Rexel Sa Ord

Good evening, everyone, and thank you for joining us today for our full year 2025 results presentation. I'm with Laurent Delabarre, our Group CFO, who will take you through the financials and the detail numbers in a few minutes. And before that, let me briefly set the scene and share the key messages. 2025 was another year of market outperformance and margin resilience, and this is a particularly remarkable outcome as it was delivered in a mixed environment. It also clearly demonstrates the transformation of Rexel's model that is underway and gathering pace. Beyond the results, an additional element of satisfaction is that behind the scenes, we continue to take initiatives to strengthen the group for the next phase. Building momentum in high growth verticals, such as data centers, actively managing the portfolio, and accelerating our transformation through digital, AI, and productivity initiatives. which supports our confidence in our mid-term ambition. With that, let's get started. And let me begin with a quick overview of the key highlights of the year. First of all, as I mentioned, our sales and margin performance offers an important proof point that Rexel's transformed business model is working, not only in favorable macro conditions, but also in a more mixed environment. Second, we adapted quickly to a very different environment in Europe and North America. As conditions evolved through the year, we stayed close to our customers and we accelerated execution progressively, adjusting priorities and protecting performance. And third, as I said, we stepped up self-help actions through our Accelerate 20H strategic plan. These initiatives are very operational and concrete. strengthening discipline, improving efficiency, and ensuring we continue to build the foundations for future performance. So overall, resilient results today, rapid adaptation throughout the year, and action plans that support the next steps of our journey to reach our mid-term ambition. With that, let's move on and take a look at the year in more detail. And turning to our full year achievements on slide four, we met or exceeded the guidance we set for the year on all KPIs. First, on top line, we achieved plus 2.5% same-day sales growth above the initial guidance that we had raised in October. Second, profitability remained very solid. We delivered a current adjusted EBITDA margin of 6%, fully in line with our guidance, again, illustrating the resilience of our margins in a challenging environment. And third, cash generation was strong. Our free cash flow conversion before interest and tax reached 76%, well above our guidance of above 65%, when excluding the impact of the 124 million euros French antitrust fine. So overall, we delivered growth, we maintained margin, and generated strong cash, providing a solid base as we move into the next year and execute our priorities. Let me then take a step back on the backdrop. It was not a particularly easy environment. Europe stayed weak, notably in residential. North America was impacted by uncertainty and a delayed recovery in industrial automation, and Asia-Pacific remained subdued. The clear area of strength was AI-driven data center investment and favorable pricing in the U.S., supported by trade tariffs. In that context, Rexel did what we set out to do. We outperformed and gained share across our key markets. We are seeing a real payoff from the work we've been doing over the last several years on Salesforce excellence, higher digital penetration, and the ramp-up of advanced services. We also leaned into data centers and broadband infrastructure, particularly in the U.S., with dedicated teams and branches, and we further strengthened our position in the telecom space with the teleacquisition. In addition, we stayed agile on the portfolio with five acquisitions and two disposals. Overall, tough markets, but strong execution, and we've continued to build momentum in the right growth areas. From a geographical standpoint, the year really comes down to how we manage the two main engines of the group, North America and Europe. In North America, the focus was on managing profitable growth. We captured the trends in higher growth segments, and at the same time, we managed the tariff situation in a disciplined way. And importantly, we kept tight control of the cost base, delivering growth while operating with a broadly similar FTE level. In Europe, the environment was more muted with negative volumes and flat pricing, so we moved fast on costs. We rapidly implemented adaptation plans, leading to a workforce reduction of around 4%, about 600 FTEs in 2025, while keeping a strong focus on margins. Taken together, this is what drove improved margin resilience versus previous cycle downturns. Let me now focus on data centers in North America on slide seven. What began three years ago as a targeted initiative is now achieving scale to become one of our most attractive growth platforms. In the US, we are reinforcing our position. We continue to significantly outperform the market with very strong momentum in Q4 and across the year, and data center already represents a meaningful share of ourselves. To support that growth, we expanded our footprint and capabilities close to project size, adding, for example, around 200,000 square feet of storage capacity in key locations like Atlanta, Mesa, and Reno, with further potential to scale. Our model is simple, local branches and resources backed by national coordination. That allows us to be close to customers on execution while still bringing the breadth of Rexel expertise, availability, and consistency across multiple sites. We also broadened our offering into new product categories that matter for data centers built, and we are continuing to add dedicated resources and expertise to capture this next wave of projects. In Canada also, we are off to a promising start. Here, the activity for us is concentrated in the Western region. We are active in the gray room offering from UPS to panels and data comm accessories. And we have a strong backlog that supports continued momentum for 2026. So the key takeaway here is that our scale, logistics capabilities, and technical expertise give us a clear advantage in these segments. We are well positioned with true momentum ahead of us. I am now on slide eight. Portfolio management remains a key level of our strategy. 2025 was another year of active portfolio management with four acquisitions completed and two disposals, further sharpening the group's footprint and profitability profile. We've strengthened our footprint through the additions of Warshower and Schwing in the US. In Canada and Italy, we've expanded into adjacent higher margin businesses with Jack Ma and euros of turnover, while completing around 2 billion euros net of disposals. And in total, we've closed 21 acquisitions over that period, including four in 2025. And what I would like to stress is the quality and the direction of this M&A. Around 60% is in our core electrical distribution business, around 40% in adjacencies, where we see attractive structural growth and higher value-added opportunities. We have been particularly focused on North America, with 14 acquisitions representing more than 70% of acquired sales, including about half a billion euros in adjustment. And this is clear value creation. On average, we see value creation from year two, earlier than initially targeted. And our combined 2025 performance implies roughly seven times easy to ABDA multiple after synergies, below Rexel valuation multiple. And we also move forward on the other side of the portfolio with two targeted divestments completed in 2025. And these actions reinforce the robustness of our balance sheet and provide flexibility to continue investing in growth. Moving to slide nine, digital is a very tangible differentiator for Rexel, and it continues to gain traction. Today, we are a B2B leader in digital with more than one third of all sales going through digital channels. And this is not slowing down. Digital penetration has been progressing by between 200 and 300 basis points per year over the last 15 years. What's driving it is a mix of constant improvement in the customer experience with more tailor-made features, including AI-powered capabilities, plus continuous data enrichment, and also, frankly, a generational shift in how customers want to buy and interact. The benefits of this long-term