Distributor News: 2.15.2011

Rexel’s U.S. Sales Fall 7.9% (In Dollars)

Rexel’s U.S. sales declined from 2.571 billion euros in 2009 to 2.475 billion euros in 2010—a 3.7% decline. However, the exchange rate changed (according to Oanda.com’s historical currency converter) from 1 euro = $1.43 on Dec. 31, 2009 to $1.325 on Dec. 31, 2010.

Converting the information provided in Rexel’s full-year 2010 press release from euros to U.S. dollars, the sales picture is: 2009 U.S. sales in U.S. dollars = $3.54 billion and 2010 = $3.28 billion, for a decline of 7.9%.

Official comments: Q4 sales in the United States, Rexel said, were up 6.8% (after Q3’s +.5%). Results from the United States “include a negative impact on sales of 3.1 percentage points due to branch closures [36 branches closed over the last 12 months—i.e., a 17% reduction].”

Q4 sales in the United States were “driven by strong development of sales in industry, along with a slight rebound in construction spending—even if residential and commercial remain at very low levels.”

Gross margins: Sales in the United States and Canada combined resulted in a gross profit of 21.6% in 2010 vs. 21.4% in 2009, according to Rexel.

Global results: As converted into euros, Rexel’s 2010 sales around the globe totaled 11.96 billion euros. That’s 5.8% higher than in 2009; the company said the gain was 1.3% on an “organic same-day” basis. At the Dec. 31, 2010 exchange rate, the 2010 sales amounted to $15.85 billion.

Global gross margins: Worldwide, Rexel’s gross margin was 24.4%, up 10 basis points over the 2009 results.

Q4: Sales in the United States in Q4 were up 6.9% over Q4/2009, Rexel said, to 642.9 euros (almost $852 billion). Worldwide, Rexel’s sales were 3.17 billion euros ($4.2 billion), up 9.3% over Q4/2009 (up 5.2% on an “organic same-day” basis).

Decreases vs. 2009: Rexel’s total branches around the world numbered 2,113 at Dec. 31, 2010 with 27,391 employees. The figures are down 5% and 3%, respectively, vs. Dec. 31, 2009. In the United States, the company report (Appendix 5) said it had 60 fewer branches (down 16%) at 2010’s year-end vs. one year earlier, with 5,067 employees (down 9% vs. Dec. 31, 2009).

Another way of looking at these numbers: Worldwide, Rexel shed 102 branches in one year’s time; 60 of those were in the United States. The company had 830 fewer employees on Dec. 31, 2010 vs. a year earlier; 510 of those unfilled positions were in the United States.

There’s a great deal of additional information in the Rexel release, a 14-page PDF downloadable from www.rexel.com.

Market verdict: Rexel’s stock trades in France (it’s priced in euros), but you can obtain recent trading history on Yahoo’s Finance site. According to the table there, Rexel’s stock rose from a Feb. 4 close of 17.18 euros to 17.66 on Feb. 11.

Other Rexel news—

Acquisitions:

• Beijing Lucky Well Zhineng—Rexel SA reportedly plans to buy this Chinese “provider of technology and value-based products and services for industrial end-markets.”
• Nortel Suprimentos Industrials S/A—this Brazilian electrical distributor is now 75%-owned by Rexel SA, with the other 25% to be purchased in 2013 “at a price to be determined on the basis of Nortel’s performance in 2011 and 2012.”

NOTE: Rexel’s release said that the electrical distribution market in Brazil “is estimated at [roughly] $2.6 billion in 2010.”

• Wuhan Rockcenter Automation—a Rexel release (Jan. 31) said Rexel had acquired this six-year-old Chinese company. Sales for Wuhan last year were given as roughly $13 million; it has three branches, 57 people, and a central warehouse. It sells to “major industrial companies from the metal and power sectors.”
• NOTE: According to the last paragraph of the release: Since 2000, Rexel has built up a strong business platform in China through the successive acquisitions of Hailongxing (Beijing), Hualian (Shanghai), Huazhang (Hangzhou), Xidian (Suzhou), and Beijing Lucky Well Zhineng (Beijing and Tianjin). In 2010, the contribution of Rexel's operations in China to the Group's consolidated sales amounted to over €220 million, a growth of 28.4% year-on-year on a constant and same-day basis.  
• Yantra Automation—the company acquired a 74% stake in this company, described as a distributor of industrial automation and control products. What about the other 26%? Rexel apparently will buy that “at a price to be determined”—in 2014.
• Jan. 20 release on all acquisitions: the acquisitions of Beijing, Nortel, and Yanta (see it here) claimed the company, as a result of the three buys, would increase its sales in “emerging countries” by 25% over 2010.

