on efficiency and digital, position us well for the future, in an economic environment that continues to offer little visibility.” |
SALES REVIEW FOR THE PERIOD ENDED |
- 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 +35.5% year-on-year on a reported basis and +16.3% on a constant and same-day basis, reflecting positive momentum in all three geographies.
Key figures (€m) | Q3 2022 | YoY change | 9m 2022 | YoY change |
Sales on a reported basis | 4,816.6 | +35.5% | 13,899.4 | +31.0% |
On a constant and actual-day basis | +15.5% | +15.4% | ||
On a constant and same-day basis | +16.3% | +14.7% |
In the third quarter,
- A positive constant and same-day sales growth of +16.3%
- A negative calendar effect of (0.8)%
- A positive currency effect of €235.2m (i.e. +6.6% of Q3 2021 sales), mainly due to the appreciation of the US & Canadian dollars against the euro;
- A positive net scope effect of €380.7m (i.e. +10.7% of Q3 2021 sales), mainly due to Mayer acquisition in the US.
On a constant and same-day basis, sales were up +16.3% resulting from :
- Accelerating trends in all 3 geographies with
North America up +17.3%,Europe up +15.9% andAsia-Pacific up +12.7%. - Robust volume growth, reflecting favorable underlying demand as well as our ability to benefit from electrification trends and growing demand for energy efficiency solutions amid rising energy costs, as illustrated by above-Group average growth of product categories such as PV, EV or HVAC.
By geography :
North America is up +10.1% in volume in the quarter, twice the Q2 22 growth of +5.1%, notably thanks to favorable trends in Project activity and sustained demand in ProximityEurope is up +5.7% in volume vs (0.5)% in Q2 22 on market share gains, an easier base effect and strong demand in electrificationAsia-Pacific is up +4.1% in volume vs (13.6)% in Q2 22, benefiting from the post-lockdown recovery inChina and positive momentum inAustralia .
- A favorable pricing environment for non-cable products (900bps contribution in the quarter), resulting from an additional rise recorded in Q3 2022, offsetting the lower expected carryover effect of price increases passed in 2021. Those additional rises in selling price result from the overall rise of production costs from our suppliers, notably reflecting increases in wages and energy costs.
- A neutral copper-cable price contribution (-0.2% contribution in Q3 2022), resulting from the lower copper price during the quarter compared to Q3 21.
- Further growth in digitalization in all three geographies, with a strong increase in the US. Digital sales now represent c. 25% of sales, up c. 240bps, with
North America up +409bps (16.9% of sales),Europe up +127bps (35.2% of sales) andAsia-Pacific up +49bps (5.5% of sales).
In the quarter, supply chain tensions improved slightly overall, with the exception of semi-conductors. This “scarcity environment” continues to be an opportunity for
In 9m 2022,
- A positive constant and same-day sales growth of +14.7% including a positive impact of +1.9% from the change in copper-based cable prices (vs a positive impact of +5.2% in 9m 2021)
- A positive calendar effect of +0.7%
- A positive currency effect of €516.2m (i.e. +4.9% of 9m 2021 sales), mainly due to the appreciation of the US & Canadian dollars against the euro
- A positive net scope effect of €916.1m (i.e. +8.6% of 9m 2021 sales), mainly resulting from the acquisition of Mayer in the US
In the third quarter, sales in
Key figures (€m) | Q3 2022 | YoY change | 9m 2022 | YoY change |
2,292.5 | +15.9% | 6,947.5 | +13.2% | |
808.3 | +10.2% | 2,570.8 | +9.3% | |
Scandinavia | 292.3 | +21.2% | 878.8 | +14.0% |
Benelux | 268.0 | +27.0% | 792.1 | +19.8% |
258.8 | +25.7% | 726.6 | +19.4% | |
194.8 | +9.5% | 613.9 | +12.2% | |
158.7 | +6.3% | 451.7 | +5.2% |
Overall in
- Sales in
France (35% of the region’s sales) were up +10.2%, driven by continued market share gains amid labor and product scarcity. The environment remains favorable in the renovation construction business (both residential and commercial). Electric Vehicles, Photovoltaic and HVAC contributed for c. 200bps. The quarter was also marked by higher digital penetration (c. 29% of sales, up c. 260bps). - Sales in Scandinavia (13% of the region’s sales) were up +21.2%. Robust sales growth in
Sweden , the largest country, was driven by the Residential market, largely boosted by our ability to serve PV demand. The Commercial and Industrial segments also contributed to the overall growth. - Benelux (12% of the region’s sales) grew by +27.0%, thanks to renewable energy products (PV/EV/HVAC representing 18% of sales, up c. 90% yoy and contributing for 1,110bps), in a context of rising energy prices.
