Electrical supplies distributor Rexel has signed a fiscal year 2019 solid, in line with its objectives, despite a slowdown in the fourth quarter, and will be a priority in 2020 on the profitability in an environment expected “more difficult”. The net income in 2019, an increase of 50% compared to fiscal year 2018, to 203,8 million euros, boosted in particular by the North America, the development of online sales and improving profitability. The sales amounted to 13.7 billion euro, up 2.8%, and increase of 1.4% in comparable data and number of days constant.
The year 2019 marks the third consecutive year of robust results,” commented managing director Patrick Berard, quoted in a press release, while the group has been leading since 2017 a major restructuring with the development of its network in the United States and sale online.
Confronted to an environment that is more volatile” in 2019, the group is used to “protect (his) profitability without compromising (its) transformation to digital,” said Patrick Berard. The Paris Bourse welcomed the publication: to 09h59, the title Rexel jumped 10.02% to 12,74 euros, in a market with a decline of 0.28%. Rexel has achieved its objective of improving its operating profit adjusted Ebita, up from 5.1% in range of target (between 5% and 7%) 685.1 million euros. The group has also achieved its objective of organic growth in sales, excluding the negative impact of 1% of the branch closures in Spain and Germany. Sales in 2019, and the recurring net income are slightly lower than the consensus established by the financial agency Bloomberg.
Patrick Berard has remarked on the growth in online sales, to € 2.4 billion, or 18% of total sales, and even 26% in Europe. The evolution of the transformation to digital will remain the order of the day. After 12 consecutive quarters of organic growth, sales fell 0.5% in the comparable quarter in the fourth quarter, to 3.5 billion euros.
More difficult environment
Europe, which weighs a little more than half of sales, was up 0.3% on the last quarter, driven by France ( 4.6 per cent) while the United Kingdom and Germany have stalled. North America ended the year on a decline of 1.8% on a lfl basis, held back by a slowdown in industrial and commercial projects in the United States. Rexel has opened 57 branches in the country over the period 2017-2019.
The director general assured that the group was “prepared to face a macro-economic environment more difficult by the year 2020”, taking advantage of its regional reorganization in the United States and its transformation to a company more digital. In its outlook for the year, Rexel table on “an environment of low growth of sales” and remember that it will have an effect comparison high in the first half. In this context, the group will be the priority in 2020 to the further improvement of its profitability: it will be a growth in its operating profit adjusted Ebita of between 2% and 5%, at constant scope and constant exchange.
Asked during a conference call, Patrick Berard has been estimated that it was “too early” to estimate the impact of the outbreak of the new coronavirus in China. The group focused on an automated industrial production in China, which represents 4% of its total sales, he said. Rexel employs 750 employees, who have not been reached by the epidemic, and a very limited number of people live in the region of Wuhan, he added. The resumption of work after the chinese New Year, is being carried out gradually and now 60% to 70% of the workforce had returned to work, was detailed by Mr. Berard.