RXLSF - Rexel S.A. (RXLSF) Q1 2024 Earnings Call Transcript

2024-04-30 16:11:09 ET

Rexel S.A. (RXLSF)

Q1 2024 Results Conference Call

April 30, 2024 02:00 AM ET

Company Participants

Guillaume Texier - Group Chief Executive Officer

Laurent Delabarre - Group Chief Financial Officer

Conference Call Participants

Martin Wilkie - Citi

Akash Gupta - JPMorgan

Daniela Costa - Goldman Sachs

Philip Buller - Berenberg

Alexander Virgo - Bank of America

William Mackie - Kepler Cheuvreux

Andre Kukhnin - UBS

Eric Lemarie - CIC

Miguel Borrega - BNP Paribas

Presentation

Guillaume Texier

Good morning to everyone, and thank you for joining us today for our First Quarter 2024 Sales Conference. Thank you also for making yourselves available earlier than usual. In addition to issuing our Q1 sales numbers today, we are also hosting our Annual General Meeting this morning. So we moved up our call a bit. 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. So let's begin on Slide 3 with the main highlights of our first quarter 2024 performance. So in the first three months of 2024, Rexel delivered a solid top line performance with all growth components very much in line with what we had guided to in February. We will talk in more detail during the presentation about the electrification base effect as well as the commodities pricing effect.

But what is very interesting is that beyond those 2 short-term elements, the underlying ED core business is holding up well with positive pricing overall, positive volume in North America and good order intake as illustrated by the backlog. Residential new construction and also to some extent, renovation are difficult, especially in Europe, but we see strength in nonresidential and also in industrial automation. As the year progresses, we should see improving sequential figures with the base effect easing and market trends improving. I am also happy that the transformation of Rexel is delivering. We can see it in the market share gains that we have posted in many important countries.

Our unique combination of value-added services and engaged teams is really making a difference. We can see it also in our digital progression, which continues steadily and which also helps make the difference. We can see it in the implementation of our M&A strategy, which continues to help us position the group on faster growing and more resilient segments, in this case, data comm and security in France with the acquisition of Itesa.

Last but not least, the transformation is at play also in the way our teams react internally to a less favorable environment than in previous years to protect our margin and adapt our cost base while still delivering great service to our customers. This is what allows us to confirm our guidance for the year both in top line and in profitability. Moving to Slide 4. The 4.6% overall sales decrease breaks down into a 1.5% decrease in price and a 3.1% decrease in volume, and it's interesting to drill down into the details of the components of the figure. So if we go deeper in terms of granularity, as shown on the chart, our core ED business, representing 63% of our mix held up well.

Same-day sales were down a limited 0.8%. The performance in core ED was driven by a positive pricing contribution of 0.7% while volumes were down by a limited 1.5% despite the weakness in residential, as I mentioned. And if we zoom specifically on North America, the core ED figure would be 2.4% -- a positive 2.4% with both price and volume contributing with non-residential, particularly strong. Volume overall were also positive on cable, which accounts for 15% of our mix, rising by 1.2% while pricing in that segment was down 9.4%, resulting in an overall same-day sales drop of 8.2% on cable. Electrification categories representing 22% of our sales, went down 11.7% in the quarter....

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