2008 Registration Document - Rexel

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14. Financial information concerning the assets andliabilities, financial position and profits and lossesof RexelChange in consolidation scope in 2008Distribution networks and banners relate to assets acquiredthrough the combination with of Hagemeyer (see note 3.1).Software and other intangible assets include: (i) customerrelationships with key Hagemeyer and Sonepar Swedenindustrial customers for €52.0 million with useful lifebetween five and ten years, (ii) distribution agreementsrelating to the ACE division business for €19.2 million withan average useful life of six years and (iii) softwares acquiredin the normal course of business.GoodwillGoodwill arising in a business combination represents futureeconomic benefits arising from assets that are not capableof being identified individually according to IFRS, such asmarket shares; the assembled work force and the potentialto develop existing businesses. In the wholesale business,such synergies notably include those expected in terms ofpurchasing, logistics, network density and administration.Goodwill is allocated by country based on the value in usedetermined in accordance with note 2.7. Goodwill arising onHagemeyer acquisition, determined on provisional basis atDecember 31, 2008, was allocated, for impairment testingpurposes, to the reporting segment Europe which benefitsfrom the synergies of the acquired business.Cash flow projections used to calculate the value-inuseof each cash-generating unit are based on the threeyear financial budget reviewed by Senior Managementin December 2008 and extrapolated over a period of fiveyears after taking into account a terminal value.The calculation of value-in-use of cash generating unitsis sensitive to the discount rate and the perpetual growthrate to extrapolate cash flows beyond the horizon ofprojections.The discount rate applied was determined on the basis ofthe weighted average cost of capital after tax calculated foreach country. The weighted average cost of capital reflectsthe time value of the money and the risk specific to theasset for which cash flow projections have not already beenadjusted, considering the financial structure and conditionsof an average market participant.A single perpetual growth rate of 2.0% was used to calculatethe terminal value, without any change compared to 2007.This rate extrapolates the expected long-term inflation onmature markets.The following discount rates were used to assess the valuein-use:2008 2007Europe 7.2% to 12.2% 6.2% to 11.0%North America 7.4% to 7.6% 7.3% to 7.9%Asia-Pacific 8.4% to 10.2% 7.8% to 9.5%This resulted in an impairment loss of €85.0 million (€8.2in 2007) due to global economic and market downturnoccurred in 2008.Sensitivity analysisAs of December 31, 2008, discount rates up 50 basis pointswould result in an €69 million increase in the impairmentcharge. A decrease of 50 basis points in the perpetualgrowth rate would result in a €32 million increase in theimpairment.Intangible assetsIn accordance with the principle described in note 2.5distribution networks and strategic partnerships are notamortized but rather tested annually for depreciation or assoon as there is an indication of impairment.At December 31, 2008 distribution networks and strategicpartnerships were tested for impairment together withgoodwill based on similar hypothesis. As a result of theeconomic downturn occurred in the fourth quarter of 2008,customer relationships recognized in Spain as part of theHagemeyer purchase price allocation were impaired by€2.5 million out of €14 million.PAGE 180 | REXEL 2008
10.2 Property, plant & equipment(in millions of euros)Land &BuildingsPlant &EquipmentOthertangibleassetsTotal property,plant andequipmentGross carrying amount as of January 1, 2007 203.2 487.0 33.0 723.2Effect of acquisitions and divestitures 0.7 6.0 – 6.7Additions 2.7 55.9 2.9 61.5Disposals (9.4) (20.6) (3.0) (33.0)Exchange differences (4.2) (11.1) (1.2) (16.5)Other changes 2.8 2.6 (4.5) 0.9Gross carrying amount as of December 31, 2007 195.8 519.8 27.2 742.8Effect of acquisitions and divestitures 122.4 169.6 2.5 294.5Additions 9.7 50.6 6.6 66.9Disposals (100.7) (52.5) (1.8) (155.0)Exchange differences (9.8) (19.5) (3.6) (32.9)Other changes (3.1) (30.0) (2.9) (36.0)Gross carrying amount as of December 31, 2008 214.3 638.0 28.0 880.3Accumulated depreciation and amortizationas of January 1, 2007 (64.6) (367.0) (23.1) (454.7)Amortization expense – (2.8) – (2.8)Depreciation expense (5.9) (36.5) (2.1) (44.5)Impairment losses – (4.8) – (4.8)Release 2.1 18.4 3.0 23.5Exchange differences 1.2 7.5 0.9 9.6Other changes 0.3 1.5 1.2 3.0Accumulated depreciation and amortizationas of December 31, 2007 (66.9) (383.7) (20.1) (470.7)Change in consolidation scope (44.3) (118.1) (0.3) (162.7)Depreciation expense (8.8) (48.8) (2.8) (60.4)Impairment losses 0.7 (4.3) (1.4) (5.0)Release 39.3 39.8 1.5 80.6Exchange differences 3.9 15.2 2.7 21.8Other changes 0.5 31.2 1.4 33.1Accumulated depreciation and amortizationas of December 31, 2008 (75.6) (468.7) (19.0) (563.3)Carrying amount at January 1, 2007 138.6 120.0 9.9 268.5Carrying amount at December 31, 2007 128.9 136.1 7.1 272.1Carrying amount at December 31, 2008 138.7 169.3 9.0 317.0REXEL 2008 | PAGE 181
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Leadership and proximityDocument de
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General informationIn this Document
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1. Selected financial dataThe follo
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2. Information about the Rexel Grou
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3. Business description3.1 Professi
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3. Business description− security
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3. Business descriptioni.e., approx
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3. Business descriptionIn each of t
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3. Business description− growing
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3. Business description3.2.2 The Re
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3. Business description3.3.2 Divers
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3. Business descriptionin a profita
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3. Business descriptionthat its cus
