2008 Registration Document - Rexel

− Training: In most of its branches, the Rexel Groupregularly schedules training sessions led by its employees,manufacturers and third parties in order to familiarize itscustomers with innovative or complex products. Since2006, the Rexel Group has also offered continuousbroadcasting of programs in its French branchespresenting new products and training through its “InexelTV.”The Rexel Group’s service offerings are generally included inthe price of its products and, thus, are not separately billed,which enhances the Rexel Group’s role as a distributor.In addition, the Rexel Group’s services are provided inthe context of a customer loyalty and customer basedevelopment policy, especially through the enhancement ofthe customers’ know-how relating to products with recenttechnical improvements.Complementary logistics and distribution servicesThe Rexel Group’s organizational structure allows it to offerits customers logistics services, such as the quick retrievalof products in its branches (including during off-hours) orrapid on-site delivery.In addition, the Rexel Group, through its U.S. Servicesplatform, has a high value-added dedicated logistic servicesoffering in the field of electrical and mechanical productsintended for industrial customers (fittings, bolts, etc.). TheRexel Group now offers its industrial customers in theUnited States three ranges of logistics services relating tospare parts supply and parts assembly. These services arefurnished by a dedicated entity that combines the followingactivities:− inventory management and assembly services(Production Services);− distribution services and spare parts (Parts SuperCenter); and− the provision of products on customers’ productionassembly lines (Supply Logistics).These services are provided in the context of long-termcontractual joint-development programs with the RexelGroup’s customers and allow the Rexel Group to buildcustomer loyalty.3.1.2 The Rexel Group’s commercialand marketing organization3.1.2.1 A multi-channel organizationIn most of the countries in which it has significant marketshare, such as France, the United States, Canada, theUnited Kingdom, Australia, The Netherlands, Belgium,Spain, Austria and Chile, the Rexel Group has differentcommercial networks in each country. These differentnetworks generally reflect distinct features that areadapted for suppliers or products in a given end-market.This approach allows the Rexel Group to address abroader customer base and offer a broader range ofproducts, while benefiting from economies of scale bysharing common logistics and information technologyplatforms.3.1.2.2 Commercial organizationAt the end of 2008, the Rexel Group’s customer-facingemployees represented 60% of its total employees,compared to 58% at the end of 2003.In order to better respond to customer needs, the RexelGroup’s sales activities are organized as follows:− sales counter representatives, who sell products tocustomers, principally contractors, who come directly tothe Rexel Group’s branches;− telephone representatives, who are responsible foradvising customers (e.g., installation schematics) andtelephone orders;− travelling sales representatives, who visit customers in adesignated, assigned zone;− technical/commercial sales representatives, who providetechnical support for travelling sales personnel and whoare specialized by product family or customer type; and− specialized sales representatives who are essentiallydedicated to “key accounts”.The Rexel Group’s sales personnel compensation generallyincludes fixed and variable components, dependingon commercial performance. The variable portion ofemployees’ compensation depends on their geographicarea. In the United States, commissions based on grossprofit constitute the majority of the compensation paid toemployees.3.1.2.3 Pricing and terms of saleThe Rexel Group’s pricing policy is based on the ratescharged by its suppliers in each country. The Rexel Groupoffers its customers rebates based on certain criteria, suchas volume purchased by the customer, the competitiveenvironment and special promotions. In each country,general terms of sale set out the customary framework ofthe Rexel Group’s relationships with its customers. Theseinclude the main terms of sale of the products such as therates and payment delays, as well as termination clauses,transfer of ownership clauses and warranties.Furthermore, in certain geographic zones and in certaincountries, such as the United States, France and Canada,the Rexel Group has entered into framework agreementswith “key account” customers, including companiesoperating in the industrial or commercial markets. TheRexel Group defines “key accounts” as those customersthat operate multiple sites on a national and internationallevel and generate potential annual sales of €0.5 millionor more per customer. Based on 2008 sales, “keyaccounts” generated approximately €2 billion in sales,REXEL 2008 | PAGE 23