effort are very concrete, and I believe this is one also of the explanation of our good set of results recently. Digital increases customer stickiness and share of wallet. It widens the service gap versus smaller competitors who have increasing difficulties following the pace of the race to more data and more features. And finally, it also improves the efficiency and productivity of our teams, which is critical to our business model. We know it's a key engine of differentiation in performance for Excel. Beyond the short-term environment, we are accelerating a set of deeper transformation to pave the way for future performance as shown on slide 10. First, we are boosting Salesforce productivity through organizational changes and increasing adoption of AI-based tools to help our team spend more time selling and improve the quality of execution. We're optimizing the supply chain through more automation, stronger internal synergies, and AI, improving service levels while taking structural costs out. Third, we are resetting parts of the cost base in lower profitability countries. This is about staying disciplined, adapting the model to the reality of the market, and protecting margins. Fourth, we are leveraging our full offering, expanding in adjustment for the categories and services where we can create more value for customers and capture more of their spend. And finally, we continue to roll out smart pricing programs that leverage data to improve consistency and value capture. Those topics are not all new to Rexel, obviously, as we constantly try to improve. But 2025 was a year of clear acceleration. First of all, because the business environment pushed us to move faster and sometimes think out of the box. And secondly, because we launched our new strategic plan, Accelerate 28. And most of those plans we are talking about are multi-year efforts, which means that you will see them progressively delivering benefits to our P&R. Focusing on the next slide on AI, AI is another area where we are moving fast, and it's not just, and I'm on slide 11, and it's not just running pilots, but now scaling real use cases into day-to-day operations. On the left of the slide, you see the main areas where we had identified clear AI opportunities. Tools to speed up RFQs, smart automation for order entry, automatic data enrichment, an internal category expert capability, customer-facing chatbots. And on the right, you see where we are today, not in terms of shiny proof-of-concept demos, but in terms of real adoption by the teams and real-life industrial life tools. In the U.S., more than 50% of the quoting teams, for example, are already using the new quotation tools. In France, around 25% of email quotes are handled through AI tools. And on order entry, we now have over 65% of U.S. teams and more than 70% of French teams using AI-powered tools. We're also rolling out internal expert capabilities by category, deploying customer-facing chatbots across additional countries. So the message here is simple. AI is already improving speed, quality, and productivity, and we're scaling it pragmatically, use case by use case. And slide 12 is about productivity, a major KPI for us. The message here is that over the last five years, we have lifted the baseline of what we are able to deliver in terms of productivity every year. What differentiates this cycle from previous downturns is the speed and depth of our cost adaptation. Through workforce adjustments, productivity initiatives, tighter cost control, we protected margins despite lower volumes, reinforcing the resilience of our operating model. Historically, between 2016 and 2021, our productivity ratio averaged around 0.9%. Over the last few years, it has stepped up, and in 2025, it reached 2.8%. This improvement is not coming from one single level. It's a combination of structural initiatives that I just presented, including the ramp-up of digital and the early impact of AI tools, together with rapid cost adaptation in more challenging markets. 2025 was another demonstration of Rexel's resilience at the bottom of the cycle. The key takeaway is that we are not just managing through the cycle, we are structurally improving how efficiently the group operates, which supports margin resilience and future performance. With that, let me now hand over to Laurent, who will take you through the detailed 2025 numbers, and I will come back for the guidance. Thank you, Guillaume, and good morning to all of you. Evening. Good evening, sorry. On this slide 14, you can see how momentum improves throughout the year 2024 and 2025. with a quarterly same-day sales growth trend at group level and the regional breakdown. We moved from minus 4.6 in Q1 2024 to a progressively better trend quarter after quarter, and we closed 2025 with plus 3.8% in Q4. That's a very clear reflection of better momentum, disciplined execution in the field, and better pricing management. First, selling prices contributed positively in Q4 2025, for 1.7%, improving compared to Q3-25. And more specifically, non-cable pricing were unchanged in Q4-25 at 0.9%, with improving trends in North America, mainly offset by China. Selling price on cable improved to plus 0.8, notably thanks to Europe. And briefly on geography that I will highlight in the next two slides, North America remains the main growth engine, growth accelerated through the year, and it did at plus 7.9% in Q4-25. And Europe remained difficult, but the trend improved sequentially, and we are back to flat sales evolution in Q4-25. And more specifically for Asia Pacific, accounting for 6% of group revenue, China was up 3.1%, supported by industrial automation project in a better environment, while selling price were just back to flat in Q4-25. In Australia, sales growth accelerated in the quarter, notably boosted by solar activity, further supported by subsidies on batteries. Lastly, India, which is small, but sales increased by plus 16.9%, driven by strong growth in our industrial automation activities. I'll now go into more detail in the next two slides on Europe and North America. So moving to slide 15, Europe remained impacted by a new construction environment and delayed electrification trends. Despite this, Rexel gained market share in its most important countries and delivered a resilient performance. 10% in Europe were flat in Q4, improving from minus 0.5% in Q3. Volume were broadly stable despite the political and macro uncertainties, and we also saw a sequential improvement in pricing in Q4 versus Q3, mainly driven by cable. And to put the underlying trend in perspective, our growth excluding solar, which represents about 4% of our sales in Europe, was up plus 0.5%. By end market, residential was flat excluding solar, which first sign of recovery in a few countries, notably Sweden and the Netherlands. Non-residential was broadly flat, and we saw slight improvement in industry. Let me highlight the main country dynamics in the quarter. France was up plus 3%, despite a challenging environment, with world-based market share gains and strong HVAC contribution. Benelux was up plus 2.6%, driven by electrical distribution activity in the Netherlands and the acceleration of solar growth in Belgium. DACH was a key offset, deteriorating sequentially on business selectivity in a difficult macro environment, although we continued to take market share in Austria. Sweden was flat, with a sequential improvement driven by industrial segment, and supported by a smaller drag from solar in Q4 compared to Q3. And finally, UK Ireland was down minus 6.7%. Ireland remained positive with a favorable industrial market, but the UK market stayed tough, with London showing the first sign of a recent investment. So overall, still a soft market, but improving trends through Q4 and continued market share gains in several countries. In this context, productivity initiatives help mitigate the impact of lower activity, and this position well to benefit from any market recovery, particularly as leading indicators in some countries begin to stabilize. On slide 16, we turn to North America, which remains the growth engine in Q4, driven by both volume and pricing, where we saw improvement in non-cable, mainly driven by piping and conduit families. First, same-day sales were up strongly in the quarter, with Canada driven the acceleration of Q3 2025, specifically in data center project as presented by Guillaume. We also benefited from