2008 Registration Document - Rexel

8. Trend information8.2 OUTLOOK8.2.1 2009-2011 outlookIn the Document de Référence filed with the Autorité desmarchés financiers (AMF) on April 30, 2008 with numberR.08-046, Rexel estimated that the Rexel Group’s objectivesby 2011, on the basis of the assumptions described inparagraph 12.2.1 of the said Document de Référence, wereas follows:− revenue compound average growth of 4% to 6%,compared to Restated sales of €13,816 billion in 2007,with at least half of this growth coming from organicdevelopment;− an adjusted EBITA margin increase of at least 100basis points from a 2007 Restated level of 5.2%. Thisimprovement would be achieved through:• the implementation of the measures described inparagraph 3.4 of this Document de Référence;• expected synergies from acquisitions completed before2008, particularly the acquisition of Gexpro;• the post-acquisition synergies described in paragraphs2.2 and 2.4 of this Document de Référence, expectedin particular after the integration of assets resultingfrom the Hagemeyer acquisition, and the disposalsdescribed in the same paragraph of this Document deRéférence;− an improvement of working capital requirements as apercentage of sales to 12.5%, representing a 70 basispoints decrease from a Restated level of 13.2% as atDecember 31, 2007, after neutralization of Rexel 2007non-recurring events and of the impact of expensesrelated to the change of control of Hagemeyer; and− a significant reduction of the net debt to EBITDA ratio, froma level of 4.0x on a Restated basis as at December 31,2007, down to a level ranging between 2.0x and 3.0x.Given the extent of the deterioration of the macroeconomicenvironment, Rexel believes that these objectives are nolonger adapted to its financial and economic situation.In addition, Rexel intends to focus on the generation ofcash flow and the optimization of the working capital,the improvement of productivity and organic growthopportunities.8.2.2 Rexel Group’s outlookGiven the sharp deterioration of the economy, Rexelanticipates a marked drop in 2009 sales, reflecting thecombined effect of volume declines and a lower copperprice.In this challenging environment, management’s priority isto defend profitability, continue to deleverage the balancesheet and anticipate growth opportunities. Rexel is thereforetaking strong actions in 2009 to:− Accelerate the cost adjustments initiated in 2007-2008through a cost saving plan of at least €110 millioncurrently being implemented;− Maximize net cash flow, continuing to focus on workingcapital, reducing gross capital expenditure by 25% andsuspending the payment of a dividend; and− Continue to capture targeted development opportunitiesin fast growing segments such as energy efficiencysolutions, public projects and key accounts.PAGE 92 | REXEL 2008