Rexel: Q4 sales & FY 2024 results

→ FY 24 sales at €19,285.1m, up +0.7% on a reported basis

• Same-day sales down (2.4)% in FY 2024; improving trends quarter after quarter
  • Q4 sales of €4,893.1m, down (0.5)% on a same-day basis (up +1.0% on an actual-day basis) thanks to positive momentum in North America, up +3.6%
  • Continued market share gains boosted by best-in-class services which includes digitalization
• Active acquisitions strategy contributing for +2.9% to FY 24 sales growth

→ FY 24 current adjusted EBITA margin at 5.9%, demonstrating resilience in a difficult macro environment

• Structural cost actions combined with rapid cost adaptation (FTE down (2.7)% versus volume down (1.5)% yoy), to mitigate impact of sales decline on our profitability

→ Digital sales penetration at 32% of sales in Q4 24, up +232bps

• Digital sales now above €6bn in 2024, making Rexel one of the largest digital BtB players
• Digital sales growth contributed to outperformance and productivity gains

→ FY 24 operating income of €845.9 million (vs €1,216.6 million in FY 23), including exceptional items (French Competition Authority fine for €124m against which Rexel has lodged an appeal, Goodwill impairment, acquisitions costs); net income of €341.0 million

→ Free cash flow conversion well above guidance at 76%, confirming our cash-generative model

→ Attractive return to shareholders: proposed dividend for 2024 of 1.20€ per share, for a 54% payout ratio, based on recurring net income of €662.3 million in 2024 (vs €823.3 million in 2023)

→ Executing our capital allocation strategy with a healthy balance sheet: indebtedness ratio at 1.83x

• Share buyback: €100m shares repurchased in 2024; €300m since mid-2022
• M&A: more than €500m of value creative acquisitions completed in 2024
• Portfolio management: disposal of Rexel business in New Zealand, signed on February 1^st, as a result of the continuous strategic review of our portfolio

→ 2025 outlook: Stable to slightly positive same-day sales growth, current adjusted EBITA margin at c. 6% and free cash flow conversion at c. 65% (excluding the €124m fine from the French Competition Authority to be paid in 2025)

→ Confirmation of Rexel's medium-term ambitions, driven by solid electrification trends, market outperformance, further transformation of the business model and acceleration of savings programs

Financial review for the period ended December 31, 2024

• This press release presents Rexel's consolidated financial statements for the year ended December 31, 2024. The audit procedures by the Statutory Auditors are in progress and their report on the consolidated financial statements for the year ended December 31, 2024 will be issued on February 14, 2025
• Full year 2024 financial report was authorized for issue by the Board of Directors on February 12, 2025
• The following terms are defined in the Glossary section of this document: Current EBITA; Current adjusted EBITA, EBITDA; EBITDAaL; Recurring net income; Free Cash Flow and Net Debt
• Unless otherwise stated, all comments are on a constant and adjusted basis and, for sales, at same number of working days

¹ See definition in the Glossary section of this document ² Change at comparable scope of consolidation      ³   EBITDAaL into FCF before interest and tax ⁴ In accordance to the AMF regulation, EBITA and adjusted EBITA are renamed current EBITA and current adjusted EBITA, with no change in the calculation methodology

SALES

Q4 sales up +3.6% year-on-year on a reported basis and down (0.5)% on a constant and same-day basis

up +3.6% on a reported basis. They include:

• Constant and same-day sales evolution of (0.5)%, including a (0.4)% contribution from volume as well as a negative selling-price effect of (0.7)% on non-cable products and +0.6% on cable products
• A positive calendar effect of +1.5%, translating into a +1.0% actual-day sales growth in the quarter
• A positive net scope effect of +2.1%, mainly resulting from the acquisitions of Talley and Electrical Supplies Inc in the US, completed respectively in June and July 2024 as well as Itesa in France, completed in October 2024
• A positive currency effect of +0.4%, mainly due to the appreciation of the US dollar and the British Pound against the euro

¹ Including cable

Sales were down (0.5)% on a constant and same-day basis or up +1.0% on a constant and actual-day basis. More specifically:

