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2016-10-28

REXEL : THIRD-QUARTER & NINE-MONTH 2016 RESULTS

THIRD-QUARTER&NINE-MONTH 2016 RESULTS
(unaudited)

ORGANIC SALES DOWN 4.3% IN Q3 IN A PERSISTENTLY CHALLENGING ENVIRONMENT

SOLID GROSS MARGIN IN Q3, ADJUSTED EBITA MARGIN IMPACTED BY LOWER SALES AND
ONE-OFFS

FULL-YEAR FINANCIAL TARGETS CONFIRMED, AT THE LOW-END OF THE FEBRUARY GUIDANCE

NEW EXECUTIVE COMMITTEE WITH AN INCREASED REPRESENTATION OF COUNTRY/REGION
MANAGERS
SALES OF €3.194bn IN Q3

* Down 4.3% on an organic basis, including -0.6% from calendar and -0.9% from
copper
* Down 5.6% on a reported basis, including -1.6% from currency

ADJUSTED EBITA MARGIN OF 4.0% IN Q3

* Solid gross margin of 23.9%, improvement in all three geographies
* Adj. EBITA margin down 51bps, of which 21bps due to one-off effects and
30bps mainly reflecting the impact of lower sales on opex as a percentage
of sales

FULL-YEAR FINANCIAL TARGETS CONFIRMED,
AT THE LOW-END OF THE FEBRUARY GUIDANCE

NEW EXECUTIVE COMMITTEE WITH AN INCREASED REPRESENTATION OF COUNTRY/REGION
MANAGERS

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| Key figures1 Q3 2016 YoY change 9m 2016 YoY change |
| Sales €3,193.9m €9,704.4m |
| On a reported basis -5.6% -3.2% |
| On a constant and actual-day basis -4.3% -2.1% |
| On a constant and same-day basis -3.7% -2.5% |
| Adjusted EBITA €127.6m -15.2% €399.9m -7.1% |
| As a percentage of sales 4.0% 4.1% |
| Change in bps as a % of sales -51bps -22bps |
| Reported EBITA €124.9m -10.7% €385.8m -7.1% |
| Operating income €107.4m -10.2% €327.1m stable |
| Net income from continuing op. €37.6m -20.9% €133.4m +47.0% |
| Recurring net income €53.5m -17.1% €187.5m -5.2% |
| FCF before interest and tax €31.2m vs. €36.6m €24.4m vs. €39.0m |
|from continuing op. |
| Net debt at end of period €2,511.0m -4.3% €2,511.0m -4.3% |
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1See definition in the Glossary section of this document

Patrick BERARD, Chief Executive Officer, said:

"Rexel's sales in the third quarter were impacted by a persistently
challenging environment, particularly in the US, the UK and China.

Nevertheless, our gross margin improved in all geographies, while adjusted
EBITA margin was down year-on-year, reflecting the impact of lower sales on
operating costs as a percentage of sales, as well as non-recurring effects.

We confirm our guidance for the current year, at the low-end of the range
given in February, on the basis of our performance over the first nine months
of the year and our expectations for the last quarter.

We are actively pursuing the measures that will enable Rexel to improve
structurally its sales momentum and operational efficiency. To this end and
as a first step in our transformation program, we have appointed a new
Executive Committee, with an increased representation of country/region
managers.

As stated last July, we will present an update on Rexel's strategy and
ambitions on February 13, 2017, at a meeting to be held in Paris."
FINANCIAL REVIEW FOR THE PERIOD ENDED SEPTEMBER 30, 2016
* Financial statements as of September 30, 2016 were authorized for issue by
the Board of Directors on October 27, 2016. They were not audited by
statutory auditors.
* The following terms: EBITA, Adjusted EBITA, EBITDA, Recurring net income,
Free Cash Flow and Net Debt are defined in the Glossary section of this
document.
* Unless otherwise stated, all comments are on a constant and adjusted basis
and, for sales, at same number of working days

SALES

In Q3, sales were down 4.3% on an organic basis, including a cumulative 1.5%
negative effect from copper
(-0.9%) and calendar (-0.6%); on a constant and same-day basis, they were down
3.7%

In 9m, sales were down 2.1% on an organic basis, including a positive calendar
effect of 0.4%; on a constant and same-day basis, they were down 2.5%,
including a 1.1% negative copper effect

In Q3, Rexel posted sales of €3,193.9 million,down 5.6% on a reported basis.
On a constant and same-day basis, sales were down 3.7%, including an 0.9%
negative effect due to the change in copper-based cable prices.

The 5.6% drop in sales on a reported basis included:

* A negative currency effect of €53.9 million (mainly due to the depreciation
of the British pound against the euro),
* A positive net scope effect of €9.1 million resulting from recent
acquisitions (Sofinther in France, Zhonghao Technology in China and
Brohl&Appell in the US) and recent divestments (Poland, Slovakia and
Baltics),
* A negative calendar effect of 0.6 percentage points.

In 9m, Rexel posted sales of €9,704.4 million,down 3.2% on a reported basis.
On a constant and same-day basis, sales were down 2.5%, including a 1.1%
negative impact due to the change in copper-based cable prices.

