Q4 and FY 2018 results February 13 th , 2019 Consolidated financial statements as of December 31, 2018 were authorized for issue by the Board of Directors held on February 12, 2019.
KEY HIGHLIGHTS: SOLID RESULTS AND MAJOR STRATEGIC ADVANCES
2018 in a nutshell 1. We are back to organic growth : +€1bn in sales over 30 months 2. Good progress to date with more to come – significant potential for profitable future growth 3. Progress in all countries on customer service / more customers / more SKUs / more digital 4. US results significantly better, with further profitable growth opportunities 5. France doing well, margin improving, growth in line with our expectations and solid outlook 6. Disposal program completed 7. Evolution of our model towards a customized value proposition through data driven approach Delivering customized experience to each customer ✓ Allowing Rexel to grow sustainably versus any competition ✓ — 3
« We have done the job » and still have more to do 1 We consolidated our geographic footprint Rexel is a more robust company 2 and will further We revamped our operating model strengthen its business model 3 We strengthened our financial structure — 4
We have been consolidating our geographic footprint Conducting turnarounds in Exiting geographies and activities Reversing US performance significant markets • Restructuring in Germany • Initial disposal plan completed, • Profitable sales growth & Spain including the recent sale of our non after years of industrial business in China and the underperformance E.g. strong market share downsizing of our UK business : of 20-30% in German local markets • Successful investments in Reduction of ~650m€ of sales service improvements • Banner network (compared to FY16) reorganization (from 5 to Positive contribution of 25bps to the • Regionalization strategy & 2) in the UK and Group’s consolidated adjusted densification (branch acceleration of branch EBITA margin (compared to FY 16) openings) closures. Adjustment to • Further active portfolio management Brexit situation. — 5
We revamped our operating model Improving business Adapting skills and Increasing multi- Reinforcing supplier model managerial model channel interactions partnerships Proven ability to deliver Management team # of connected Development of a • • • • organic growth evolutions to ensure business customers collaborative approach performance Simultaneous Cross-fertilization of • 39% of « active • management of volume ~ 30 country “deep customers » in existing best practices in dives” yearly France at end 2018 and profitability our countries vs 24% end 2016 90% of Comex renewed E.g. 40 bps adj. Ebita Take advantage of • Digital sales above €2bn • margin improvement in growth to improve 5 0% of countries’ in 2018 North America management changed profitability From supply chain focus to c. 30% same-day • Increasing endorsement of • Operational risk and • sales growth in 2016- customer satisfaction local teams timeline management 2018 E.g. NPS implemented Redefinition of selected KPIs • in USA, FR, UK, BE, NL … to monitor business Significant customer performance • service improvements E.g. Platt scorecard rolled out in all the US — 6
We strengthened our financial performance Deleveraging Streamlining Rebalancing the balance central costs Opex sheet Streamlining of central and Indebtedness ratio lowered First priority: • regional HQ costs Commercial field coverage from 3.04x to 2.67x between 2016 and 2018 Second priority: • Strengthening of digital teams — 7
The successful execution is reflected in our numbers Same day sales growth Recurring net income (€m) ( 1 ) Adj. EBITA (€m) ( 1 ) +3.5% 328 608.3 580.1 291 +3.5% 549.8 250 +12.8% +16.4% -7,1% -1.9% 2016 2017 2018 2016 2017 2018 2016 2017 2018 Deleveraging : ROCE ( 1 ) Adj. EBITA margin ( 1 ) Indebtedness ratio 7.8% 3.04x WACC 4.6% 7.5% 2.84x 4.4% 2.67x 6.3% 4.2% 2016 2017 2018 2016 2017 2018 2016 2017 2018 1 on actual basis — 8
FY 2018 achievements Sales Adj. EBITA Recurring net income 13,366 608.3 +12.8% € million € million vs. FY 17 +6.1% (1) vs FY 17 at €328.1m +3.5% on same-day basis Indebtedness ratio Gross Margin Adj. EBITA margin 2.67x 24.7% 4.6 % -3bps ( 1 ) vs. FY 17 17bps improvement +10bps (1) 1 on a comparable basis — 9
