Q4 and FY 2019 results February 13 th , 2020 Consolidated financial statements as of December 31, 2019 were authorized for issue by the Board of Directors held on February 12, 2020.
2019 : THIRD SUCCESSIVE YEAR OF SOLID RESULTS, IN LINE WITH PLAN
2019 achievements in a nutshell 2019 guidance achieved in a volatile year: The trade war had unexpected effects, ranging from margin squeeze to rapid decrease in industrial ✓ demand in many geographies, including the US and Germany Brexit-related issues contributed to a subdued environment ✓ The inflection in business model initiated in 2017, focusing on our organic development, has translated into further sales growth outperformance, earnings growth and value creation More than €1.0bn organic sales since December 2016. Three successive years of sales growth for the ✓ first time since 2008 Double-digit growth in EPS 1 since 2016 (CAGR) ✓ ROCE above the WACC for the first time since 2014 ✓ Continued improvement in indebtedness ratio ✓ Ability to generate strong free cash flow FCF conversion at 62.5% (in % of EBITDAaL²) after 2 years of investments in inventories (mainly in the ✓ US) and restructurings in turnaround countries Rexel is increasingly data-driven and our 2018-2019 digital investments are paying off Active portfolio management: Agreement to dispose of Gexpro Services in the US signed end December. 1 EPS based on Recurring Net Income, ² EBITDA after leases — 3
FY 2019 guidance achieved Sales Adj. EBITA Recurring net income 13,742 685.1 +7.5% € million € million vs. FY 18 +5.1% (1) vs FY 18 at €341.2m +1.4% on same-day basis Indebtedness ratio Gross Margin Adj. EBITA margin 2.47 x (²) 25.0% 5.0 % +36bps ( 1 ) vs. FY 18 +18bps (1) 20bps improvement — 4 1 on a comparable basis 2 before expected proceed from Gexpro services
Three years of successful execution Same-day sales growth Recurring net income (€m) ( 1 ) Adj. EBITA (€m) ( 1 ) +1.4% 685.1 +3.5% 640.7 ( 2 ) 341 328 291 317 ( 2 ) +3.5% 250 +7.5% 608.3 580.1 549.8 +12.8% +16.4% -7.1% -1.9% 2016 2017 2018 2019 2016 2017 2018 2019 2019 2016 2017 2018 Indebtedness ratio ROCE ( 1 ) Adj. EBITA margin ( 1 ) 8.2% 3.04x 5.0% WACC 7.8% 2.84x 4.8% (2) 2.67x 7.5% 6.3% 2.47x 4.6% 4.4% 4.2% 2016 2017 2018 2019 2016 2017 2018 2019 2016 2017 2018 2019 — 5 (1) Pre IFRS 16 /on actual basis (2) Post IFRS 16
“Perform”: A leaner, more agile organization People adaptation in the US $15m annualized savings Continued focus on productivity initiatives benefited 2019 • Cost adaptation to offset industry slowdown in the US Salary & Benefits productivity gain in the US : c.$15m Logistics : Improved Line/Man/Day Efficiency of processes: Lower product returns, claims, inventory obsolescence, override Sweden Canada 108 (+6) 137 (+10) Increased logistics productivity Leaner back office End-to-end solution: Email to EDI Process automation in China : Email to EDI 8 robots working in the back-office organization (Finance or 40 legal : Customer screening, credit management, customers) FTE redeployed to front-office positions — 6
Enhanced customer focus through roll-out of NPS across the group 2018 2019 2016 2020 Systematic and No NPS Initial Full-fledged ongoing NPS measurement NPS measurement measurement measurement Moderate sampling Customers not regularly With internal feedback Extended sampling surveyed and tailor-made answers per market Simple question: BtoC standard incorporated • “How likely is it that you in Rexel would recommend Rexel? ” Real-time survey • • Better understanding of our customer behaviors ~ Live in all 26 countries ~ Live in 18 countries ~ Live in 12 countries ➢ Greater customer stickiness ➢ Improved NPS driving lower non-quality cost (fewer credit notes and returns, lower — 7 transportation costs)
“Transform:” Positive initial results from digital transformation 1 digital order every second in Europe every 30 seconds in the US 41% c. 18% Proportion of digital sales for a French Group digital sales connected customer 26% in Europe (up 800bps in a year) €2.4bn 42 +22% Order lines picked up Web sales growth by customer to a European Digital Sales in North America vs LY branch each minute in 2019 70% Up 12.9% €30 m of European sales followed Annualized run rate of revenues “saved” by track and trace with “customer churn” solution c. 73k+ orders digitalized 2 digital hubs 40FTE reallocated in France and US 150+ data & digital experts Live customer Email to EDI — 8
GROUP FINANCIAL REVIEW
