2008 Registration Document - Rexel

3. Business description3.1 Professional distribution of low- and ultra-lowvoltage products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213.1.1 A distributor of services and technical solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213.1.2 The Rexel Group’s commercial and marketing organization . . . . . . . . . . . . . . . . . . . . . . . . . 233.1.3 Logistic organization of the Rexel Group ........................................243.1.4 The Consumer Electronics and Luxury Products Distribution (ACE) division. . . . . . . . . . . . . 273.1.5 Digital Products International .................................................273.2 The Rexel Group’s markets ............................... 273.2.1 The professional distribution of low- and ultra-low voltage electrical products market .....273.2.2 The Rexel Group’s customers and their markets ..................................303.2.3 Geographic breakdown of the Rexel Group’s markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 303.3 The Rexel Groups’ competitive advantages ............... 313.3.1 A world leadership position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 313.3.2 Diversified geographic and end-market presence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323.3.3 A strong local leadership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323.3.4 An offering of high value-added products and services .............................323.3.5 Experienced and skilled personnel .............................................333.3.6 Privileged relationships with suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.3.7 An efficient logistical model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.3.8 An economic model generating high cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 333.3.9 A felxible cost structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343.4 The Rexel Group’s strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343.4.1 Operating levers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343.4.2 Pursue external growth ......................................................363.4.3 Develop the Rexel Group’s potential markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 363.6 Property, plant and equipment ........................... 373.7 Research and development, patents and licenses ........ 383.8 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 383.8.1 Product liability ............................................................383.8.2 Environmental regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393.8.3 French law for the modernization of economy ....................................39PAGE 20 | REXEL 2008