strong continued market share gains and positive contribution in Datacom. And second, the U.S. continued to be driven by high growth verticals, particularly data center and broadband infrastructure, which represent more than 55% of the growth in the quarter. We also saw strong activity in solar and EV charging. By end markets, all three markets were positive, with non-residential clearly driving the acceleration and the industrial automation at 8%. Lastly, the backlog remains solid, representing 2.7 months of activity at the end of December. Moving now to the full year picture. I'll start on slide 17 with the bridge of our full year sales, showing how growth was built between scope, organic, ethics, and calendar. We delivered a full year 25 sales of 19.4 billion, up 0.7% on a reported basis. Organic performance was the main driver. As we saw, same day sales growth was plus 2.5% for the year. with volume contributing plus 1.2% and pricing adding plus 0.6 in non-cable and plus 0.7 in cable. So a solid volume contribution plus disciplined pricing across both cable and non-cable. M&A also contributes meaningfully. Acquisition added plus 1.8%, more than offsetting the minus 0.9% impact from disposals. These positives were partly offset by external factors. First, the FX was a headwind of minus 2.2%, mainly from weakening of the US and Canadian dollar, as well as a calendar impact of minus 0.5%. That was the sell bridge for the year, and we'll now move to profitability and margin performance. In this slide 18, we bridge our adjusted EBITDA margin year-on-year, and the key message is simple. Record productivity more than compensate what we call the delta inflation headwind. Adjusted EBITDA margin increased from 5.9 if we are 24 to 6% if we are 25. First, portfolio and ethics were positive, contributing 11 basis points, while the calendar effect was a drag of minus 5 basis points. Second, you see the operating leverage slightly negative, mainly due to the mute European environment and the under-absorption of fixed costs, notably in underperforming countries, mitigated by positive operating leverage in North America. Third, the main headwinds in the year was what we call the delta inflation, which represents the gap between selling price increase and OPEX inflation, a 19 basis point headwinds, in line with our expectations. First, inflation was around plus 2.2 in the year 2025, while selling price increases were up 1.3%. And this headwind was more than offset by the two following actions. First, the gross margin improvement, adding nine basis points supported by pricing initiatives. And second, our action plan delivered a further 33 basis points, in line with the expectation and already illustrated by Guillaume in the slide dedicated to productivity. Let me remind you that FT were down 2.3%, while volume contribution to sales were up 0.7% in actual days. That operating discipline is what allows us to protect and slightly expand despite inflationary pressure. Lastly, and we are further investing in the business, notably through digital and footprint investment that impact our EBITDA margin by 11 basis points. On slide 19, we look at the bottom line part of our P&L with a zoom on other income and expense, financial expense, tax rate, and recurring net income. Other income and expense to that 56 million euros, notably including Minus 41.1 million euros in restructuring, mainly in Europe. More than last year in order to accelerate adaptation to a tougher environment, notably in UK and Germany. 36 million of capital gains on disposal. Minus 29.7 million in asset impairment in the UK. Minus 20 million in others, including integration costs and pension settlements in Canada. Financial expense stood at €214 million, slightly above last year, with a rise in gross debt offsetting the lower cost of debt now at 4% versus 4.4% last year. It includes €72 million of interest on lease liabilities and pure financial costs of €142 million. And for 26, we anticipate financial expense of circa €215 million, including less than €70 million of interest on liabilities and around €145 million of pure financial expense, excluding one-offs, and assuming current interest rate conditions remain unchanged. Our income tax rates stood at 30.2% due to the impact of the exceptional tax in France, And going forward, we anticipate the tax rate to be at circa 30% in 26, taking into consideration the additional tax in France that will apply for the second year. And for 27 onwards, we anticipate then the tax rate to go back to circa 27% in the absence of exceptional tax renewal in France. And as a result, net income increased by 73%. and recurring net incomes to that €308 million, up 2.4%. Moving to slide 20, we generated robust cash flow for interest and tax, reaching a high level of €938 million, implying a free cash flow conversion rate of 76%, well above last four years' average, that's 2.69%. This is excluding the 124 million fine imposed by French tax authorities and paid in April 25. The trade working capital as a percentage of the last 12 months of sales increased to 15% versus 14.6% last year, mainly related to the sales growth acceleration in H2 and mainly Q4. In number of days, embedding the last three months of sales, both inventory and receivables improved, and were partially offset by lower payables. Indeed, the DOI and DSO decreased by respectively 1.5 and 1 days, and DPO was down two days. Non-trade working capital was on the inflow of 24 million, or an outflow of 100 million, including the payment of the 124 million fine. CapEx remained disciplined at 136 million, with growth CapEx representing 0.7% of sales, stable versus last year. So overall, we converted earnings into cash at a very strong rate, supported by tight working capital and disciplined investment levels. On slide 21, I want to come back to free cash flow conversion profile over the last five years, a key proof point of the quality of our execution. As you can see, we delivered a record level again, above 70% for the third consecutive year. The 7.6% conversion rate is at the top end of what we had delivered in recent years, and clearly above our full-year guidance of above 65% and our mid-term ambition. And this performance is a result of two very disciplined executions. First, a well-balanced investment approach, with roughly 55% of our capex in digital and about 45% in network and supply chain modernization. Second, active working capital management, as we have seen, especially the quality and structure of inventory and receivables. Overall, this strong cash generation built on repeatable levels supports our financial flexibility going forward. As shown on slide 24, our capital allocation focused on both acquisition and return to shareholders. Overall, net debt slightly increased by 147 million euros, mainly resulting from two factors. First, the 227 million euro impact from net financial investments, mainly the acquisition of Sparshower, Schwing, Jacquemart, and Technobi mentioned earlier by Guillaume. Second, the dividend payment related to the 2024 performance for €355 million, corresponding to €1.20 per share. Lastly, we also bought back shares for €100 million, in line with our mid-term objectives. And since mid-2022, we bought back €400 million and reduced the number of outstanding shares to €296 million. All this leads to net debt close to 2.6 billion, including earn-out for SICA 30 million, and the indebtedness ratio stands at two times, representing a strong achievement. In short, we continue to invest in value-creating growth while maintaining healthy balance sheet and a consistent return to shareholder. Let's turn now on slide 23 to the breakdown of our main debt maturity and liquidity. 