• The improvement compared to Q3 24 is mainly driven by US and Canada, offsetting the still muted situation in Europe notably in electrification
  • North America was up +3.6%, still driven by backlog execution of diversified projects
  • Europe was unchanged compared to Q3 24, with contrasting trends between countries
  • Asia-Pacific was slightly negative in the majority of countries excluding India; a similar performance to Q3
• The four electrification product categories (Solar, Electric Vehicle charging infrastructure, HVAC and Industrial Automation), represented 21% of sales and decreased by (8.2)% in Q4 (contribution:-190bps)
• Pricing for non-cable products was down (0.7)% and remains explained by deflation in solar across geographies and piping in North America
• The Q4 cable price contribution was positive at +0.6%, benefiting from more supportive copper prices for the second consecutive quarter
• Rexel posted further growth in digitalization, with digital now representing 32% of sales in Q4 2024, up +232bps compared to Q4 2023. Europe was at 43% of digital sales, up +357bps, North America was at 22%, a slight increase of +29bps and Asia-Pacific was at 22% (vs 9% in Q4 23) thanks to the adoption of Email to EDI in China

FY sales up +0.7% year-on-year on a reported basis, down (2.4)% on a constant and same-day basis

In FY 2024, Rexel posted sales of €19,285.1m, up +0.7% on a reported basis, supported by the positive contribution of our M&A strategy. They include:

• Constant and same-day sales evolution of (2.4)%, including a (1.5)% contribution from volume and a negative selling price of (0.7)% on non-cable products and (0.2)% on cable products
• A positive calendar effect of +0.5%
• A positive net scope effect of +2.7%, mainly resulting from +2.9% from acquisitions of Wasco and Itesa in Europe as well as Talley and Electrical Supplies Inc in North America, and remaining effect from disposal of Norway
• A neutral currency effect

Europe (49% of Group sales): Down (3.8)% in Q4 and (4.9)% in FY on a constant and same-day basis

In the fourth-quarter, sales in Europe declined by (2.2)% on a reported basis, including:

• Constant and same-day sales evolution of (3.8)%. This includes a negative volume and price contribution of respectively (3.6)% and (0.2)% (non-cable products for (0.8)% and +0.6% on cable products)
• A slightly positive calendar effect of +0.3%
• A positive net scope effect of +0.8%, resulting from the acquisition of Itesa in France
• A positive currency effect of +0.5%, mainly due to the appreciation of the British pound and the Swiss Franc against the euro

¹ Germany, Switzerland & Austria

More specifically:

• Electrification categories, especially solar, contributed negatively (down (8.3)% for a -170bps contribution)
• Core ED business, including cable, was down (2.1)% in contribution, broadly similar to Q3 24.

By country and cluster:

• Same-day sales in France decreased slightly by (1.3)%, outperforming the declining market. The positive momentum in non-residential mitigated lower demand in other end markets including residential and industry.
• Same day sales in the DACH region (Germany, Austria and Switzerland) were down (4.2)% in the quarter but improved vs Q3 24. Overall demand remained muted in the region and notably in Germany and Austria, in a challenging macroeconomic context and in the absence of recovery in Solar demand.
• Benelux declined by (7.9)%, with market outperformance in Belux. This performance is similar to the last two quarters, and is explained by the demand normalization in Solar.
• Same-day sales in the Nordics (Sweden and Finland) were down (1.4)% in Q4 due to residential and non-residential activities. Overall, demand in residential showed signs of improvement in H2 compared to H1 24.
• In the UK, sales were down (10.5)%, due to weak demand in all three markets as well as the closure of 24 branches completed towards the end of 2024.

North America (45% of Group sales): Strong sales growth at +3.6% in Q4 and +0.5% in FY on a constant and same-day basis

In the fourth-quarter, sales in North America were up +11.3% on a reported basis:

• Constant and same-day sales growth of +3.6%, driven by volume contribution of +3.6% and a stable price effect
• A positive calendar effect of +3.1%
• A positive +4.1% net scope effect, mainly resulting from the acquisitions of Talley and Electrical Supplies Inc in the US
• A slightly positive currency effect of +0.2%, mainly due to the appreciation of the US dollar against the euro

In North America:

• The overall good performance was driven once again by our backlog execution
• Core ED business, including cables, contributed to growth for +5.5% with positive volume
• Electrification categories were down (9.0)% (contributing for -200bps), from lower demand in Industrial automation both in the US and in Canada as well as in Solar, mostly in California.

Specifically, in our two countries:

• In the US, same-day sales were up +3.4% in Q4 2024
  • By business: Project activity continued to be driven by strong backlog execution, with project business up in double digits. Quotation activity remained healthy, with backlog still representing 2.5 months of sales, above pre-pandemic levels
  • By market: Growth was positive in all three end-markets. While residential (7% of sales) was up for a third consecutive quarters, growth in both non-residential and industry projects segments have accelerated sequentially, notably driven by datacenters, Oil & Gas, automotive and logistics. More specifically, the positive demand in electrical products in industry now more than offset the still negative evolution in industrial automation activity.
  • By region: Favorable momentum was confirmed in Gulf Central driven by Oil&Gas, in Southeast region (incl. Mayer) boosted by datacenters and new manufacturing plants, and in the Northwest, driven by residential activity
  • Very positive momentum at Talley. The integration is progressing well with very good top line momentum, exceeding initial plan
• In Canada, sales were up +4.4% on a same-day basis, with strong acceleration driven by project activity, showing double-digit increases in both non-residential and industrial segments. More specifically, growth in the quarter was driven by mining and manufacturing. Prices also contributed positively. The backlog overall was up 1% compared to the end of Q3 24

