Half Year 2024 Rexel SA Earnings Call Transcript
Key Points
- Rexel SA (RXEEY) reported sales of EUR 9.6 billion in the first half of 2024, showing a 1.8% increase in Q2, driven by acquisitions in the US and Netherlands.
- The company achieved a solid adjusted EBITA margin of 6%, supported by productivity gains and cost initiatives.
- Rexel SA (RXEEY) posted a record free cash flow before interest and tax of EUR 335 million, representing a 53% conversion rate.
- The company's indebtedness ratio stands at 1.9x, providing ample financial flexibility.
- Digital sales continue to ramp up, reaching 31% of total sales, with Europe significantly above the group average at 43%.
- Sales in Europe were challenging, with a 4.5% decline in Q2, impacted by the electrification base effect and macroeconomic and political uncertainties.
- The company experienced a negative pricing effect of minus 1.5% in Q2, primarily due to deflation in solar panels, piping in North America, and industrial automation in China.
- Adjusted EBITDA margin in Europe decreased by 197 basis points to 6.1%, due to sales decline and higher exposure to deflationary solar activity.
- Rexel SA (RXEEY) anticipates financial expenses to rise to EUR 205 million for the full year 2024, due to increased gross debt and interest rates.
- The company remains cautious about end markets and does not expect any sequential recovery, particularly in Europe, due to ongoing economic and political uncertainties.
Good morning to everyone, and thank you for joining us today for our second quarter sales and first half results conference. As usual, I'm here today with Laurent Delabarre, our CFO. I will focus on a few highlights of our performance. Laurent will give you greater granularity on our numbers, and I'll conclude with the confirmation of our outlook for 2024 and a few considerations on the follow-up of the strategic road map we presented at our recent Capital Markets Day.
So in the first half of 2024, we evolved in challenging market conditions, especially in Europe, and I will come back to that. In this environment, we delivered what I consider a very solid performance, leveraging our transformation and the different levels that we put in place as part of our Power Up Strategy. This is captured in the five key figures that make up Slide 3.
First, our reported sales stood at EUR9.6 billion in the first half and progressed by 1.8% in Q2, a clear improvement to Q1, which was down 4.5%. And here, which is a result of our steady
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