CFO Favre speaks to Bloomberg report—a Jan. 21 report posted to Bloomberg.com included comments from Michael Favre, Rexel SA’s CFO. Favre claimed “organic revenue will accelerate” this year. The item included this: Industrial clients will drive growth in existing businesses, with “very strong” demand predicted for emerging markets, Australia, Canada, Germany, and Switzerland.

Contracts: On Jan. 31, a Tendersinfo.com report claimed Rexel Agence Agei obtained a contract worth roughly $166,000 from Ugecam CRIP of France…a Jan. 25 report claimed that Rexel obtained an electrical supply contract from Ville de Montauban for 87,472 euros (roughly $118,000) and another for lighting (at roughly $60,000)…a Jan. 23 report said Rexel would supply switchboards to contractor Espace industriel Nord of Amiens (valued at roughly $163,000)…a Jan. 22 report said OMHLM de Nanterre, a French company, had awarded a contract for electrical equipment for $173,000…Chambre de commerce et d’industrie awarded a contract to Rexel Agei for $2.7 million, according to a Jan. 19 report.

IT outsourcing—Rexel SA reportedly (Jan. 27) signed a five-year IT infrastructure outsourcing contract to Atos Origin. Here’s the release in English (on an Italian website).  Included:

            This step follows the signature, in mid-2010, of a contract with CGI for the consolidation of Rexel data centers in North America. In Europe, Atos Origin will help to transform the Rexel Information Systems by standardizing and automating the operations of the environments, in particular through its offshore competence centers, and by optimizing the number of servers through virtualization.

Federal Contracts Of Note

Almo Wire & Cable—(Philadelphia) will supply “special purpose cables” under a $43,380 contract with the Defense Supply Center. (Feb. 2)

Avnet—(Marietta, Ga.) will supply “electrical receptacle connectors” under a Defense Supply Center contract for $31,992.64. (Feb. 1)

Blond Lighting Fixture Supply—(San Antonio) obtained a $10,295.76 contract for “750W/270V pulse-start metal halide shoebox fixture lighting sets” from the U.S. Army Contracting Command. (Jan. 27)

Kelly & Hayes Electrical Supply of L.I.—(Nesconset, N.Y.) will supply “floor box systems” for $39,788.84 to the U.S. Army Contracting Command. (Feb. 1)

Nesstay Supply—(Hayward, Calif.) will supply “electrical cable insulation repair kits” under a $40,893 Defense Supply Center contract. (Jan. 11)

Oliver Supplies—(Bakersfield, Calif.) will supply “electrical insulation sheets” under a $43,820 Defense Supply Center contract. (Jan. 10)

Revere Electric Supply—(Chicago) won a $31,233.98 contract for “cartridge fuses” from the Defense Supply Center. (Feb. 1)

Summit Industries—(Dayton, Ohio) won a $31,332.96 contract for “electromagnetic relays” from the Defense Supply Center. Jan. 26 and another (same source, same day) for “magnetic contactors” totaling $25,444.24.

Trillium Wire & Cable—(Scottsdale, Ariz.) has a $29,380 contract to supply “electrical wire” from the Defense Supply Center. (Jan. 12)

U.S. Hardware Supply—(Winter Park, Fla.) won a Defense Supply Center contract for “electrical generator parts kits” for $25,061.40. (Jan. 12)

Yale Electric Supply—(Lebanon, Pa.) won a $71,070 Defense Supply Center contract for “emergency light units.” (Jan. 27)…and a $96,552 deal from the same source (awarded same day) for “metallic rectifiers.”