Asia-Pacific (6% of Group sales): (2.0)% in Q4 and (1.5)% in FY on a constant and same-day basis

In the fourth-quarter, sales in Asia-Pacific were stable on a reported basis, including:

• Constant and same-day sales change of (2.0)%, including negative volume and price contribution of (1.7)% and (0.4)%
• A positive calendar effect of +1.0%
• A positive currency effect of +1.0%, mainly due to the appreciation of the Australian dollar and the Yuan Renminbi against the euro

, sales decreased by (2.0)% on a constant and same-day basis:

• In Australia, sales were broadly stable at (0.3)%, supported by industrial markets, notably mining, as well as electrification activity (Solar and HVAC)
• In China, sales decreased by (6.3)%, in a context of low industrial demand. Inventories in the value chain have normalized, as reflected in prices, which improved sequentially. Q4 was also marked by customers acquisitions among OEM's, and a strong boost in digital, now at 31% of sales (vs 4% in Q4 23)
• In India, sales jumped by +22.3% in Q4 24 boosted by customer acquisitions in a favorable context.

PROFITABILITY

Current adjusted EBITA margin at 5.9% in 2024, down -98 bps compared to 2023

For the graph, please open the pdf file by clicking on the link at the end of the press release.

In a declining environment reflected by a (1.9)% actual-day sales evolution in 2024 with volume and selling prices both negative, profitability was resilient, as reflected by the current adjusted EBITA margin of 5.9%, compared to 6.8% in 2023.

More specifically :

• Gross margin stood at 24.8%, down -68 bps versus 2023, of which:
  • -25bps from the effects of selling price deflation and negative customer mix in North America (sales growth driven by projects activity)
  • -43bps from the more competitive commercial environment specifically in Europe
• Opex/sales stood at (19.0)%, deteriorating by -30 bps versus 2023 and explained by:
  • -32bps from operating deleveraging driven by the actual-day sales decline of (1.9)% in 2024
  • +2bps from active cost actions offsetting opex inflation:
    • Opex inflation stood at +2.4% (+3.6% from wage increases and +1.7% from other opex), impacting profitability by -45bps
    • Internal action plans resulted in +47bps from cost savings and productivity initiatives

Compared to the previous cycles, Rexel demonstrated its capacity to adapt its cost base in a declining sales environment. This was notably achieved through productivity initiatives, with headcount reduction accelerating in the course of 2024 to reach (2.7)% at end-December 24 (vs end-December 23), exceeding the volume decline of (1.5)%. Overall, opex declined by 1.1% (excluding depreciation) despite an opex inflation of 2.4%.

*Including €(35)m for corporate costs in 2024

By geography, the change in current adjusted EBITA margin in 2024 can be explained as follows:

• Europe was down -151 bps at 5.8% of sales, resulting from negative operating leverage combined with pricing pressure, notably on Solar activity, and increased a more competitive environment, partly mitigated by cost adaptation and accelerated strategic transformation action plans.
• North America was down a limited -42 bps at 7.0% of sales, thanks to improved sales momentum in H2 and strict opex discipline.
• Asia-Pacific was down -136 bps at 1.6% of sales, notably reflecting a more competitive environment in the region and deflation in China

As a result,

stood at €1,131.7m (vs. €1,347.2m in 2023 on a comparable base) and

stood at €1,139.3m (including a positive one-off copper effect of €7.6 million).

Focus on the bridge from reported EBITDA to current EBITA :

• EBITDA margin was down 60bps at 7.9%
• Depreciation of Right of Use stood at €(258.3) million vs. €(233.3) million in 2023, mainly resulting from acquisitions
• Other depreciation and amortization stood at €(117.9) million, implying 0.6% of sales

NET INCOME

Net income of €341.0 million in 2024; recurring net income of €662.3 million

Operating income in the year stood at €845.9m (vs €1,216.6m in 2023).