FY 19 sales: Another year of organic growth More than €1bn additional organic sales in 3 years +2.8% reported sales 13,742 +1.4% -0.0% +1.8% -0.4% 13,554 2019 2019 2019 +€582m +€350m +€116m Actual-day growth 13,366 2017 2017 2017 +1.4% FY 2018 Forex Scope FY 2018 Organic Calendar FY 2019 same day comparable Same-day sales growth 2019 in line with guidance : +1.4% or +2.4% restated for branch closures in Germany & Spain — 10
Same-day sales evolution of -0.5% in Q4, mainly due to lower industrial demand in key geographies, on challenging base effect 9 % 37 % 54 % OF GROUP OF GROUP OF GROUP Q4 Q4 Q4 SALES SALES SALES +0.3 % -1.8 % +0.3 % FY FY FY +3.9% -0.2% +1.2% +5.4% +5.2% +5.1% +3.9% +3.4% +3.1% +2.8% +2.4% +1.9% +0.9% +0.6% +0.0% -0.5% -1.4% -2.3% -3.7% — 11 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19
Europe: Resilient sales fueled by France Q4 Constant Sales 1,905.8 € million +0.3 % 54 % OF GROUP SALES & same-day Q4 19 Sales in France were up 4.6%. Q4 benefited from positive momentum in large • WEIGHT vs. Q4 18 1 recurring project wins, digital adoption and good HVAC sales, resulting in market share gains in Q4 and in 2019 France 39% +4.6% Increased efficiency resulting in higher customer satisfaction (NPS improvement) Scandinavia 13% -2.5% Continued evolution towards a data-driven company : 18.8% digital sales in Q4 19 (from 14.5% in Q4 18), implementation of analytics and IoT (Energeasyconnect: 10,000 units sold in 2019- installed base 25,000), first AI use Benelux 10% +3.0% cases UK 9% -7.4% UK sales dropped by 7.4% partly reflecting market deterioration, but also customer • selectivity (-4.2%) and 11 branch closures in Q4 19 (-1.6%) Germany 8% -7.0% Sales in Germany down 7.0% due to lower industrial demand. Activity should benefit • from leaner organization, better service configuration and customer base expansion Switzerland 7% -0.4% — 12 1 Same-day change
North America: Slowdown in industry in US; investments in Q4 proximity model paying off Sales Constant Q4 19 1,314.0 € million -1.8 % 37 % WEIGHT vs. Q4 18 1 OF GROUP USA 78% -2.7% SALES & same-day Canada 22% +1.8% USA: • Same-day sales decrease impacted by industrial and commercial end-markets Industrial business down in mid-single digit, with O&G down 10%. Commercial projects activity is down in low-single digit Light commercial / Residential: Investment in inventories, branch openings and refresh of existing branches, sales reps Residential is up in high-single digit benefiting from our initiatives, including 57 branch openings in 2017/2019 Branch openings : Impact of 1.1% in Q4 19 and c. 1.2% in FY 2019, in line with objectives. Refocusing on our core Electrical Distribution business: Agreement signed with LKCM Headwater for the disposal of Gexpro Services (400 employees, c.260MUSD of sales) Canada : • Driven by positive sales growth with large commercial contractors and industrial customers — 13 1 Same-day change
Contrasting performance across regions, with strong momentum in non- industrial regions Northwest Midwest 27% 12% 9% Northeast 7% 11% California 10% Southeast 14% 11% X% % of ED sales in US Mountain Plains Florida Same-day sales trend in Q4 Gulf Central Good momentum in electrical distribution business in Northwest and California; — 14 slowdown in Florida and Midwest mainly driven by lower industrial demand
Asia-Pacific: Contrasting performance impacted by lower Q4 project activity Sales Constant Q4 19 WEIGHT 300.8 € million +0.3 % 9% vs. Q4 18 1 Pacific 50% +3.3% OF GROUP SALES Asia 50% -2.5% & same-day Asia-Pacific is up +0.3% or 3.2% restated for a large project in the Middle East that boosted our Q4 2018 • performance Pacific : • Sales were up 5.9% in Australia, with an outperformance in residential market, which remains under pressure, and good momentum in industrial EPC Sales were down 7.6% in New Zealand mainly due to industrial and commercial markets (notably agriculture) Asia: -2.5% same day sales growth in Q4 19 or +3.2% restated for large project in Middle East • Sales up 1.2% in China, despite slightly lower business than last year from a large project (-1.0% contribution to China) and a more challenging environment India up in double digits, driven by strong automation activity, offsetting negative contribution from a large project in the Middle East that contributed to Q4 2018 (-5.7% contribution to Asia growth) — 15 1 Same-day change
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