Rexel – Inside the Q1 2023 Numbers

Rexel recently shared its Q1 2023 earnings, which appears to be good, even for North America and the US.

Inside the Numbers

• Globally, the business was up 10.1% for the quarter to 4.9 billion euros (1 euro = $1.10) or $5.439 billion on a same-day basis but 12.6% on a “reported” basis as there were more billable days in Q1 2023 than Q1 2022.
• Again, globally, “digital” represents 27.4% of sales. (Note, the term is “digital” and not eCommerce or from “website” as companies have transitioned to a broader terminology.)

Focusing on North America and the US …

• North America represents 42% of Rexel’s global sales.
• While the company reported North American sales increased by a whopping 17.4%, this number also includes 3.3%, to the positive, due to currency, and 4.4% or almost $77 million euro from Horizon, Buckles-Smith and LTL (Canadian transaction.)
• North America was up 8.7% to 2.072 billion or $2.286 billion with the US generating $1.705 billion euro ($1.88 billion USD) or 82.3% of North American sales. The US was up 8.6% vs Q1 2022.
• In North America, digital represents 18.8% of sales, an increase of 436 basis points.

US, Regionally…

• Gulf Central – up 25.7%
• Mountain Plains – up 23.7%
• Midwest – up 18.9%
• California – up 16.5%
• Northeast – up 10.8%
• Florida – up 8.9%
• Northwest – up 2.2%
• Southeast – down .7%
• Canada – up 9.3%

As to the “why” for the US market, according to Rexel, it relates to:

• Growth in their industrial business (which can also be seen with their increased focus on acquiring Rockwell distributors – Winkle, Horizon Solutions, Buckles-Smith).
• The winning of a USPS EV charging contract (but they don’t share the value or if it is for only the chargers or the entire BoM.).
• “Stable” backlog

As to why the disparity, especially when Northwest (Platt) and Florida are traditionally strong markets within Rexel (and yes, the Northwest had much weather this year), they don’t mention.

• Given the Mayer franchise, it is “surprising” that the Southeast was flat / down a little.
• Gulf Central benefits from the oil / gas industry rebounding and the commercial growth in multiple Texas markets hence, “a rising tide raises all boats.”
• The Mountain Plains area is experiencing growth in the mining sector as well as construction. Rexel could have had some data center and warehouse wins

And it could be that Rexel’s performance is improving or …

Feedback from manufacturers, reps, and distributors has not surfaced any specific reason for out-sized performance and Rexel is not receiving preference from switchgear manufacturers that would enable them to ship their backlog.

If you have insights into local performance, please share in the comments section (and you can share anonymously if you like) or email me and I can add without any name.

The high single digit performance in the US is good. The regional growth disparity is somewhat surprising, however, the revenues of their lowest performing regions, percentage-wise, are some of its largest regions dollar-wise.

But, it is interesting that, globally, they are projecting 2023 to be up, globally, 2-6%, hence the business reverting to the mean (mathematically) of historical industry performance.

With the overall US market coming off of being up 10% and projected by DISC to be down (excluding filling backlog!), is Rexel outperforming the market by that much in some of its markets?