- Sales in
Germany (11% of the region’s sales) posted strong +25.7% growth, with further market share gains while increasing business selectivity. Growth during the quarter was supported by Residential and Industrial markets. PV demand was a major growth driver (up c. 280%, contributing for 1,270bps), driven by the focus on increasing the country’s energy independence in the context of the war inUkraine . Industrial demand was driven by machine manufacturers, automotive and energy & water markets. - In the
UK (8% of the region’s sales), sales increased by +9.5%, mostly from the Commercial segment. The country benefited from a strong selling price contribution to compensate for currency depreciation on imported products.
In the third quarter, sales in
Key figures (€m) | Q3 2022 | YoY change | 9m 2022 | YoY change |
2,142.3 | +17.3% | 5,893.0 | +18.5% | |
1,753.6 | +18.1% | 4,788.2 | +19.5% | |
Gulf Central | +40.8% | +38.4% | ||
Mountain Plains | +38.6% | +36.1% | ||
+33.5% | +20.1% | |||
Midwest | +28.9% | +20.8% | ||
+21.5% | +21.6% | |||
Northwest | +15.2% | +20.0% | ||
Southeast | +13.8% | +13.9% | ||
Northeast | +13.6% | +6.9% | ||
Mayer | +2.7% | +11.6% | ||
388.7 | +14.0% | 1,104.8 | +14.3% |
- In the US (82% of the region’s sales), sales posted solid +18.1% growth on a same-day basis, accelerating compared to Q2 22 with above average trends in Gulf Central (Industrial automation and Oil & Gas), Mountain Plains (Commercial segment in large cities) and
California (Commercial business). By market, all three end-markets grew at a similar pace with further positive development in Commercial, Residential and Industrial. We recorded a growth acceleration in our Projects activity and a steady level of order intake. - In
Canada (18% of the region’s sales), sales grew by +14.0% on a same-day basis. It was notably driven by the Industrial end-market up c. 25%, contributing for c. 1,060bps notably boosted by robust demand in oil & gas and mining, contributing to growth for 190bps and 100bps respectively.
In the third quarter, sales in
Key figures (€m) | Q3 2022 | YoY change | 9m 2022 | YoY change |
381.8 | +12.7% | 1,058.9 | +5.0% | |
164.2 | +12.7% | 453.4 | +1.7% | |
161.8 | +12.7% | 445.5 | +7.4% |
- In the Pacific (51% of the region’s sales), sales were up +14.8% on a constant and same-day basis:
- In
Australia (83% of Pacific’s sales), sales increased by +12.7%, accelerating from 5% in Q2, driven by robust growth in all segments, particularly Commercial, amid labor scarcity.
- In
- In
Asia (49% of the region’s sales), sales increased by +10.6% on a constant and same-day basis:- In
China (88% of Asia’s sales), sales were up +12.7%. The acceleration post lockdown was supported by demand from machinery, automotive, power and renewables. The quarter benefited from selling price increases.
- In
FY 2022 OUTLOOK |
Following stronger than projected activity, we are upgrading our FY 22 guidance for the second time.
We now anticipate for 2022, at comparable scope of consolidation and exchange rates:
- Same-day sales growth of c. 12% (vs 7%-9% previously)
- An adjusted EBITA1 margin of c. 7.2%, including 70bps of non-recurring items (vs 6.7%, including 50bps of non-recurring items)
- Free cash flow conversion2 above 60% (unchanged)
1 Excluding (i) amortization of PPA and (ii) the non-recurring effect related to changes in copper-based cable prices.
2 FCF Before interest and tax/EBITDAaL
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 2.
CALENDAR |
April 20, 2023 First-quarter 2023 sales
April 20, 2023 Annual Shareholders’ Meeting
FINANCIAL INFORMATION |
A slideshow of the third quarter 2022 sales is available on the Group’s website.
ABOUT REXEL GROUP |
For more information, visit www.rexel.com/en.
CONTACTS |
FINANCIAL ANALYSTS / INVESTORS
Ludovic DEBAILLEUX | +33 1 42 85 76 12 | ludovic.debailleux@rexel.com |
PRESS
Brunswick: Thomas KAMM | +33 1 53 96 83 92 | tkamm@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 Reported 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.
EBITDAaL is defined as EBITDA
after deduction of lease payment following the adoption of IFRS16.
RECURRING NET INCOME is defined as net income restated 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.
APPENDIX |
For appendix, 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 17% 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
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
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 Universal Registration Document registered with the French Autorité des Marchés Financiers (AMF) on
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.
This document includes only summary information and must be read in conjunction with Rexel’s Universal Registration Document registered with the AMF on
Attachment
- PR - Third-quarter 2022 Sales
Source:
2022 GlobeNewswire, Inc., source