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3. Business description3.7 RESEARCH
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4. Risk factors4.1 Risks relating t
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4. Risk factorsthe commercial polic
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4. Risk factors4.3 LEGAL AND REGULA
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4. Risk factorsNon-compliance by th
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5. Corporate responsibility5.1 empl
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5. Social responsibilityHeadcount b
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5. Social responsibilityAware of th
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5. Social responsibilityaccount for
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eality of the market and the low le
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− promotion days at branches or a
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5.3.2.1 Consumption of raw material
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Emissions per item on the basis of
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5.4 STATUTORY AUDITOR’S REPORT ON
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6. Operating and financialreview6.1
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6.1.2 SeasonalityNotwithstanding th
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6.2 COMPARISON OF THE FINANCIAL RES
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The following table analyzes the ch
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In the year 2008, sales increased b
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In the year 2008, sales in North Am
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to 2007, while sales grew 6.3%. Adj
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Pursuant to article 28 of the Commi
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Financial investments also included
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− Facility C, which was a multi-c
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The main characteristics of these p
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7.2.4.1 Operating leasesThe above t
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The trends and objectives presented
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9. Profit forecastsor estimates9.1
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9.2 REXEL GROUP FORECASTS FOR 2009G
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Rexel is a company with limited lia
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Jean-Dominique Perret has been a me
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10.2 SUPERVISORY BOARD10.2.1 Compos
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Surname, name,professional addressa
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10. Management and Supervisory Bodi
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11. Compensation of corporate offic
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Page 144 and 145: 12. ShareholdersThe table below sum
Page 146 and 147: 12. ShareholdersFCE20070042, on beh
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14. Financial information concernin
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15. Additional informationRexel is
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15. Additional informationAuthoriza
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15. Additional informationDeclarati
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15. Additional informationTransacti
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15. Additional informationEach Mana
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15. Additional information− propo
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15. Additional informationmeeting b
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15. Additional information15.2.8 Sp
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17. Documents availableto the publi
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18. Responsibility forthe Document
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19. Statutory auditors19.1 Principa
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Annex 1Report of the Chairman of th
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Annex 1− authorization of regulat
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Annex 1This contractual indemnity i
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Annex 1− the payment of 50% of th
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Annex 1Additional retirement planA
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Annex 1− authorization to be give
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Annex 12. Implemented internal cont
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Annex 1defined a set of procedures,
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Annex 2Report of the Statutory Audi
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Annex 3Report of the Supervisory Bo
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Annex 4Report of the Management Boa
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Annex 42. Resolutions requiring the
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Annex 4Group, which may be existing
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Annex 4AuthorizationIssuance in con
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Annex 5Having reviewed the report o
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Annex 5II. Resolutions to be submit
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Annex 5of the proper performance of
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Annex 5Board in accordance with the
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Annex 5accordance with the provisio
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Annex 55. Decided that this delegat
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Annex 6DateTitleDecember 11, 2008Re
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Annex 7Regulation (EC) 809/2004 of
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Annex 7Regulation (EC) 809/2004 of
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