Rexel global sales slide 3.3% in 2013 but company sees mild improvement in 2014

Feb. 14, 2014
Sales of €13.012 billion, (approx. US$17.8 billion) down 3.3% on a reported basis and down 2.7% on a constant and same-day basis; sales sequentially improved in Q4 (-0.9% on a constant and same-day basis after -2.7% in Q3). Free cash flow of €601 million (approx. US$822.7 million) before interest and tax and €337m (approx. US$461.3 million after interest and tax, in line with the Group’s EBITDA conversion rate Net debt reduced by €407 million  (approx. US$461.3 million) or 16% year-on-year; improved indebtedness ratio at 2.72x EBITDA 2014 sales forecast for a range of around 1% below to around 2% above 2013 sales, on a constant and same-day basis.

Rexel announced its final 2013 sales and 2014 sales forecast this week. Total global 2013 sales were down 3.3% to €13.012 billion, (approx. US$17.8 billion). The company  is looking at a 2014 sales increase of 1%-2% in 2014,  but said that increase depending on the recovery in the nonresidential construction market in the United States and the overall economic recovery in Europe.

Rudy Provoost, chairman of the management board and CEO, said in the press release, “Rexel’s 2013 performance once again confirmed the strength of its business model in a persistently challenging environment, as well as its structural ability to generate solid cash flow throughout the cycle. Despite a 3% decline in organic sales, we delivered resilient profitability, driven by gross margin discipline and strict cost control. In line with our policy of paying out at least 40% of recurring net income, we will propose to our shareholders to maintain the 2014 dividend at last year’s level of €0.75 per share.

“With respect to 2014, the evolution of our sales and margin will be closely tied to the speed and magnitude of the recovery in Europe and the US non-residential end-market. In this context, we will continue to focus on further developing our high-growth initiatives, enhancing cash generation and increasing operating efficiency through margin discipline and cost control.

Given Rexel’s strong positions across the globe, its robust business model and engaged teams, we remain committed to our medium-term ambitions and are confident we will drive sustained value creation for all stakeholders.”

In the fourth quarter, the company’s North America sales were down 3.7% on a reported basis and broadly stable (- 0.3%) on a constant and same-day basis. Both the United States and Canada were impacted in the quarter by extremely severe weather conditions that continued in January.

U.S.  sales grew by 0.4% in the quarter, confirming the recovery in the residential end-market and improved trends in industry. It’s the fourth consecutive quarter of growth resulting in a 2.1% growth in the full-year. Canadian sales  were down 2.3% in the quarter (after a drop of 3.4% in the previous quarter). In the full-year, despite the significant impact of lower sales to the mining industry in the first three quarters of the year, sales proved rather resilient with a 3.4% drop in sales on a constant and same-day basis.

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