REXEL :Q1 2016 RESULTS (unaudited)

 SEQUENTIAL IMPROVEMENT IN SALES

• Sequential improvement in organic same-day sales in all three geographies
• Organic same-day sales broadly stable (-0.2%), excluding the 1.2 percentage point negative copper effect
• Resumption of growth in organic same-day sales in Europe, notably in France and The Netherlands, as well as in the Pacific region, notably in Australia

RESILIENT PROFITABILITY WITH ADJUSTED EBITA MARGIN AT 3.9% OF SALES

• Solid gross margin in Europe
• Strong reduction of opex in North America, mainly driven by the USA
• Slight sequential improvement in profitability in Asia-Pacific

FULL-YEAR FINANCIAL TARGETS CONFIRMED

¹ See definition in the Glossary section of this document

• Financial statements as of March 31, 2016 were authorized for issue by the Board of Directors on April 28, 2016. They are 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
Broadly stable sales on a constant and same-day basis, excluding copper effect in Q1 2016, with Europe and Asia-Pacific returning to growth

Sequential improvement in organic same-day sales in all three geographies, despite a more negative copper effect

In the first quarter, Rexel posted sales of €3,160.6 million, down 1.9% on a reported basis and down 1.4% on a constant and same-day basis. Excluding the 1.2% negative impact due to the change in copper-based cable prices, sales were broadly stable on a constant and same-day basis (-0.2%).

The 1.9% drop in sales on a reported basis reflected:

• A negative currency effect of €35.1 million (mainly due to the depreciation of the Canadian Dollar and British pound, partially offset by the appreciation of the US dollar against the euro),
• A positive scope effect of €38.1 million from recent acquisitions (Sofinther in France, Electro-Industrie en Acoustiek in Belgium, Zhonghao Technology in China and Brohl & Appell in the USA),
• A negative calendar effect of 0.6 percentage points.

Europe (57% of Group sales): +0.3% on a constant and same-day basis

In the first quarter, sales in Europe increased by 0.5% on a reported basis and returned to growth on a constant and same-day basis (+0.3%). Excluding the copper effect, sales grew by 1.5% on a constant and same-day basis.

• In France (36% of the region's sales), sales returned to growth. They were up 2.5% year-on-year, reflecting the favorable comparison base of Q1 2015 (-3.6%) but not yet reflecting the current improvement in housing starts that is expected to translate into Rexel's sales later in the year.
• In the UK (14% of the region's sales), sales were down 1.1% on a constant and same-day basis. Excluding both the 45% drop in sales of photovoltaic equipment and the negative copper effect, sales were up 1.8%.
• In Germany (11% of the region's sales), sales dropped by 3.0% including copper, but were broadly stable (-0.3%) excluding this effect. They improved sequentially over Q4 2015 (-4.7% including copper and -2.4% excluding copper).
• In Scandinavia (12% of the region's sales), sales were broadly stable year-on-year (-0.1%). Sweden posted solid growth of +3.6% despite a very challenging base effect (+11.8% in Q1 2015) while sales in Norway were broadly stable (+0.2%) and sales in Finland (-9.1%) reflected the challenging base effect of Q1 2015 (+7.3%) as well as difficult macro-economic conditions.
• The Netherlands returned to growth, with sales up 7.1%.

• In other European countries, performance was as follows:

• In Switzerland, sales were down 6.0%, still impacted by the negative effect of the Swiss Franc vs. the euro,
• In Austria, sales posted a solid increase of 5.9%,
• In Italy, sales were back to growth (+3.4%),
• In Belgium, sales posted a  slight decrease of -0.9%,
• In Spain, sales dropped by 0.7%, reflecting lower export activity, while domestic activity was up 2.8%.

North America (34% of Group sales): -4.4% on a constant and same-day basis

In the first quarter, sales in North America were down 5.6% on a reported basis including a negative currency effect of €2.3m (mainly due to the depreciation of the Canadian dollar, which more than offset the appreciation of the American dollar against the euro). On a constant and same-day basis, sales were down 4.4%, improving sequentially vs. Q4 2015 (-6.5%), despite continued negative effects from lower sales to the Oil & Gas industry (minus 36% year-on-year) and lower cable sales (USD copper prices dropped by 20% year-on-year).

• In the US (78% of the region's sales), sales were down 3.6%, of which:

• 4.1 percentage points attributable to the 42% drop in sales to the Oil & Gas industry,
• 2.2 percentage points attributable to lower cable sales,
• 1.6 percentage points attributable to branch network optimization (part of a program of cost efficiency measures implemented in the USA and presented on July 29, 2015).

Excluding these three unfavorable effects, sales were up 4.3% in the quarter, reflecting good activity in the construction market.

