Financial Reporting - Rexel

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Sales growth 2011 vs. 2010: Q1 Q2 Q3 Q4 Year Growth on a constant basis and same number of working days 7.3% 5.1% 7.5% 5.3% 6.2% Number of working days effect 0.9% (0.0)% (0.7)% (0.9)% (0.2)% Growth on a constant basis and actual number of working days (a) 8.2% 5.1% 6.8% 4.4% 6.0% Changes in scope effect 0.1% 0.8% 0.5% 0.3% 0.4% Foreign exchange effect 2.9% (2.1)% (1.7)% 0.6% (0.2)% Total scope and currency effects (b) 3.0% (1.4)% (1.2)% 0.9% 0.3% Effective growth (a) x (b) (1) 11.4% 3.6% 5.6% 5.4% 6.3% (1) Organic growth compounded by the scope and currency ef f ects Gross profit In 2011, gross profit amounted to €3,117.5 million, an increase of 5.8% as compared to 2010, on a reported basis. On a constant basis, adjusted gross profit increased by 6.8% and adjusted gross margin increased by 20 basis points to 24.6% of sales, mainly coming from better purchasing conditions, both in Europe and Asia-Pacific. In the fourth quarter of 2011, adjusted gross profit increased by 7.1% and adjusted gross margin increased by 60 basis points from the fourth quarter of 2010 to 24.8% on a constant basis, mainly driven by results in Europe and Asia-Pacific. Distribution & administrative expenses In 2011, on a constant basis, adjusted distribution and administrative expenses increased by 3.3%, as compared to a 6.0% increase in sales. Adjusted personnel costs increased by 4.4%, as a result of higher variable compensation. At December 31, 2011, the number of employees totaled 28,409 (on a full time equivalent basis), in line with December 31, 2010, on a constant basis. Lease and maintenance expenses declined by 2.1% in 2011, on a constant basis, reflecting the effect of branch closures. Other adjusted external expenditures increased by 5.7% on a constant basis, slightly below the percentage increase in sales. In the fourth quarter of 2011, on a constant basis, adjusted distribution and administrative expenses increased by 5.6% from the fourth quarter of 2010, while sales increased by 4.4%. This resulted mainly from higher variable compensation costs linked to the Group’s full year performance. EBITA In 2011, EBITA stood at €719.6 million, an increase of 16.8% from 2010, on a reported basis. On a constant basis, adjusted EBITA increased by 20.1% and adjusted EBITA margin improved by 70 basis points to 5.7%. This improvement resulted from higher sales and gross margin along with tight control over distribution and administrative expenses. In the fourth quarter of 2011, adjusted EBITA increased by 11.9% and adjusted EBITA margin improved by 40 basis points from the fourth quarter of 2010 to 6.2% on a constant basis. Other income and expenses In 2011, other income and expenses represented a net expense of €107.0 million, compared to €107.7 million in 2010, consisting mainly of: - €87.9 million impairment of goodwill, tangible and intangible assets due to the weaker than expected performance of the following cash-generating units: The Netherlands (€47.2 million), Spain (€20.7 million), Slovenia (€7.6 million) and New Zealand (€4.7 million), and due to €7.0 million of impairment on the assets of Hagemeyer Brands Australia, disposed of in July 2011; - €39.8 million of costs related to restructuring plans implemented in Europe (€31.2 million, mainly in Spain, in the United Kingdom and in The Netherlands), in North America (€6.3 million) and Asia-Pacific (€1.9 million, mainly in New Zealand); - €26.1 million of revenues related to the disposal of Hagemeyer Brands Australia and Kompro B.V.; 7
- €6.4 million of net revenue from the gain on disposals of commercial branches properties, principally in the United States; - €5.6 million of acquisition costs arising from completed and proposed transactions; and - €7.2 million of net expenses related to litigation with social security authorities for €4.4 million, to employee claims for €2.0 million and to VAT claims for €0.8 million. In 2010, other income and expenses had represented a net expense of €107.7 million, consisting mainly of: - €65.2 million of costs related to the restructuring plans initiated in 2009 to adapt the Group’s structure to market conditions, mainly in Europe for €48.3 million and in North America for €12.6 million; - €36.6 million of goodwill impairment relating to operations in The Netherlands (€23.5 million), New Zealand (€8.9 million) and Slovenia (€4.2 million); - €10.6 million loss related to the disposal of H.C.L. Asia and Haagtechno BV; and - €12.7 million of other income, comprised of a €3.7 million tax indemnification payment from the PPR Group under an indemnity granted to <strong>Rexel</strong> in 2005, €3.6 million stemming from the reduction of pension liabilities, €2.5 million relating to reversals of restructuring provisions in France, and €2.9 million of proceeds from disposals of building (mainly in Sweden). In the fourth quarter of 2011, other income and expenses represented a net