Message from Guillaume Texier, Chief Executive Officer of Rexel

2021 was a historic year for Rexel, a performance that was all the more remarkable as the Group still had to contend with the persistent effects of the Covid-19 pandemic and disruptions such as the resurgence of inflation or shortages of raw materials or products. Consider a few figures, each showing an unprecedented performance:

• Revenue reached €14.7 billion, an all-time high, growing same-day basis by 15.6%, the highest annual growth rate ever achieved. Admittedly, this growth starts from a 2020 base impacted by the slowdown due to the pandemic, but over two years, sales grew by an average of 3.7%, a rate that had not been reached for a decade.

• Our adjusted EBITDA margin was 6.2%, the highest profitability since our IPO. On a normalized basis, eliminating non-recurring effects, the margin remained very strong at 5.8%.

• Our cash flow before interest and taxes amounted to a record €681 million, with an EBITDA conversion rate of 65.7%.

• Our indebtedness ratio was at a historically low level of 1.37 times EBITDA after rent payments, allowing the Group to regain financial leeway to accelerate acquisitions, as we did recently with the acquisition of Mayer, which significantly strengthens us in the United States.

• And finally, thanks to a 107% increase in our Recurring Net Income to €575 million, we posted historically high Net Earnings per Share of €1.89, allowing us to propose for shareholder approval at our Annual General Meeting a record dividend of €0.75 per share, paid entirely in cash.

This performance exceeds the objectives that the Group had set for 2021 and puts us one year ahead of plan on most of our medium-term objectives. I would like to pay tribute to my predecessor, Patrick Berard, who was able not only to put Rexel back in marching order, allowing it to navigate unforeseen headwinds, but also to build a solid foundation to build tomorrow’s growth.

These results are indeed the result of the profound transformation that Rexel has carried out over the past five years to go beyond its traditional activity as a distributor of electrical equipment and become a service and solutions company, driven by digital and data.

It is now up to us to deepen and accelerate this movement to enable us to seize the many opportunities that lie ahead. Rexel is indeed at the heart of a huge societal challenge: that of decarbonization through electrification. The whole world is engaged in a race to reduce carbon emissions, and this necessarily involves increased electrification in residential, mobility and industry. In the next 20 years, the share of electricity in final energy consumption will double. And Rexel is ideally positioned to benefit from this promising trend.
In this context, our strategic roadmap is structured around three major pillars on which we intend to be leaders:

An acceleration of digitization

Digital is already a reality at Rexel. In 2021, digital accounted for nearly €3.5 billion of our revenue, almost a quarter of the total, with a rate of 35% in Europe.

Much more than a simple change of sales channels or the adoption of tools to track orders, digitization is a paradigm shift that runs across our entire organization. Some examples: in France, we have set up in our 450 agencies an inventory management tool assisted by artificial intelligence to offer an adapted assortment, coupled with a predictive model to anticipate the future purchases of each branch’s customers. To reduce the rate of customer attrition, or “churn”, an alert system, operational in several European countries, identifies customers at risk so that sales representatives can react, and other tools created during the pandemic have been perpetuated, such as rebound alerts, which make it possible to identify customers whose activity is resuming faster than the average of their sector or who, on the contrary, underperform. The latest innovation to date, currently being deployed, is the Supplier Portal, a data analytics service dedicated to suppliers, allowing them to evaluate their performance by type of customer, product or transactional channel and according to a benchmark index.

A rise in services and solutions

The services offered by Rexel today represent a strategic dimension of its development, to support all our customers and in particular in the new high-growth markets linked to the energy transition. The enrichment of green solutions & services, new mobility, storage, self-consumption and energy management are indeed key issues in the intelligence of buildings, networks and infrastructures, in which Rexel develops skills and invests significantly to support its customers. A recent example of this is Rexel’s 2021 acquisition of Freshmile Services, an operator of charging stations for electric vehicles. Freshmile operates more than 8,000 charging points and provides services to more than 50,000 electric vehicle drivers, providing access to 100,000 roaming charging points across Europe. Rexel thus consolidates its position as a reference player in the world of solutions dedicated to energy professionals by integrating Freshmile’s software and services offering to capture development opportunities in the growing activity of electric mobility.

A strong ESG commitment

Rexel is already a best-in-class player in ESG, being the only B2B distributor with objectives validated by the Science Based Target Initiative for the reduction of its CO2 emissions, both for its own operations (scopes 1 and 2) and for those of its partners (scope 3). Rexel went one step further last year by launching two Sustainability-Linked Bond issues, linking all its long-term financing (€1 billion) to sustainable development goals. But we will have to do even more in the future, including helping our suppliers and customers make their operations greener. This is what we have done with the launch of an innovative service model, in Saint-Ouen, on the outskirts of Paris, where we offer through a digital branch and a robotized platform the largest stock of electrical equipment and climate engineering in the Île-de-France region, with more than 20,000 SKUs. These can be delivered in two hours by a fleet of electric vehicles or bicycles, reducing CO2 emissions on deliveries by 30%. Combining service and ESG, that’s the future of Rexel!

The environment in which we operate in 2022 will undoubtedly be buoyant, but it should also continue to be marked by disruptions. The geopolitical and health situation remains uncertain, inflation will persist, and shortages of products and labor will remain. But Rexel is perfectly equipped to help its customers cope. We expect same-day sales growth of between 4% and 6% for 2022, an adjusted EBITA margin of more than 6% and a free cash flow conversion of more than 60%. The new strategic roadmap we will unveil in June will be ambitious and will enable Rexel to seize the many opportunities that lie ahead to continue its growth trajectory and create value for all its stakeholders.

Over the past few months, I have been able to measure the strength and robustness of the Group’s business model, the tremendous commitment of its teams and the relevance of its strategic choices, which position Rexel at the heart of the energy transition and the electrification revolution that is emerging before our eyes. All this can only make us extremely confident in the Group’s prospects, as it is ideally positioned for the future.