Rexel Sa Unsp/Adr

Good morning. This is the conference operator. Welcome and thank you for joining the Rex Health third quarter 2025 sales conference call. As a reminder, all participants are in a listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Guillaume Texier, Group CEO of Rexel. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today for our third quarter 2025 sales presentation. I appreciate you making the time to be with us so early. As always, I'm joined by Laurent Delabarre, our Group CFO, who will walk you through the detailed sales figure in just a few minutes. But first, I'd like to take a look at the key highlights of the quarter and share how our transformation continues to support our growth and performance, even in a complex and evolving environment. So let's get started. We delivered a solid top-line momentum with Q3 2025 being the sixth consecutive quarter of sequential improvement. We are also maintaining a rigorous pricing and we keep investing with discipline where demand is strongest. At the same time, we are progressing on our Accelerate 2028 roadmap, raising digital adoption, deploying AI to improve speed and accuracy across commercial and operations, and reinforcing the balance sheet. You saw in our press release that we delivered 4.8 billion euros of sales in Q3 2025, up 3% on a same-day basis, with North America continuing to be our primary growth engine. Three key highlights to keep in mind. First, the momentum is driven by high growth segments where we are investing with success. Data centers and broadband infrastructure represent 12.5% of US sales and contributed for more than half of our Q3 growth. We are scaling to support this demand, including the opening of a new 80,000 square foot distribution center in Reno to better serve the Western U.S. Second, on pricing, notably in the U.S., we maintain strong discipline with effective pass-through of tariff-related increases in a competitive market. And lastly, in Europe, despite a softer backdrop, we saw sequential improvements, notably driven by an acceleration in France, Benelux, and Dark Region, with market share gains in key markets. Overall, Europe was positive in the quarter if you exclude solar, reflecting the strengths of our diversified food trades. Turning now to slide four, let me take a moment to discuss our capital allocation strategy. Our Accelerate 2028 roadmap continues to pass important milestones. First, digital penetration stood at 33% of sales in Q3 2025, reflecting sustained adoption of our e-commerce and omnichannel tools. Second, we are accelerating initiatives to harness AI across pricing, sales enablement, customer service procurement, and logistics, improving speed, accuracy, and the customer experience. Third, we remain disciplined in our capital allocation. We completed the disposal of our activities in Finland in September, issued a new €400 million senior note due 2030 to optimize our debt profile, and deployed €50 million in share buybacks since the beginning of the year. These actions clearly strengthen our operating model and sharpen our portfolio. On slide five, let me spend some time to update you on our COMEX executive committee. As you know, we are a decentralized model with the country CEO being owners of their business and the common best practices and governance. As you can see, the leadership team is very close-knit, which helps us to be both agile and fully aligned to accelerate our transformation. And let me comment on the recent changes. As you know, we have reinforced a cluster organization to favor best practices sharing between countries. So Thomas Moreau has extended his responsibility and is now in charge of a European cluster, including France, UK, the Netherlands, and Italy. Thomas Stadelhofer is currently CEO for Austria and will lead the Dark Cluster in January 2026, replacing Robert Favaler, who is retiring after having done a great job for Excel. Roger Little is still in charge of North America. And Pierre Benoit, who underwrites Cluster to Thomas, is our CEO for Belgium until he retires at the end of the year. Isabelle Hoffner has also taken on HR, in addition to her previous responsibilities as General Secretary. And Julien Neuschwander is now in charge of digital. He was at Rexel France and replaces Guillaume Dubrul, who is now in charge of Germany. And of course, Laurent maintains his remit as Group CFO, as well as leading on China and India. And talking about Laurent, with that, let me now hand over to Laurent, who will take you through the detailed numbers for the third quarter.

