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2015 Activity and Sustainable Development Report10

2015 OVERVIEW AND OUTLOOK

2015: A RESILIENT FULL-YEAR PERFORMANCE In a persistently challenging business environment, Rexel posted a resilient full-year performance, with sales up 5.6% to 13.5bn on a reported basis and down 2.1% on a constant and same-day basis. The adjusted EBITA margin stood at 4.4%, while free cash flow before interest and tax was strong, with a conversion rate of 85% of EBITDA. In 2015, Rexel continued to optimize its footprint and streamline the organization around three geographies, Europe, North America and Asia-Pacific, while further upgrading its operational capabilities, most notably in the USA through the completion of its IT and logistics transformation program. The Group also moved forward with the execution of its asset disposal program and announced a few targeted acquisitions in line with its strategic priorities.

REXEL 2020 STRATEGY In February of this year, the Group presented Rexel s 2020 strategic plan at its Capital Markets Day in Paris. This plan presents a comprehensive roadmap for profitable growth and long-term value creation for all its stakeholders. In a rapidly changing world,

powered by new megatrends, technologies and applications, Rexel s unique market- leading footprint, genuinely differentiating customer-centric strategy, focused innovation in marketing, digital and supply chain and targeted accretive acquisition policy represent the four key business imperatives that will put the company at the forefront of its sector and create the conditions to seize future growth opportunities. The Group s 2020 strategic plan and ambition is part of a broader aspiration to create sustainable economic, environmental and human value for all of Rexel s stakeholders. Over the 2016-2020 period, Rexel aims to grow sales faster than the market by delivering average annual organic sales growth of between 1% and 2%, while increasing adjusted EBITA at least twice as fast as sales growth and continuing to generate strong cash flow before interest and tax, with a conversion rate of between 70% and 80% of EBITDA. In order to complement organic growth with external growth, the Group will focus on making targeted accretive acquisitions with a total budget of some 1.5bn over the five-year period, in line with its cash allocation strategy. This level of investment could generate cumulated additional sales of over 2bn. Rexel will also continue to pay out an attractive

2015 overview and outlook

by PATRICK BERARD Rexel Group CEO