Rexel Improves, AD Tops

As Q1 results roll in, we’re able to get a better perspective of the overall market, even if sometimes the numbers are surprising!

Rexel
There’s was a tv series called “The Venture Bros” and one of the episodes was entitled “What Goes Down Must Go Up” (and I confess, I’ve never seen it and was Googling something else) but it may be the perfect phrase for Rexel’s U.S. performance.  Rexel released Q1 results (click here) but given our readership, we’d prefer to focus on the U.S. results which, according to others in the industry, were surprising:

• Sales were up 2.8% on a “constant, same day basis” and would have been up 4.5% if their “wind” business had held up.  The growth is credited to the residential market and Rexel does not see much growth coming from the commercial market.  This tells us 1) they had a good amount of wind business that is no longer available due to lack of government subsidies (and we understood that much of this business was Gexpro) and 2) Rexel is residentially, and hence small to mid-sized contractor oriented.  This “growth” is inclusive of their Platt and Munro acquisitions.  Presumably they captured prior year from both companies, otherwise wouldn’t be able to compare apples to apples.
• The US gross margin is 21.9%, up 30 basis points and their EBITDA is 3.9% – good numbers for others to consider as a benchmark.
• The company reduced its headcount by 6, however, closed 9 branches over the past 12 months (March-March).  We knew they had closed a good number as manufacturers comment on this regularly.
• North American sales make up 34% of Rexel corporate.

The good news is that they didn’t continue to go lower, they had a positive number, reduced the headcount (total number of people) bleeding and improved profitability.  The bad news is that it is residentially-driven according to the report.  But it’s progress that they can build upon.

AD
AD recently shared their affiliates’ Q1 performance.  Overall, the electrical division’s members grew their business 4% on a same store basis to $2.9B (as an aside, think of how the $2.9B compares to other national chains … annualized, this is $12-14B taking into account seasonality … larger than any of the chains!)   Given the geographic dispersion of the membership, this indicates that the membership, in aggregate, may have taken some share given that this growth number exceeds both Rexel and WESCO’s reported quarterly performances (and we haven’t seen any numbers yet from Graybar, Sonepar or Crescent … and CED does not share.)

How do these numbers compare to your’s?