• Amortization of intangible assets resulting from purchase price allocation amounted to €(35.7) (vs. €(24.3)m in 2023)
• Other income and expenses amounted to a net charge of €(257.7)m (vs. a net charge of €(45.1)m in 2023) and notably included:
  • €(124.0)m related to the fine imposed by the French Competition Authority, against which Rexel has lodged an appeal, to be paid in 2025
  • €(54.8)m in goodwill & intangible assets impairment notably in Germany and UK
  • €(33.1)m in restructuring mostly in Europe and integration costs
  • €(22.0)m of asset impairment following the classification of New Zealand as an asset held for sale (disposal completed on February 1st, 2025)

• €(14.3)m in fair value adjustment for earn-out on Talley
• €(9.8)m in acquisition costs

amounted to €(207.7)m (vs. €(167.7)m in 2023), and can be broken down as follows:

• €(141.5) million from financial costs compared to €(112.0) million in 2023, reflecting higher interest rates and gross debt. The effective interest rate increased to 4.35% in 2024 from 3.66% in 2023
• €(66.2) million from interest on lease liabilities in 2024 vs €(55.6) million in 2023

represented a charge of €(297.2)m (vs. €(274.2) in 2023)

• The tax rate stood at 46.6% in 2024, due to non-deductible other expenses (including the competition authority fine in France and goodwill impairment) and deferred tax assets write-offs.
• The normative tax rate stood at 26.2% in 2024, excluding one-offs

stood at €341.0 million (vs. €774.7 million in 2023) and

amounted to €662.3 million in 2024 (vs €823.3 million in 2023) - see appendix 3

FINANCIAL STRUCTURE

Free cash-flow before interest and tax of €916.5 million in 2024

Indebtedness ratio of 1.83x at December 31, 2024

In 2024, free cash flow before interest and tax reached €916.5 million (vs. €996.4 million in 2023), representing a free cash flow conversion rate (EBITDAaL into FCF before interest and taxes) of 76%. It included:

• EBITDAaL of €1,204.3 million including €(311.3) million of lease payments in 2024
• Operating cash flow stood at €1,008.0 million notably including €(173.0) million of other operating revenue and costs, of which €(124)m fine from the French Competition Authority to be paid in 2025
• An outflow of €(55.8) million from the change in pensions obligations (vs €(21.3) million in 2023) due to an accelerated contribution to the UK pension funds of €36m (GBP30m)
• An inflow of €34.3 million from change in working capital (compared to an outflow of €(187.1) million in 2023)
  • The change in trade working capital was an outflow of €(15.5) million. On a constant basis, trade WCR stood at 14.2% of sales in 2024, stable compared to the prior year (14.1% in 2023)
  • The change in non-trade working capital was an inflow of €49.8 million, including €124m for the fine received from the French competition authority to be paid in 2025
• A lower level of net capital expenditure (i.e. €(125.8) million vs. €(153.3) million in 2023). Gross capex represented 0.7% of sales, a similar level to that of 2023, with continued investment in automated supply chain solutions and digital.

Below FCF before interest and tax, the cash flow statement took into account:

• €(129.6) million in net interest paid in 2024 (vs €(101.3) million paid in 2023);
• €(281.0) million in income tax paid in the year, compared to €(327.4) million paid in 2023;
• €(550.1) million in financial investment including earn-out;
• €(357.2) million in dividends paid in 2024 based on 2023 earnings (€1.20 per share);
• €(99.8) million in share buybacks;
• €(19.0) million in currency effects during the year (vs €10.4 million in 2023).

• Net financial debt increased by €522.3 million year-on-year to €2,483.9 million (vs €1,961.5 million at December 31, 2023), resulting from our active capital allocation (notably M&A, dividend payment and share buyback). It includes an estimation of the earn-out negotiated on Itesa and Talley and a put option on Mavisun, based on current development, for €123.8m
• The indebtedness ratio (Net financial debt/EBITDAaL), as calculated under the Senior Credit Agreement terms, stood at 1.83x

Proposed dividend for 2024 at 1.20€ per share

Rexel will propose to Shareholders to maintain the dividend at 1.20€ per share, to be paid fully in cash. This represents a payout of 54% of the Group's recurring net income, in line with Rexel's policy of paying out at least 40% of recurring net income.

This dividend, payable in cash on May 16^th, 2025 (detachment date on May 14^th), is subject to the approval of the Annual Shareholders' Meeting to be held in Paris on April 29, 2025.

Active portfolio management in 2024 with 3 acquisitions and 1 disposal

In 2024, with the completion of 3 acquisitions, Rexel confirmed its strong capability to integrate acquisitions and rapidly create value, through bolt-on operations and acquisitions of adjacent activities.

• In June, Rexel acquired Talley, a leading distributor of wireless infrastructure products and solutions in the United States, strongly reinforcing its exposure to the fast-growing data usage trends (circa $360m of sales, 300+ employees).