The 3.2% drop in sales on a reported basis included:

* A negative currency effect of €183.9 million (mainly due to the
depreciation of the Canadian dollar and the British pound against the
euro),
* A positive net effect of €66.6 million from recent acquisitions (Sofinther
in France, Electro-Industrie en Acoustiek in Belgium, Zhonghao Technology
in China and Brohl&Appell in the US) and recent divestments (Poland,
Slovakia and Baltics),
* A positive calendar effect of 0.4 percentage points.

Europe (55% of Group sales): -1.6% in Q3 and -0.8% in 9m on a constant and
same-day basis

In the third quarter, sales in Europe decreased by 5.8% on a reported basis,
including a negative net scope effect of €5.9m and a negative currency effect
of €50.9m (mainly due to the depreciation of the British pound against the
euro). On a constant and same-day basis, sales were down 1.6%, and down 0.5%
excluding the negative impact of copper.

* InFrance(35% of the region's sales), sales were down 1.1% on a constant and
same-day basis, of which 0.7 percentage points came from lower cable sales.
This drop in sales mainly reflected poor activity in July, while sales in
August and September were broadly stable. As expected, the recovery in
residential construction that is reflected in recent housing permits and
starts has not materialized yet, due to the usual time lag between
construction recovery and its materialization in sales of low and ultra-low
voltage electrical equipment.
* In theUK(14% of the region's sales), sales were down 6.4% on a constant and
same-day basis, of which 1.3 percentage points came from lower cable sales
and 3.0 percentage points came from a sharp drop (-78%) in PV sales. The
rest of the drop was mainly due to the market contraction that followed the
Brexit vote.
* InGermany(11% of the region's sales), sales continued to improve
sequentially, with a slight rise of 0.2% including the impact of copper and
a more substantial rise of 1.8% excluding copper. This is the first quarter
this year in positive territory, as the 0.2% increase in constant and
same-day sales followed declines of 3.0% in Q1 and 2.0% in Q2.
* InScandinavia(13% of the region's sales), sales were up 1.6%
year-on-year.Swedencontinued to post solid growth (+9.5% despite a
challenging comparable base of +6.2% in Q3 2015) andFinlandimproved
sequentially (-0.5% after -9.1% in Q1 and -5.7% in Q2) but sales
inNorwaywere strongly impacted by lower cable sales (-5.6 percentage points
out of the 8.3% decline in sales).
* Inother European countries, performance was as follows:

* Sales inThe NetherlandsandBelgiumgrew by 5.3% and 2.5% respectively,
* Sales inSwitzerlandwere down 4.7%, of which 1.5 percentage points came from
lower cable sales, while sales inAustria, increased by 2.1%,
* Sales inSpaindropped by 16.2% but, as in the previous quarters, this drop
was almost entirely due to export activity (down 76%), while domestic
activity remained broadly stable; sales inItalywere down 4.0%.

North America (35% of Group sales): -6.0% in Q3 and -4.9% in 9m on a constant
and same-day basis

In the third quarter, sales in North America were down 5.8% on a reported
basis, including a negative currency effect of €4.0m and a positive scope
effect of €5.5m. On a constant and same-day basis, sales were down 6.0%.
Despite an easier comparable base, the year-on-year drop in sales to the
Oil&Gas industry continued to impact sales in Q3, notably in the US, where
they were down 31% in Q3 2016 after a 36% drop in Q3 2015; in Canada, this
effect started to improve as sales to the Oil&Gas industry were down 6% in Q3
2016 after a 38% drop in Q3 2015.

* In theUS(78% of the region's sales), sales were down 6.6%, of which:

* 2.0 percentage points attributable to the 31% drop in sales to the Oil&Gas
industry,
* 0.6 percentage points attributable to lower cable sales,
* 1.6 percentage points attributable to branch network optimization.

Excluding these unfavorable effects, sales were down 2.4% in the quarter,
mainly reflecting a drop in sales to the industrial end-market. Platt, in the
Northwest, continued to post solid sales growth.

* InCanada(22% of the region's sales), sales were down 4.0% (after -7.4% in
Q1 and -7.1% in Q2), of which:

* 0.4 percentage points attributable to the 6% drop in sales to the Oil&Gas
industry,
* 1.4 percentage points attributable to the 50% drop in sales to the wind
industry.

Excluding these unfavorable effects, sales were down 2.2% in the quarter,
mainly reflecting a drop in sales to the industrial end-market.

Asia-Pacific (10% of Group sales): -5.6% in Q3 and -3.0% in 9m on a constant
and same-day basis

In the third quarter, sales in Asia-Pacific were down 3.4% on a reported
basis, including a positive scope effect of €9.4m and a positive currency
effect of €1.1m. On a constant and same-day basis, sales were down 5.6%,
mainly reflecting poor performance in Asia.

* InAsia(52% of the region's sales), sales were down 9.0%: * InChina(67% of
Asia), sales dropped by 11.2%, of which 3.0 percentage points came from a
sharp drop (-28%) in wind sales; the remaining drop continued to reflect
low sales to the industrial end-market (which represents the bulk of sales
in China), * InSout...

Författare Hugin

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