2024 was a very active year in terms of refinancing. In addition to all operations presented in H1, the second half was also intense, and we further extended our debt maturity profile. As a reminder, we have first issued a new €100 million shulchan in July with a 29% maturity, second issue of €400 million senior notes with a 4% coupon maturing 2030, So they extended two securitization programs for more than 800 million from 25 to 28. And finally, we increased our senior credit agreement by 200 million to 900 million and extended it to 2031. So overall, we have a well-balanced funding structure, extending maturities, and comfortable liquidity. And we can stay focused on executing the strategy. As always, we are evaluating market opportunities in these volatile debt market environments. Moving to the next slide, we summarize our shareholder return through the dividend. For the year, the Board will propose a dividend of €1.20 per share, maintaining our strong track record. This implies a payout ratio of 52%. which is at the high end of our guidance and reflect our confidence in the resilience of the business model and in our cash generation. Subject to the General Assembly approval in April 22nd, 2026, the dividend will be payable in cash on May 13th. So overall, we remain fully committed to a disciplined capital allocation policy, combining value creation growth investments and an attractive return to shareholders. Let me hand back to Guillaume before we move on to your question. Thank you, Laurent. And let me now turn to our outlook for 2026, and let me go to slide 26. It's a busy slide, but it illustrates also well the way we see the short-term future. Many moving parts, a good level of uncertainty, but probably overall more encouraging trends than the opposites. Starting with North America, prospects are clearer, and we continue to expect further growth. Of course, there are still macro uncertainties, including around tariffs, and we see less traction in some electrification solutions. But structurally, the key growth engines remain in place. We expect continued progression in data centers, and we are also seeing more positive signals in industrial automation, supported by reshoring and the One Beautiful Belt. In Europe, the environment is still challenging. Construction remains near the trough, and confidence is not yet back. That said, we see more and more encouraging early indicators, and we do expect improving trends, especially in the back part of the year. The comparison base becomes easier for electrification. The lower interest rate environment is starting to improve. And as I said, we see leading indicators in residential improving. And in Germany, finally, the infrastructure plan could begin to materialize later in the year. On pricing and inflation, we still expect OPEX inflation to remain slightly higher than selling price increases. At the same time, we should benefit from the carryover of 2025 pricing in the U.S. We may also see additional price increases reflecting the recent rise in copper and silver, but it is a little bit too early to tell with certainty. And finally, self-help remains a very important part of the equation. We will benefit from the carryover of actions already launched, and we have also new initiatives to implement in 2026. So overall, North America should remain solid and supportive. Europe should gradually improve. And in all cases, we stay focused on execution and self-help to deliver in an uncertain environment. Which brings us to our full year 2026 guidance on slide 27. On the top line, we expect same-day sales growth of 3 to 5%. On profitability, we guide for a current adjusted EBITDA margin of around 6.2%. At this stage, we still expect a slightly negative inflation gap with cost inflation running ahead of selling price increases, although improving compared to 2025. And that will be offset by a clear set of costs and productivity initiatives, including the continued rollout of digital and AI tools. In addition, copper price rose sharply recently. Of course, as a distributor, we will pass the price increases from suppliers. We don't know yet how much price increase will be passed by those suppliers. And we believe that the situation may vary by country, by suppliers, leading to progressive price increases. We prefer to be cautious that it is very early in the year, which means that we took the equivalent in terms of copper of an $11,000 per ton price of copper to design this guidance. And we will adjust during the year, depending on the evolution of the situation. And finally, on cash, we are guiding for free cash flow conversion now above 65%, reflecting our discipline CapEx policy and continued focus on working capital. So overall, our 2026 guidance reflects continued growth, resilience margin through self-help, and strong cash generation in a global environment that remains marked by a little bit of uncertainty. Turning to slide 28, before we conclude, I think it's worth taking a step back to consider how Rexel's ongoing transformation has taken root over time and is still ramping up. Building on foundations laid in 2010 to 2019, particularly when it comes to digital penetration, we have been broadening and accelerating our transformation since 2020 to more dimensions of our operating model. We have raised the bar on operational excellence with more standardization, automation, discipline and execution. We have also made portfolio management much more active, using bolt-on M&A and selective disposals to improve the quality of the group. In parallel, we have scaled advanced services and focused more on the markets where we see structural acceleration, electrification, energy efficiency, and of course, data centers and datacom. And now we are entering a new phase where AI-boosted tools are becoming a real game changer in customer experience and productivity level, not a concept. What matters is that these levers reinforce each other. Stronger digital, better operations, a sharper portfolio, more value-added services, and higher productivity. So when we talk about Accelerate 2028 and our medium-term ambitions, it's the continuation and acceleration of a transformation that has been underway for years. The Accelerate 2028 plan is now fully underway, and as I said at the beginning of the presentation, 2025 was a very busy year in number of new initiatives launched. This gives us great confidence in our ability to deliver on our mid-term ambitions, even in a less supportive market environment than I am now on slide 29. Since 2024, when we issued our mid-term guidance at our Capital Market Day, What has first changed is the market backdrop. The macro cycle recovery has been delayed. We faced a delta inflation headwind in 2024 and 2025, and electrification markets in Europe have been a little bit more muted than expected. But on the other hand, several factors are moving in the right direction, with some of them, many of them, being in our control. So first, we are leaning even more into high-growth verticals, especially data centers. Second, the adoption of GenAI is accelerating faster than we initially anticipated, and this will prove clearly beneficial to our business model. Third, we have reinforced our focus on cost initiatives and productivity across the group. And finally, pricing is more supportive in 2025 and 2026, with higher selling price increases coming from U.S. tariffs, pricing programs, and potential impacts from copper. So when you put all of that together, there are pluses and minuses, but the combination of that allows us to confirm our medium-term objectives. There's growth of 5% to 8%, including 2% to 3% from acquisition, an adjusted EBITDA margin above 7%, and cash conversion of 65%. In other words, the market is certainly not giving us a free ride, but the strategy and the self-help levels are stronger, and this is why we are confident in our mid-term ambition. And in a way, the fact that we now rely more and more on our own efforts on what is in our hands than on the market is an element of security that is good news for the future. So let me close this presentation with four key messages before we open the call for Q&A. First, 2026-2025 was another clear demonstration of Rexel's resilience through the bottom of the cycle, proof that our transform model is working. Second, The momentum we saw in Q4 in both Europe and North America that we continue to see in January has carried into early 2026, which gives us a very good starting point. Third, with the launch of Accelerate 2028, we are accelerating transformational change across the group from productivity and cost efficiency to digital and AI adoption to unlock our next phase of performance. And despite slightly less market support, we are keeping a high level of ambition and we remain fully committed to reaching our mid-term guidance. Finally, I'd like to finish by saying our teams have once again shown remarkable commitment and agility in 2025, and I would like to thank our employees, customers, and partners for their continued trust. Thank you for your time and attention, and now Laurent and I are happy to take your questions.

Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on the touch-tone telephone. To remove yourself from the question queue, please press star N2. Please pick up the receiver when asking questions. Anyone who has a question may press star N1 at this time. First question is from Daniela Costa, Goldman Sachs.

Hi, good afternoon. I have two questions, if possible, I'll ask them one at a time. But the first one is regarding the free cash flow. As you mentioned on the presentation, you've beaten your targets on free cash flow for a few years there. But you're once again guiding for around 65% on the conversion. Can you talk why you don't upgrade that target? and what would drive you back down to a weaker cash conversion than what you have had, for example, this year, excluding the charge. That's number one, and then I'll ask the other one.

Okay, thank you very much, Daniela, and thank you, first of all, to recognize the important effort that we make to optimize free cash flow and to deliver good performance. Now, you know, we have upgraded, in reality, the free cash flow guidance. You have probably noticed that, but we went to around 65 and then to above 65, which is the guidance that we are giving. So it's progressing. On this one, we prefer to be cautious because, as you know, the free cash flow delivery depends very much on the shape of the last part of the year. In a year of acceleration, which we experienced in Q4 2025, that's always a little bit favorable to free cash flow. And to the opposite, and we have seen that during COVID, for example, in a year of deceleration, the free cash flow in terms of transformation is always a little bit more challenged because of working capital at the end of the year. So there are many things in the free cash flow delivery that we master. Inventory and number of days throughout the years in average is something that we control well. CapEx is something we control very well. But when it comes to payable and receivables, because of this uncertainty, we prefer to be cautious. But you're right. Over the last three years, we have systematically delivered more than 70%. And in the last two years, more than 75%. I mean, I don't know, Laurent, if you want to add anything to that. Maybe on the CapEx side, we had years of more important logistic investments in the past where we were below this 70%. That's why I think, yeah, the above 65 is a reasonable target. But, you know, if the question is, does it hide anything in terms of additional expenses or additional capex that we would have in mind? No, not really. I mean, we feel that 2026 is going to be the same kind of profile in terms of capex as 2025. So, no, no, no particular. I don't know if it was your question, but I'm answering it.

Mm-hmm. Okay, thank you. And then just on these AI productivity benefits that you've talked about, I was wondering if when you planned your targets in 2024, was this what you were already foreseeing would happen in 2025? Or should we look at these sort of productivity improvements as over and above what you were expecting back then? And once the market comes, what should be the incremental upside to margin from these extra initiatives or extra productivity that you find if this is extra?

Directionally, I think you're absolutely right. This was not completely in our minds, not to this extent, when we did our initial mid-term guidance in 2024. So the benefits of that, which is the double digits in terms of productivity, will come on top and over that. We have productivity targets, but clearly, GEN-AI potentialities are probably adding a layer to those productivity targets. But to the opposite, as we showed on our slide 29, there are a few things which are probably temporary. I mean, when we're talking about delayed cycle recovery, that's probably something which you're right, in the long term, is going to come back. And the same thing about delta inflation headwind. But so at some point, it will come over and above. So if you're talking about the absolute potential of Rexel, mid-cycle potential of Rexel, Maybe that's going to be an additional benefit to what we get into in 2024, but I'm very focused on what we call mid-term, which was three to five years. And in this timeframe, I think this may be something which helps us offset potential macro delays. That's what we are saying.

Okay. Thank you very much. Next question is from Akash Gupta, JP Morgan.

Yes. Hi, Guillaume. Hi, Laura. I have two as well. My first one is on copper prices dynamics because when I look at movement in copper price in Q4, we had roughly 20% increase in US. We had 9% on LME. And when I look at your copper price dynamics, in Q4 of 0.8% that looks a bit lower than implied by changes in corporate prices. So maybe if you can talk about why it is not yet reflected in your growth rates And then when it comes to the outlook, and thanks for specifying that your guidance is on $11,000 per copper. So if we assume that the current level of 13,000 stay for the rest of the year, is it fair to assume that we need to add probably 200 basis points annualized to your growth rates? Thank you.

No. Yeah, first, I mean, the copper is not as mechanical as you see. What we got in the past is that the $500 increase in copper would drive around 0.4% of top line growth. But with the sharp increase in copper recently and in the current environment, and there are also SX components into that. What we see today is that the supplier, they are lagging effect to pass through the copper improvement to the cable price increase. And we turn also our inventory in two months, so there is also this lag. That's why at the end it will gradually come into our performance, into 26, and that the effect in Q4 is slightly lower than what you were calculating. Yeah, the wildcard is really very much what the manufacturers, what the cable manufacturers, and also what the other materials manufacturers, which include copper, are going to do with that. And in the far-away past, I understand that it was very automatic. It's been a little bit less the case in the recent past because of strong variations. And so we'll see what happens there. And as far as if things were completely automatic, what would it mean in terms of top line, I think your ballpark calculation is

probably approximately right maybe slightly high because laurent said that it's a five to four ratio uh but you know we are not that precise anyway so yeah thank you and my follow-up is on the growth guidance so at midpoint you are guiding four percent organic same day growth and can you break it down into what sort of volume assumptions you have assumed in in that calculation and uh when we look at the margin drop through uh is is the margin drop through of additional one percentage point growth from volume versus price is there any difference on the drop through on margins like let's say if we have one percent higher growth from volume would that have any different drop through than one percent higher pricing thank you

