Rexel Organic Growth at 2.3% in 2Q

Paris-based Rexel reported sales of €3.7 billion (US$5.7 billion at current exchange rate) for the second quarter 2008, an increase of 27.3% over the same period 2007. The company reported organic growth of 2.3%. Profit was €196.9 million (US$306.5 million), compared with a reported loss of €30.1 million (US$46.9 million) a year ago.
 
For the first six months ended June 30, 2008, sales were €6 billion (US$9.4 billion), an increase of 12.9% from the same period a year ago. Profit increased 72.1% to €259 million (US$403.9 million).
 
Rexel experienced organic growth in all three geographic zones for the first half of 2008. In Europe, sales increased 2.3%, led by strong performance in Scandinavia and Germany. North America posted a 0.5% increase. In the same period, the Asia Pacific region posted organic growth of 8.5%, driven by an active industrial sector and solid commercial construction segment.
 
With activity slowing down in the construction end-market in the U.S. and several European countries, Rexel continues to focus on adjusting its cost base while accelerating gains from its enhanced European platform and allocating its resources to higher growth market segments,"Rexel CEO Jean-Charles Pauze said.
 
"The environment is going down, we know that, and we have been anticipating that in our guidance. We know it will be more difficult, we anticipate that, and we have been proving, particularly through the first-half result, our capability to be quite proactive and react to the situation."
 
In the challenging economic environment, Rexel worked to seize growth opportunities in such areas as key accounts and e-commerce, he said. In the U.S., sales focus was redirected to large retail accounts, government and education projects, and industrial clients in the energy and raw materials sectors.  
 
However, cost adaptation measures, including downsizing, were implemented in Europe and North America, with headcount reduced by 1.6%. These efforts will continue at the country level.
 
Integration of Hagemeyer
Disposal of Hagemeyer assets to Sonepar was completed on June 30, 2008. The asset swap between Rexel Germany and Sonepar Sweden has also been completed. The Hagemeyer assets Rexel kept are fully consolidated in Rexel's statements from April 1, 2008. Business acquired from Sonepar in Sweden is accounted for as from June 30, 2008.
 
Cost synergies on the purchasing and administration side were already being recognized in the second quarter, Pauze said.
 
"Clearly, the Hagemeyer deal is a possibility for us to reinforce our sustainability of business and give us new opportunities in some new countries and in developing key accounts,"Pauze said in an interview posted by the company through the EuroBusinessMedia site. "We have clear road maps for all the different countries and entities."