Q4 Highlights: Sales growth for the 9 th consecutive Sales quarter and solid recurring net income 3 , 497 € million • Same-day sales growth of +1.9% in Q4 18: with a negative copper contribution of -0.3% vs +1.6% in Q4 17 Gross margin despite the effect of the transformation in Germany and Spain 24.7 % stable • Recurring net income up 9.7% in the quarter • Confirmation of the return to sustainable and profitable growth in the Adj. EBITA growth vs. Q4 17 US after years of underperformance +8.9 % at €173m • German transformation completed, business positioned on more profitable segments; UK restructuring advancing Adj. EBITA margin • Sale of our retail & virtually all our commercial business in China 5.0 % +27bps — 10
GROUP FINANCIAL REVIEW
FY 18 sales : Up +3.5% on a same-day basis and +0.5% on a reported basis On a constant & same-day basis 3.4% +0.5% reported sales 1.9% 5.1% €13,366m €13,303m 5.4% 3.9% 5.2% +0.3% 2.8% €12,877m - 2.5% 0.6% -0.7% +3.5% Q1 Q2 Q3 Q4 2017 2018 Actual-day growth 9 quarters of sales growth on a constant & +3.8% same-day basis despite an increasingly challenging comparable base over the year and a lower contribution from copper Copper cable price contribution Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 +1.2% +1.1% +1.5% +1.6% +0.8% +0.7% +0.3% -0.3% FY 2017 Forex Scope FY 2017 Organic Calendar FY 2018 Same-day Restated 1 comparable FY 2017 : +1.4% FY 2018 : +0.4% 1 Restated for IFRS 9 & 15 — 12
Same-day sales growth of 1.9% in Q4, supported by North America 9 % 36 % 55 % OF GROUP OF GROUP OF GROUP FY FY FY SALES SALES SALES + 6.1 % Q4 +5.2 % Q4 +1.7 % Q4 -0.1% +6.9% -0.8% c. +€384m Organic c. +€377m c. +€136m growth 2018 2018 2018 contribution over 2 years 2016 2016 2016 Organic growth since December 2016 brought an additional c. 900m€ of sales — 13
Q4 Europe: Resilient sales; restructuring on track Constant Sales 1,902.2 € million -0.8 % 55 % OF GROUP SALES & same-day Excluding branch closures in Germany & Spain, same-day sale growth in Europe is 1.2% • Sales in France were down 1.3%, on a challenging base effect, lower export project • Q4 18 WEIGHT business and a temporary impact from lower activity in December. Business was vs. Q4 17 1 supported by good demand in residential and industrial markets. France 38% -1.3% Positive trends in most key countries including Switzerland, Benelux, Scandinavia • In Germany, drop in sales from transformation, further upside from new positioning • Scandinavia 14% +5.2% excluding the closure of 17 branches, broadly stable sales with positive trends in metals industry UK 10% -6.4% UK sales dropped by 6.4%, mainly due to increased impact from lower business with 6 • Benelux 10% +13.0% large C&I accounts (-2.0% impact) and 33 branch closures (-1.4% impact). Germany 9% -15.9% Switzerland 6% +6.9% — 14 1 Same-day change
In Germany, Spain and UK, we are moving to a more profitable business model Spain United Kingdom Germany • Rationalization completed • Moving to a regional logistics • Adjustment to Brexit organization situation, with focus on Headcount reduction of c. 25% margin driven business and Closure of 17 loss-making branches New management in place ongoing cost management and 2 Distribution Centers (out of 5) Closure & merger of 16 branches Cost base adaptation at 33 branch closures headquarters New organization around 5 regions • Strong market share of 20%-30% in 4 Hub & Spoke to be local markets in which we are implemented progressively in active 2019 • Estimated 2019 impact on sales (in Q1-Q3 19): c. - €120m vs 2018 — 15
North America: Continued strong growth, driven by new Q4 regional approach and investments Sales Constant Q4 18 1,280.8 € million +6.9 % 36 % WEIGHT vs. Q4 17 1 OF GROUP USA 79% +8.5% SALES & same-day Canada 21% +1.3% USA: Sales grew in high single digits for the third consecutive quarter, confirming our regained ability to • capture market growth and gain market share in specific regions Changed business approach with the regionalization strategy Strong double-digit growth in electrical distribution business in key regions : Denver area, California, Texas and Florida offsetting lower growth in the eastern part of the country. Residential & commercial up in the high single digits; industrial up in double digits, including Oil &Gas C. 3,600 additional active customers in the last 12 months Investment in sales reps, branch openings and refresh of existing branches 48 new branches/counters since 2017 Branch openings : Impact of 2.4% in Q4 18 and c. 2% in FY 2018, in line with objectives Canada : • Driven by industrial end-market, notably mining potash (1.7% contribution) offsetting the non-renewal of a large wind project executed in Q4 2017 (impact c.+1%) — 16 1 Same-day change
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