Thank you, Guillaume, and good morning to all. Let's start on slide seven with the different building blocks of our Q325 sales performance. Our sales of 4.8 billion euros were stable on a reported basis, with organic and M&A our two main pillars, both at work but offset by currency effects. Indeed, while the organic growth to that plus 2.7% on an actual day basis, our acquisition strategy contributes to plus 0.5% net of both New Zealand and Finland disposals. And we have closed the disposal of Finland in September, which has been excluded from our scope as of September 1st. The scope impact includes the positive contribution of ITESA in France, TechnoBI in Italy, as well as Schwing and Warschauer in the Northeast region of the US, and Jacquemart in Canada. For full year 2025, we anticipate the scope effect to be close to 0.9%, based on already completed acquisitions and the two disposals I mentioned. The currency effects to that minus 3.3% in Q3 2025 mainly due to the depreciation of the US dollar against the Euro. Assuming unchanged spot rates until year-end, we now anticipate a currency impact of minus 2.3% for the full year 2025. On slide H, you see the selling price impact and the breakdown of our sales evolution by geography. Our trajectory is clearly improving, with six consecutive quarters of better same-day sales growth. And at group level, we progressed regularly from minus 4.6 in Q124 to plus 3 in Q325, demonstrating consistent execution and pricing discipline. And first, on pricing, selling prices contributed to plus 1.4% to the sales growth in the quarter, including cable and non-cable, a similar effect compared to Q225. Non-cable selling price were up plus 0.9%, mainly driven by the tariffs in the US. We still have two product families that are deflationary, solar products with an effect broadly similar to Q225, and steel conduits in the US, sequentially improving with the second wave of tariffs on steel and aluminum. Cable pricing contributed for plus 0.5% in the quarter, similar to Q225. And by geography, we saw North America remaining the main growth engine, up plus 7.4%. Europe stood at minus 0.5%. And APAC improved sequentially, now close to break-even. I will detail Europe and North America in the next slide. And more specifically on Asia-Pacific, accounting for 6% of group revenues. China was down minus 4.1%. in a still challenging industrial market environment, with export activities facing headwinds following the introduction of the US tariff. The sequential improvement versus Q2 2025 is supported by a slightly better volume and easier base effect from last year. In Australia, sales were close to breakeven, improving compared to Q2 2025, thanks to residential and non-residential markets. boosted by solar activity, supported by the introduction of subsidies on batteries. And lastly, India, which is small but grew very significantly, with sales up 26% as we capture the growth in industrial automation. The next slide, slide nine, focus on our performance in Europe. Our Q3 25 same day sales to a minus 0.5%, a resilient performance driven by market share gains in an environment that remains soft. As Guillaume said, this performance is positive, up plus 0.6, excluding the solar segment. As a reminder, Q2 2025 was down 3%. The sequential improvement is mainly explained by better trends in residential, excluding solar, in several countries like Sweden, France, Netherlands, Austria, and Germany. And more specifically, let me highlight the key change in the quarter. France continued to progress, supported by strong demand from small contractors, especially air conditioning, plus further market share gains and a favorable base effect since summer 24 was impacted by the Olympic Games. Benelux returned to positive territory, helped by air conditioning in the Netherlands and solar business in Belgium. The DACH region remains negative but improved sequentially thanks to Switzerland and Austria. while Germany stayed soft mainly due to the difficult environment plus the selectivity strategy implemented to protect profitability. Sweden was broadly stable excluding solar and restating from September 24 one-off as we benefited last year from a cyber attack affecting one of our competitors. Lastly, the UK was still impacted by a tough market along with business selectivity and branch closure. On slide 10, we turn to our performance in North America, where same-day sales were up a robust 7.4%, with similar trends in both countries. While projects activity continued to be the main growth driver of the quarter in Canada, it was interesting to see the proximity business above projects in the US. The level of backlog remains overall at a good level, representing 2.3 months of sales at the end of September, very similar to the level at the end of June. And let's summarize the key highlights for our two countries. In the US, same-day sales growth stood at plus 7.4%, driven by non-residential demand and continued strength in high-growth segments, with data center and broadband infrastructure up almost 50%. Selling price excluding piping were up mid-single digit in the quarter. The pricing of steel conduit products is still negative but improved sequentially. Canada saw same-day sales growth of 7.5%, a very strong performance, still driven by non-residential and industrial projects. And we saw datacom accelerating, boosting by our commercial initiative. And let me now hand back to Guillaume before we move to our questions. Thank you, Laurent.