Yes. I mean, Laurent, do you want to answer on that? I mean, first, I will answer the easy part of the question, which is that the assumption is half-half. Now, Laurent, for the more difficult part, which is drop-through on volume versus drop-through on price, et cetera. No, but mechanically, the drop-through on price is a bit higher because the you have less variable costs, you have just the commission of the salespeople and some bonuses, whereas a drop-through on volume will include transportation costs and other costs, inventory costs, but then it's The drop-through on price is a bit higher. But that's not exactly the way we calculate our bips. We look at the drop-through on volume, and if we try to do a back-of-the-envelope math, if we look at 2025 to 2026, we look at, let's say, 2% volume. We say the drop-through on these volumes is approximately 20 bips, so that's beneficial. Then you have additional action plans. But on the other hand, as I mentioned in my comments, we also think that our inflation, which should be around, inflation of our cost, I mean, which should be around 2.5%, is going to be higher than the inflation that we assume in our gross margin and in our products, the price content of the gross margin, which is going to be around 2. So those two blocks should offset more or less each other and that's the reason why at the end of the day and you know the drop through on price is included in this calculation in this second calculation uh between uh inflation of gross margin and uh and uh and inflation of course so that's the reason why at the end of the day we are guiding for around 20 bits of improvement And to be specific, on the bridge 24 to 25 that I presented, to the point of Guillaume, on the operating leverage, so the drop-through is on volume only, the pricing part is in the delta inflation barrier. That's the way we do it. Thank you.

Next question is from William Mackey, Kepler Shriver.

Oh, good evening. Thank you for taking the question. We're surprised, Will. Sorry, yes. A couple, actually, maybe looking at the bridge again, you know, last year, well, in 24, you made great progress with your action plans in dropping out cost. In 25, I think you've called it out as 33 basis points. Could you put some color or financial color around the expectations for how the action plans in 26 should play out? It's obviously partly contingent on the market development.

Laurent, do you want to take this one? Yeah, it was quite heavier, and you have seen it in the restructuring cost that we have factored in 25. For 26, we expect to have a bit less restructuring cost, more in the 20 million range. so meaning that we will have at the end a bit less benefits in terms of cost saving. We have additional initiatives plus the carryover of the initiatives that we implement in the second half. The carryover is a bit less than 10 basis points and we'll have additional action next year, but we are in a year which we will grow on the top line So the productivity will more come from the volume than by the reduction of cost. So, I mean, the answer is approximately half of what we had last year. We did a lot of the heavy lifting last year, and I think we have now a lean cost structure ready for growth. But still, still around 10, 15 bits of cost savings. 15 bits. Thank you.

The follow-up would be related to the portfolio or the capital allocation more broadly. You know, two times net debt after a very positive year of free cash generation. And, you know, you've made great progress over four years with the portfolio development on acquisitions and disposals. But at this sort of level of leverage and with the portfolio today, is there much that could leave after Finland? And... What is the sort of target opportunity looking like?

Look, I mean, I will not answer your question, but I will give you a very general and worthy answer, which is that everything is under review all the time. Whenever we are in a situation where we think that we can improve a country or a business to our goals, even if we have to invest, even if it takes some time, we do it. But in some cases, and it was the case in most of the divestments that we have made in Spain, in New Zealand, in Norway, and in Finland, there are situations where we feel that either we will not get to it because of the competitive situation of the country or the business, or that there is a very attractive offer on the table from somebody wanting to buy the business. And then, you know, we are very pragmatic in terms of value creation. But our preference is to improve organically what we have in general. So which means that, no, we don't have immediate plans of selling something, but that everything is reviewed every year based on those criteria. One, are we able, do we have a credible plan to the Rexel goals, to contribute to the Rexel midterm goals? And two, is there a super attractive value creation offer on the table? So, you know, that's what we do. But at this stage, we have nothing in preparation in the next few months.

And on the buy side, how do you see the sort of valuation range and range of opportunities?

On the buy side, we will continue to be active in terms of acquisitions. We have a pipeline which is healthy those days. So you may see a little bit of that. We are talking small and mid-sized acquisitions. We are talking the same focus as we had in the previous years, which is mostly in North America, and mostly focused on the most value-added parts of the business, if we can, which are services, etc. But not neglecting the potential to do a synergistic consolidation acquisition. So I think you will see acquisitions in 2025, in 2026. If I had to bet, but it's always difficult to bet before the acquisitions are done, I would say that you're going to see slightly more than what we have done in 2025. Thank you very much. And in terms of multiple environment, look, I mean, the multiple environment is relatively rich. I mean, there is competition out there when it comes to acquisitions. But as you have seen over the last few years, and I think this is in the slides that Laurent mentioned, or the slide that I commented, in terms of acquisitions, because we are able usually to add a sizable amount of synergies, we were able, and that's not a forward-looking, but that's a backward-looking calculation, we were able to deliver an average multiple, which is around seven times. which compared to our current multiple, which fortunately in the same time has increased also to 10 times, is a good value creation. So we will continue to be disciplined on that to make sure that we continue to build this track record.

Good evening. Thanks.

Thanks. Thanks, Will.

Next question is from George Federston, Barclays.

Hi. Good evening, everyone. I just wanted to come back to the price versus cost dynamic that you've flagged. I mean, it sounds like demand is getting better, but you're still flagging this headwind for 2026. So I just wondered what the main reason is that you're unable to sort of match the cost inflation with prices, or is it simply just a type of thing? That would be the first question, please.

Let me be clear. When we are talking about that, we are not talking the price versus cost inflation. That's not exactly what we mean. On one hand, we have the price increases from our suppliers. And usually, we are very good, because it's our core business, passing through those price increases to the market. Here the pass-through is extremely good, if not perfect. But that being said, we cannot, if there is a price increase of 4% by supplier A, we cannot say to the market that the price increase is going to be 6%. We do not have this ability because those price increases are usually well known in the industry. Now, so that's one thing. This is a price effect that we get mostly by decisions of our suppliers about how they are going to go to the market. And now there is a second part which is completely separated, which is our own cost equation. In our SG&A, two-thirds of our costs are salaries. The rest is occupation costs with leases, etc. And that we also try to optimize, but we are also bound by different arrays of constraints, which are basically the average salary increase in the given country. We always try to optimize, but that's a little bit what it is. And what we are saying, for example, for next year is that we think that our OPEX inflation, salaries, rents, et cetera, transportation costs, is going to increase around 2.5%. And that as far as we see today, based on what we hear from our suppliers, but it's the early beginning of the year and it may change. We think that the price increases, which is the price component of the growth margin, is going to be around 2%. So to be clear, what we are saying is certainly not that we are not able to pass the price to the market, which is what I heard a little bit in your sentence. But more than, you know, this... Particular equation sometimes is very favorable when there is strong inflation in the industry because, for example, of shortages. And in this case, the salaries continue to increase with general inflation and the price of product is increasing by 5%. It happened to us in the past. And sometimes in other years, the price increases passed by the suppliers are a little bit more shy because they want to protect their market shares. And in this case, we have to work on our self-help action plans, productivity, et cetera, to offset that. That's a little bit the way it works and the way we try to explain it.

