(News Bulletin 247) – The electrical equipment distributor brought together analysts and investors this Friday for a day dedicated to the presentation of its new strategic plan “Powering Up Rexel”.

While its 2022-2025 strategic plan “Power Up 2025” is well underway, Rexel presented this Friday an update of its strategic roadmap during a day dedicated to investors.

The electrical equipment distributor has thus unveiled its new business plan “Powering Up Rexel”. The group formalizes its ambitions by delivering “medium term” targets – the horizon is not specified but Oddo BHF assumes that it is 2027 or 2028 – which should allow it to “reach a new level” .

The distributor of electrical equipment intends to achieve an average annual growth rate of its turnover of between 5% and 8% (a figure which includes an impact of 2% to 3% from future acquisitions), accompanied by a margin rate of Ebita (operating profit restated for certain elements) greater than 7% by 2025 (compared to 6.8% in 2023). Growth in net earnings per share is expected between 7% and 9% (“high-single digit”).

Balanced capital allocation

To achieve these objectives, the group will rely on a balanced capital allocation with annual expenses growing at the same rate or at a lower level than turnover growth and targeted acquisitions which can bring between 2% and 3% turnover. additional business.

“The capital allocation presented (dividend, acquisitions and share repurchase) seems balanced to us, as does the group’s desire to maintain a net debt ratio of two times”, assesses Oddo BHF in a note published this Friday morning .

Shareholders are also stakeholders in Rexel’s ambitions. The group plans an envelope of 50 to 150 million euros per year to buy back part of its shares and to distribute in the form of dividend the equivalent of at least 40% of recurring net profit.

Rexel will rely on the benefits derived from its previous strategic plan “Power Up 25” announced two years ago to “take advantage of the opportunities offered by the growth of electrification”.

Automation and robots

Rexel aims to achieve 40% of its turnover in so-called “acceleration” activities (such as the energy transition) in the medium term (compared to 32% currently). The group plans to achieve this objective through both organic growth and disciplined acquisitions, as well as continued investments to develop the North American platform.

On a strategic level, the company is focusing in particular on digital, and intends to ultimately achieve 50% of its sales via “digital”, compared to 28% in 2023 “and reach at least 15 automated distribution centers and 500 robots in its chain supply (compared to 10 automated distribution centers and 325 robots today)”.

“From a more global point of view, the consensus (3.1% to 3.4%) is a little below the mid-range targeted by the group (4%) in organic growth in turnover and idem on the margin. But we believe that the acquisitions will improve the mix (the distribution of sales towards more expensive and better-margined models, editor’s note) and therefore the margin,” says Oddo BHF.

The financial intermediary considers these objectives “encouraging in the medium term” and reflect “a successful strategy so far of focusing on digital and electrification”.

On the Paris Stock Exchange, the new medium-term roadmap presented by Rexel leaves the market indifferent. The title lost another 0.2% to 27.04 euros, after having fallen by 3.4% in the first exchanges. These profit-taking should be put into perspective since the stock has gained 9.3% since the start of the year, and even more than 34% over one year.