Rexel Q1 2025 presentation: Sales return to growth after five-quarter decline

Published 29/04/2025, 10:44
Rexel Q1 2025 presentation: Sales return to growth after five-quarter decline

Introduction & Market Context

Rexel (EPA:RXL) reported a return to positive sales growth in its first quarter of 2025, ending a streak of five consecutive declining quarters. The electrical supplies distributor presented its Q1 2025 results on April 29, highlighting a 1.4% increase in same-day sales, primarily driven by strong performance in North America while Europe showed signs of improvement.

The company’s results come amid an uncertain global economic environment, particularly regarding potential impacts from US tariffs. Despite these challenges, Rexel has maintained its full-year 2025 guidance and continues to execute its strategic capital allocation plan.

Quarterly Performance Highlights

Rexel reported Q1 2025 sales of €4.825 million, representing a 2.5% increase on a reported basis compared to €4.707 million in Q1 2024. This growth was supported by a combination of factors, including a 1.4% increase in organic same-day sales, a 1.9% positive contribution from acquisitions, and a 1.0% favorable forex impact. These gains were partially offset by a negative 1.8% calendar effect, which included the impact of 2024 being a leap year.

The company’s digital transformation continues to show progress, with digital sales now representing 33% of total sales, an increase of 241 basis points. Pricing contributed 80 basis points to overall sales growth, with improved conditions across all geographies and sequential improvement in solar pricing.

As shown in the following chart breaking down the components of Rexel’s sales growth:

Geographically, Rexel’s performance showed sequential improvement across all regions, though with significant variations:

  • Europe (50% of group sales): Returned to positive territory in France with market share gains; Nordics broadly stable; DACH region back to breakeven; Benelux showing recovery signs in non-residential; UK impacted by turnaround measures
  • North America (45% of group sales): The main growth engine with positive performance across all three end-markets in the US; strong momentum in Southeast and Northeast regions
  • Asia-Pacific (5% of group sales): Limited contribution to overall results

North America’s strong performance is particularly noteworthy, as illustrated in the following analysis:

A key indicator of future performance is the company’s backlog, which showed significant strength in North America. The backlog increased approximately 6% in the US compared to the end of December 2024, while remaining stable in Canada, reflecting robust order intake and strong project activity.

The following chart illustrates the backlog trend in both markets:

Strategic Initiatives

Rexel continues to actively manage its portfolio, focusing on strategic acquisitions while divesting underperforming assets. The company recently acquired Schwing Electrical Supply, which generated approximately $70 million in sales in FY 2024 and employs around 100 full-time employees. This acquisition strengthens Rexel’s footprint in the US Northeast region.

Simultaneously, the company divested its Finland operations, which generated €254 million in FY 2024 sales and employed approximately 300 people. The decision was based on the operation’s subscale status and lower profitability compared to group standards.

The company also highlighted its solid financial position with no short-term refinancing needs, an important advantage in the current uncertain credit environment. Rexel’s debt maturity profile is well-structured, with bonds maturing in 2028 and 2030, providing financial flexibility to pursue its strategic initiatives.

Forward Outlook

Rexel is closely monitoring the potential impacts of US tariffs, which could have both positive and negative effects on its business. The company has identified several potential tailwinds, including additional pricing contributing to sales growth and US re-shoring initiatives, as well as headwinds such as negative macroeconomic impacts in US trade partner countries and potential pressure on margins.

The following table details Rexel’s assessment of potential tariff impacts:

Despite these uncertainties, Rexel has confirmed its full-year 2025 guidance, expecting:

  • Same-day sales growth to be stable to slightly positive, with continued weak demand in Europe offset by stronger performance in North America
  • Current adjusted EBITA margin of approximately 6%, with the "inflation gap" offset by the full effect of 2024 cost savings and additional 2025 initiatives
  • Free cash flow conversion of approximately 65%, excluding the €124 million fine from the French Competition Authority paid in April 2025

As shown in the company’s guidance slide:

Strategic Initiatives

Rexel remains committed to its mid-term goals, focusing on operational excellence and enhancing client impact through value-added services. The company is investing in a best-in-class tech-driven supply chain, doubling down on AI and data capabilities, and pursuing omnichannel excellence.

The company’s strategic roadmap emphasizes:

Rexel’s management expressed confidence in the company’s ability to navigate the current uncertain environment while continuing to execute its AXELERATE 2028 strategic plan. The return to positive sales growth in Q1 2025 represents an important milestone in this journey, though challenges remain, particularly in the European market and regarding potential tariff impacts.

As the company moves forward in 2025, its focus on operational excellence, strategic portfolio management, and digital transformation will be key to maintaining momentum and achieving its mid-term financial targets.

Full presentation:

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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