• In Canada (22% of the region's sales), sales were down 7.4%, of which:

• 1.2 percentage points attributable to the 13% drop in sales to the Oil & Gas industry,
• 1.1 percentage points attributable to the 91% drop in photovoltaic sales,
• 1.7 percentage points attributable to the 26% drop in sales to the Mining industry.

Excluding these three unfavorable effects, sales were down 3.4% in the quarter, as, contrarily to the US, the construction market remained weak.

Asia-Pacific (9% of Group sales): +0.2% on a constant and same-day basis

In the first quarter, sales in Asia-Pacific were down 2.2% on a reported basis, including a negative effect of €14.5m from currencies, partly offset by a positive scope effect of €6.3m. On a constant and same-day basis, sales were up 0.2%, reflecting contrasting performance between Pacific and Asia.

• In the Pacific (47% of the region's sales), sales were up 2.3%:

• In Australia (c. 80% of Pacific), sales confirmed the continuous sequential improvement and were back to growth (+1.3%) for the first time  since Q3 2011, despite a 1.6 percentage point negative impact attributable to a 15% drop in sales to the Mining industry,
• In New Zealand (c. 20% of Pacific), sales posted solid growth of 6.6%.

• In Asia (53% of the region's sales), sales were down 1.6%:
  • In China (c. 65% of Asia), sales dropped by 4.7%, reflecting tougher macro-economic conditions,
  • In South-East Asia (c. 25% of Asia), sales grew by 4.8%, despite lower sales (-22%) to the Oil & Gas industry,
  • In the Rest of Asia (c. 10% of Asia), sales increased by 4.9%, driven by a 18.4% growth in India, while activity in the Middle East dropped by 4.7% as a consequence of lower sales to the Oil & Gas industry.

PROFITABILITY

Solid gross margin at 24.7% in Q1, down only 5 bps year-on-year, mainly impacted by Asia-Pacific
Resilient adjusted EBITA of €121.9m, at 3.9% of sales

In the first quarter, gross margin stood at 24.7%, down 5 basis points year-on-year. Gross margin improved sequentially in all three geographies. Europe was stable and North America was resilient, while Asia-Pacific was down 70 basis points on a challenging comparable base, as Q1 2015, at 18.8%, was the strongest quarter last year.

In the first quarter, distribution and administrative expenses (including depreciation) stood at 20.9% of sales, up 15 basis points year-on-year as a percentage of sales. In North America, distribution and administrative expenses (including depreciation) were reduced by €12.3 million, of which c. 80% came from the USA. As a percentage of sales, they were stable despite the 5.6% drop in sales on an actual-day basis. In Europe, they increased by 20 basis points, reflecting investment to accompany the gradual recovery in sales as well as increased depreciation compared to Q1 2015. In Asia-Pacific, they increased by 40 basis points, mainly impacted by Asian countries.

As a result, adjusted EBITA margin in Q1 stood at 3.9% of sales, a 20 basis-point drop compared to a 2.0% drop in sales on a constant and actual day basis. It was down 110 basis points year-on-year in Asia-Pacific (9% of Rexel's sales) but resilient both in Europe and North America (91% of Rexel's sales).

In the first quarter, reported EBITA stood at €113.8 million, down 10.0% year-on-year.

NET INCOME

Net income from continuing operations up 67.5%, at €38.8m, driven by lower net financial expenses
Recurring net income up 13.5%, at €56.7m

Operating income stood at €93.0 million, down 11.4% year-on-year.

• Amortization of intangibles resulting from purchase price allocation amounted to €3.9 million (vs. €4.3 million in Q1 2015).
• Other income and expenses amounted to a net charge of €16.9 million (vs. a net charge of €17.2 million in Q1 2015). They included €13.6 million of restructuring costs (vs. €15.3 million in Q1 2015).

Net financial expenses amounted to €33.2 million in the quarter (vs. €69.6 million in Q1 2015). This significant drop reflected both the €19.6 million charge from early redemption of the 7% bonds, which impacted Q1 2015, and the lower average effective interest rate thanks to last year's refinancing operations. The average effective interest rate decreased by 70 basis points year-on-year: it stood at 3.8% on gross debt (vs. 4.5% in Q1 2015).

Income tax represented a charge of €20.9 million. The effective tax rate stood at 35.0% (vs. 34.6% in Q1 2015).

Net income from continuing operations rose by 67.5% to €38.8 million (vs. €23.2 million in Q1 2015).

As the disposal of our Latin American operations represented a loss of €2.5 million in Q1 2015, net income was up 87.8%, at €38.8 million (vs. €20.7 million in Q1 2015).

Recurring net income amounted to €56.7 million, up 13.5% year-on-year (see appendix 2).