expense of €77.0 million, compared to €64.1 million in 2010, consisting mainly of €47.1 million impairment of goodwill, tangible and intangible assets (€37.0 million in 2010), €24.6 million of restructuring costs (€25.8 million in 2010), €9.3 million costs related to litigation and €5.2 million of net revenue from the gain on disposals of commercial branches properties. Net <strong>Financial</strong> income / (expense) In 2011, net financial expense was at €191.1 million, as compared to €203.1 million in 2010, as a result of the decrease of the average indebtedness. The effective interest rate was 7.2% in 2011 and 7.1% in 2010. In the fourth quarter of 2011, the effective interest rate was 7.7%, as compared to 7.1% in the fourth quarter of 2010. The increase is due to the refinancing of the Senior Credit facilities by the €500 million Senior notes issued in May 2011, which have a longer term but a higher nominal interest rate. Share of profit/(loss) of associates In 2011, the share of profit of associates was a gain of €2.8 million, related to DPI (US consumer electronics retail distributor), compared to €4.7 million in 2010. The decrease in the share of DPI profit results from lower sales in 2011 as compared to 2010, due to more difficult market conditions in the United States. In the fourth quarter of 2011, the share of profit in DPI was €1.6 million, as compared to a €1.5 million for the same period in 2010. Tax expense The effective tax rate was 22.1% in 2011, compared to 20.5% in 2010. In 2011, the tax rate included the impact of UK tax losses carried forward indefinitely and incurred in previous periods that were recognized for the first time as a result of the Group’s ability to utilize these losses against future taxable profits. In 2010, the effective tax rate included the recognition of non-recurring French tax losses incurred in 2009. Net income Net income amounted to €319.0 million in 2011, an increase of 39.2% as compared to €229.2 million in 2010. In the fourth quarter of 2011, net income was largely stable at €60.5 million versus €61.5 million in the fourth quarter of 2010. 8
Page 1 and 2: Financial information For the year
Page 3 and 4: I. Activity report This document is
Page 5 and 6: 1.1.3 | Impact of changes in copper
Page 7: 1.2 | Comparison of financial resul
Page 11 and 12: In Southern Europe, sales amounted
Page 13 and 14: In 2011, EBITA rose to €163.7 mil
Page 15 and 16: On a constant basis, the decrease i
Page 17 and 18: 2.1.2 | Cash flow from investing ac
Page 19 and 20: 2.2 | Sources of financing of the G
Page 21 and 22: II. Consolidated financial statemen
Page 23 and 24: Consolidated Income Statement For t
Page 25 and 26: Consolidated Balance Sheet As of De
Page 27 and 28: Consolidated Statement of Changes i
Page 29 and 30: • Measurement of financial instru
Page 31 and 32: • Recognizes any benefit or defic
Page 33 and 34: to each period during the lease ter
Page 35 and 36: Impairment losses from estimated ir
Page 37 and 38: Effective interest rate The effecti
Page 39 and 40: These provisions also include costs
Page 41 and 42: ights in 2013. On October 7, 2011,
Page 43 and 44: 4. | SEGMENT REPORTING Information
Page 45 and 46: 7. | OTHER INCOME & OTHER EXPENSES
Page 47 and 48: 8. | NET FINANCIAL EXPENSES For the
Page 49 and 50: In 2011, the impact on the income t
Page 51 and 52: • Perpetuity growth rate This gro
Page 53 and 54: Impairment of property, plant and e
Page 55 and 56: As a result of the transfer to the
Page 57 and 58: 14. | SHARE CAPITAL AND PREMIUM 14.
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Under this share buy-back program,
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The fair value of Rexel’s shares
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16. | EARNINGS PER SHARE Informatio
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The change in the present value of
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19. | FINANCIAL LIABILITIES This no
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Credit Facility Commitment (in mill
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19.1.3 | Securitization programs Th
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Fair value hedge derivatives The Gr
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20.2 | Foreign exchange risk Forwar
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21. | SUMMARY OF FINANCIAL LIABILIT
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To the best of Rexel’s knowledge,
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26. | CONSOLIDATED ENTITIES AS OF D
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Head office % Interest Luxembourg R
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III. Statutory auditors’ report T
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3 Specific verification As required
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Financial Reporting - Rexel

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