I hope I was clear. No, no, that's perfect. That makes total sense. Thank you. Then maybe just a question on the backlog in the US. I just wondered how much of this is data center versus projects in other end markets and just whether you can comment at all on how that backlog has evolved, sort of data center versus non-data center, if it is split like that.

Look, you're asking a question to which I was not prepared, unfortunately. I think I don't know. I don't know in the backlog how much is data centers, how much is the rest. What I know is that overall the backlog remains at the North American level very stable, higher than the historical average. with maybe Canada increasing a little bit, which may be the effect of data centers, and the U.S. being a little bit lower than Q3, but very incrementally. Now, what I can tell qualitatively is that on data centers, we have a good degree of confidence that we will continue to deliver a good growth rate. And when I say good growth rate, you saw that our data center growth was 50% for the year and more than that in Q4. We think that we can safely say that our data center growth next year is going to be at least north of 20%.

OK, that's super helpful, Colette. Thank you very much.

Next question is from Andre Cook-Nim, UBS.

Yes, good evening. Thank you very much for taking my questions. I'll just go one at a time. Firstly, on pricing, just to clarify what you said, if you talk about non-cable pricing specifically and then kind of low voltage and automation products, We've seen evidence of price increase letters being sent to customers by major suppliers in China, but your comments suggest that this hasn't happened in Europe, European countries, or in the US. Is that the case?

Can you repeat your last sentence, our comments?

Yeah, we've seen those press that kind of published letters to customers announcing price increases by major international and local vendors in low-voltage industrial automation in China. And from your comments, it sounds like this hasn't happened in France, Germany, Netherlands, UK, or the U.S., So I just wondered if that's the case, if I've got the right reading of that.

First of all, we think that we are going to see price increases during the year. We talk to suppliers and we feel that they are willing to increase price. Now, what we don't know is the extent of that and by how much it's going to be proportional to the copper evolution when it comes to cable, etc. So that's what we are saying. We are not saying that suppliers are not going to increase price. And as we said, we have a hypothesis of a price increase for next year, which is around 2%. Now, what I would say also is that the dynamics between the Chinese market and the other markets is totally different in terms of price. especially when it comes to industrial automation, has experienced a price war during the last two years, which is calming down in the second part of 2025. And it's not a surprise that the suppliers would want to catch up and to increase price. So I want to be clear, if my comments were read as We don't see suppliers wanting to increase price. It's not what I wanted to say. We think that there are going to be price increases, very clearly. We have evidence. I don't know if the letters were sent, but we have evidence of suppliers telling us that they will increase the price, very clearly. Now, the uncertainty is really about the quantum.

Got it. Got it. Thank you. question I had is along the lines of a couple of the sort of questions in the delta inflation or the inflation gap. I'm just trying to think about a macro sort of external scenario where you could have your margins expanding like really meaningfully by say 30, 50 basis points in a year and What would you need to see for that to happen? Does it just need faster growth than three to five for that to take place?

Look, I mean, that's very easy. If you look at the guidance for next year, we are guiding for 20 bps of drop through improvement and volume on a reasonable year, which is a 2% growth year. I think a 2% growth year is a reasonable average year. So that's one thing. And we are getting also to, as I said, 15 bps of cost savings improvement. So that's already 35 bps if you are in a balanced situation, which is going to happen on a given cycle between those two inflation figures. So right there, on a year like 2026, you're delivering 30. I mean, it's not done. I mean, we have to deliver it. but you're delivering 35 bits of improvement. If you have a little bit more growth, which is not crazy to think of when you think about all the prospects of data centers, electrification, et cetera, and the recovery in Europe, if you have a little bit more growth, you're going to easily get to 15. So I think it's not crazy to imagine a scenario like that, because what I should say is that when I look at the 15 bits of cost savings, I am quite confident that this is something which is sustainable on a yearly basis. You have seen our figures about productivity evolution. We are quite proud of what we have done in terms of setting the bar higher in terms of productivity. And when we come to cost savings, productivity is a good proxy of what we are doing. And we will continue to do that. AI is a potential help in that. So, yeah, absolutely. I mean, that's a good question because when you look at the 20 bits improvement between 25 and 26, you may think, okay, 7% is far away. But in reality, when we look at the prospects of a recovery in Europe, the prospects of having a normalization of this effect of differential between our cost inflation and the rest, We are quite confident. And when we look also at the acceleration of our action plans, we are quite confident about that.

That's really helpful. Thank you. If I may, just a very quick one. You mentioned solar and EV charging sort of pre-buy in the U.S., I think, is what the comment implied ahead of some regulation change. Is that something we need to – could you quantify that? Yeah.

Mostly on solar, I mean overall solar, if I look at the solar business, the solar business in the US grew by 4.2% in Q4 2025. which is the first time that we had, I mean, I think it's at a group level, it grew by 4.2%, which is the first time in many quarters that it grew, and that's because of this U.S. effect. Now, in the U.S., the situation is that There is on one hand some of the federal subsidies which are going to disappear at some point in the year. So there is a little bit of to qualify the project and it will be going to continue to go on for commercial projects during the year. And there is the fact also that there is also a lot of regulations which happen at state level and a bulk of our business is done in California, which means that on the other hand, I think California wants to try to offset that and to push solar. We'll see where it goes, but at the end of the day, we got good figures in solar into 425 and positive figures. Now, that being said, you know that solar today in our mix of businesses represents approximately 3.5% of our total sales. A few years ago, it used to be at 6% when there was a boom in Europe. We continue to see, we will continue to see growth in the future. Is it going to come back to 6%? I don't think so. Not anytime soon, but that's a little bit the situation.

Great. Thank you very much for your time.