FINANCIAL STRUCTURE

Net debt reduced by 5.9% year-on-year

In the quarter, free cash flow from continuing operations before interest and taxwas an outflow of €194.9 million (vs. an outflow of €141.9 million in Q1 2015). This net outflow included:

• Gross capital expenditure of €26.6 million (vs. €26.0 million in Q1 2015),
• An outflow of €287.1 million from change in working capital on a reported basis, reflecting the traditional seasonality of the business (vs. an outflow of €240.8 million in Q1 2015).

At March 31, 2016, net debt stood at €2,495.6 million, down 5.9% year-on-year (vs. €2,652.5 million at March 31, 2015).

It took into account:

• €31.6 million of net interest paid,
• €20.3 million of income tax paid,
• €41.1 million of positive currency effect.

The overall economic environment remains challenging, particularly in some industrial segments. However, there are signs of construction recovery in some European countries, notably in France, which augur well for activity in the second half.

In this context, the full-year 2016 financial targets, announced on February 11, are confirmed:

• Organic sales growth on a constant and same-day basis of between -3% and +1%
  • This sales guidance includes an estimated negative impact from copper prices of c. 1.1 percentage points (based on the assumption of average copper price of USD4,500/t in 2016)
  • Excluding this estimated negative impact, this corresponds to a sales guidance of between -1.9% and +2.1%
• Adjusted EBITA margin of between 4.1% and 4.5%
• Solid free cash-flow generation of:
  • Between 70% and 80% of EBITDA, before interest and tax
  • Between 35% and 45% of EBITDA, after interest and tax

May 25, 2016                                     Shareholders' Meeting in Paris
July 29, 2016                                      Second-quarter and Half-year results
October 31, 2016                             Third-quarter and 9-month results

The financial report for the period ended March 31, 2016 is available on the Group's website (www.rexel.com), in the "Regulated information" section, and has been filed with the French Autorité des Marchés Financiers.

A slideshow of the first-quarter 2016 results is also available on the Group's website.

Rexel, a global leader in the professional distribution of products and services for the energy world, addresses three main markets - residential, commercial and industrial. The Group supports its customers to be at their best in running their business, by providing a broad range of sustainable and innovative products, services and solutions in the field of technical supply, automation and energy management. Rexel operates through a network of some 2,100 branches in 35 countries, with c. 28,000 employees. The Group's sales were €13.5 billion in 2015.
Rexel is listed on the Eurolist market of Euronext Paris (compartment A, ticker RXL, ISIN code FR0010451203). It is included in the following indices: SBF 120, CAC Mid 100, CAC AllTrade, CAC AllShares, FTSE EuroMid, STOXX600. Rexel is also part of the following SRI indices: DJSI Europe, FTSE4Good Europe & Global, EURO STOXX Sustainability, Euronext Vigeo Europe 120 and ESI Excellence Europe. Finally, Rexel is included on the Ethibel EXCELLENCE Investment Register in recognition of its performance in corporate social responsibility (CSR). For more information, visit Rexel's web site at www.rexel.com

FINANCIAL ANALYSTS / INVESTORS

PRESS

REPORTED EBITA (Earnings Before Interest, Taxes and Amortization) is defined as operating income before amortization of intangible assets recognized upon purchase price allocation and before other income and other expenses.

ADJUSTED EBITA is defined as EBITA excluding the estimated non-recurring net impact from changes in copper-based cable prices.

EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is defined as operating income before depreciation and amortization and before other income and other expenses. 

RECURRING NET INCOME is defined as net income adjusted for non-recurring copper effect, other expenses and income, non-recurring financial expenses, net of tax effect associated with the above items.

FREE CASH FLOW is defined as cash from operating activities minus net capital expenditure.

NET DEBT is defined as financial debt less cash and cash equivalents. Net debt includes debt hedge derivatives.

* Constant and adjusted = at comparable scope of consolidation and exchange rates, excluding the non-recurring effect related to changes in copper-based cables price and before amortization of purchase price allocation; the non-recurring effect related to changes in copper-based cables price was, at the EBITA level, a loss of €4.4 million in Q1 2015 and a loss of €8.2 million in Q1 2016.

Consolidated Income Statement

Bridge Between Operating Income Before Other Income And Other Expenses And Adjusted EBITA

Recurring Net Income

Sales And Profitability By Segment

Consolidated Balance Sheet¹

1 Net debt includes Debt hedge derivatives for €(29.8)m at March 31, 2016 and €(6.4)m at December 31, 2015. It also includes accrued interest receivables for €(2.5)m at March 31, 2016 and for €(0.7)m at December 31, 2015.

Change in Net Debt

1 Includes restructuring outflows of €16.6m in Q1 2015 and €8.0m in Q1 2016
2 Excluding settlement of fair value hedge derivatives

Based on the assumption of the following average exchange rates:

• 1€ = 1.13USD
• 1€ = 1.48CAD
• 1€ = 1.49AUD
• 1€ = 0.79GBP

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