Rexel (RXLSF.PK), a French distributor of electrical supplies, reported sales of 4.76 billion euros in the third-quarter of 2024 up 2.1% on a reported basis. On a constant and same-day basis, quarterly sales were down 2.1% or 0.7% on a constant and actual-day basis.
Rexel lowered its full-year 2024 guidance to reflect a more challenging trading environment over the summer, notably resulting from a more difficult macroeconomic environment in Europe; further deterioration of electrification categories, especially solar.
Rexel now anticipates full-year 2024 same-day sales to be between -2.5% and -2.0%, reflecting stable trends in North America and a mid-single-digit decline in Europe. This contrasts with their previous indication of low-end stable to slightly positive same-day sales growth for fiscal year 2024.
Rexel now anticipates an adjusted EBITA margin of approximately 5.9% for full-year 2024, down from the previous indication of the low end of the initial guidance range of 6.3% to 6.6%. Rapid cost reduction actions are partially mitigating the effects of volume drops and gross margin pressure.
Rexel said it is taking resolute actions to maintain profitability, having operated in "plan B" mode since the beginning of 2024. This includes implementing headcount controls and reducing overhead, travel, and expenses. The company is aggressively managing workforce evolution to make it entirely variable with respect to volume, resulting in a reduction of 437 full-time equivalents (FTE) compared to the end of third quarter 2023. Additional actions are expected to further increase this figure by the end of the year.
Rexel is accelerating its strategic transformation action plans globally and seizing opportunities to further enhance operational efficiency. These initiatives are expected to yield annualized structural savings of approximately 45 million euros by the end of 2025. Key actions include restructuring the logistics organization, such as closing a distribution center in Germany following the inauguration of a new automated distribution center in Frankfurt in 2023. Additionally, there are changes to the sales force organization, particularly in Austria, along with several ongoing initiatives aimed at optimizing back-office operations.
Rexel's medium-term ambitions remain unchanged, bolstered by the acceleration of its Power Up strategic plan and an improved economic environment due to lower interest rates in Europe and the U.S. The company anticipates a sales growth potential of between 5% and 8%, with targeted mergers and acquisitions contributing an additional 2% to 3%. Furthermore, Rexel aims for an adjusted EBITA margin exceeding 7% and expects high-single-digit growth in earnings per share.
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