As a reminder, if you wish to register for a question, please press star and one on your telephone. Next question is from Aaron Ceccarelli, Bank of America.

Hello, hi, good evening. Thanks for taking my questions. I have two, please. The first one is on Europe. The presentation you called out market share gains in a challenging market in France, but also in Austria. I was wondering if you can expand a little bit about how you think about the sustainability of these market share gains as we enter 2026, please.

Yeah, first of all, I'm always quite cautious about market share gains. Now, what I feel comfortable with is that those gains were not acquired by price. And you have seen that. I mean, we've been able to be quite disciplined in terms of margin overall at group level. But I can tell you that in France and in Austria, we didn't buy market share. We gain market share through better service and competition, through better value added that we bring to our customers. And you have to understand that our B2B customers, they are obviously focused on the price of the products, but they are very interested in the value that we can add and in the value that they can lose if the distributor is not providing the right level of expertise, service, etc. So because of that, I'm quite encouraged by the fact that it's going to be durable. Is it going to last forever? Certainly not. We have good competitors. They will do their homework. And at some point in the mid-term, they will rebalance things, probably. But right now, I think we are on the momentum, which is going to last for a few more quarters, I hope. And I have a good degree of confidence because of the way we have gained market share. Got it.

My second question is on your opening remarks. You mentioned several times good momentum in industrial automation in different countries. Could you perhaps expand a little bit on this topic and how you see industrial automation at the moment for you?

First of all, I should give you an example of where we are big in industrial automation. We are big in industrial automation in the US, in Canada, a little bit in Europe, in China and in India. And I can also give you figures. Our industrial automation business In Q1, Q2, Q3, Q4, in the US, which is the most important country, was minus 4, 1%, 3%, 8%. We saw a clear acceleration during the year of industrial automation. which is due to the fact that when you look at the recent publications, the ASM is now for the first time significantly above 50, which is a good sign. You have the clear effect starting to begin of the tariffs, which is triggering reshoring. We flagged since the beginning the fact that at some point it would happen. When I look at the prospects of the industrial automation suppliers, they seem to be quite encouraging also. So at the end of the day, what is happening is not a surprise. And because we are big in industrial automation in the U.S., we benefit from that. When it comes to other countries, I think we commented a little bit on China and on the price effect in the second part of the year. Now, that being said, in terms of volume, it continues to be relatively subdued. Let's put it this way. India is good, but it's small. And in Europe, the topic is the overall industrial investment, which is not great. The level of confidence in many countries in Europe, including China, in Germany and in France, which are two big countries where we have industrial automation, is not yet mid-cycle to say the least. So there is potential in there.

And if I may, just a clarification on pricing. Am I correct saying you mentioned 2% is coming from the suppliers, so the cable one, and then the remaining is going to be flat? Is that the guidance for the year?

No, we said 2% overall. including copper, including suppliers, including oil suppliers. No, no, no. We think that there is going to be price in almost all categories. It's going to depend once again of the specific category supplier slash country situation, but we think there's going to be price a little bit everywhere.

Yeah. Thank you very much.

Last question is from Eric Lemarie, CIC Market Solutions.

Yes, hi, good evening. Thanks for taking my question. I've got two. The first one, you mentioned at the last strategy update, you said roughly that 10% of the data centers market is addressable by distributors. Is it still the case today, or is it now more than 10%? And my second question regarding the The so-called acceleration businesses you presented at the last Capital Market Day this time, could you tell us the growth generated by these businesses in 2025 and maybe the weight in the sales from acceleration businesses?

Yeah, so I don't remember saying 10% of the market of data centers was addressable by distribution, and if I said it, it was more order of magnitude. I don't think that I had in mind precise studies saying that. What I can tell you is that, first of all, the proportion of data centers in our business is growing. When you look at North America, when you look at the U.S., I think it's North America, we are now at 7% of our business, which is data centers. So it's starting to be sizable. I mean, a few quarters ago, we were talking about 3%. We are now at 7%. The second thing I would say is that the range of products that we supply to the data centers industry is expanding. You know, we started with – and it may be particular to Rexar. Some other competitors may be more advanced than us, but I think we are catching up fast. We started with cable, and now we get a little bit more into more advanced things like switchgear, etc. Now, we are staying in the gray part of the data centers. I don't think it's going to be easy for us to enter into the white part of the data center, which is very much going direct or through specialized players. But, you know, we are expanding the proportion that we were able to address. And we're expanding that quarter after quarter, which, I mean, first of all, the opportunity is growing fast, and our ability to grab a bigger part of this opportunity is also progressing. I think on the acceleration businesses, I can give you the figure for Q4 because I have it under my eyes. I don't have the full year. Maybe I'll find it back for the next opportunity. Basically, the total business accelerators, including solar, HVAC, EV, industrial automation, data and utilities, is representing in Q4 30 percent of our mix. and is growing at 3.9%, which is very slightly above the overall growth of the group in Q4 2025, which was 3.8%. And so the fact is that data centers are not included in that. The data component is included in that, but data centers, because we try to be consistent with what we have given you in 2024, is not included in that. If I was to add data centers, obviously, we would add 3% at group level and we would add a 3% which grew in Q4 at north of 50%. So it would improve a little bit the accelerating part of it. And I think that's the beauty also of those acceleration businesses There are years where things are accelerating in solo, and then the next year it's going to be less good in solo, but it's going to be good in data centers, et cetera. And the good thing is because there is not one trend, but five or ten trends supporting the acceleration of our business, we're always going to see the benefit of that. I hope I gave sufficient answer even if I didn't find the full year result.

All right. Thank you very much. Can I ask a follow-up one?

Sure.

Yes. Can you mention that your range of products are expanding for data centers, but could you tell us whether Rexel will be well placed in your view for the future deployment of 800 VDC solution within data centers? Is it something that you will be able to... Can I come back to you later on that?

Because I don't have the answer to that. I need to talk with my teams. Thank you. Okay. Thank you.

Mr. Teixeira, there are no more questions registered at this time.

Look, I mean, thank you very much for your questions and your interest in Excel. As you can tell, we had solid results in 2025. We are proud of those results, and we think that we're entering 2026 with good momentum, both on the market side and also on our internal momentum side, so, you know, confident in the future. And we look to you for the Q1 sales in April. Thank you very much, and have a good evening. Bye-bye.