General presentation of Rexel :
The Rexel Group is the world's leading distributor of electrical supplies to professionals. With a network of more than 2,300 points of sale, it provides electrical products and solutions for residential and commercial buildings and infrastructures. Most of its turnover is generated in the tertiary sector, followed by the industrial sector and finally the residential sector.
Its market extends throughout Europe, but also in North America, Asia Pacific and Latin America.
Know the competition of the Rexel share :
- Schneider Electric: is currently the main competitor of the Rexel group worldwide and is positioned as a leader in many activities including the supply of electrical equipment. In this sense, it is essential to take into account its news if you plan to trade Rexel shares on the stock market.
- Sonepar : But it is not the only direct competitor of Rexel since another giant in this sector, the French group Sonepar, is threatening its market share. Through numerous acquisitions, Sonepar has been developing strongly internationally for many years. In addition, it integrated a part of the assets of one of its competitors, Hagenmayer, in 2008, which strengthened its international positioning. It currently has more than 2,800 branches in nearly 44 countries on five continents.
Strategic alliances set up by the Rexel Group :
- Imtech: Since 2006, the Rexel group has also been a partner of Imtech in various projects. They decided in 2010 to extend this partnership until 2013 and to develop their projects on a European level. Imtech then became one of Rexel's five major customers worldwide.
- Schneider Electrics: In 2012, the Rexel Group signed a strategic partnership with the competitor group Schneider Electrics to promote access to energy efficiency for the most disadvantaged populations. They have trained students from Taiyuan in China in energy-related professions. This partnership also received an award from the Strategic Alliance Professionals association in 2013 in Orlando in the United States.
The advantages and strengths of the Rexel share as a stock market asset :
First of all, the Rexel group's positioning on the world market is of course one of its main assets. Indeed, Rexel is the international leader in the professional distribution of electrical supplies for industry, commercial construction and residential building. Rexel holds more than 8% of the market share in this business sector.
We can also appreciate the distribution of the group's activities with regard to its various products. There are seven main product families, with electrical installation equipment accounting for more than 40% of sales, lighting ducts or cables each accounting for 20% of sales, security and communication, HVAC engineering, tools and white and brown products. This diversity of products provides the group with an interesting protection against the risks associated with one and the same type of product.
From a geographical point of view, Rexel's activities are also particularly well distributed. Thus, Rexel generates 56% of its sales in Europe, 43% in the United States and 10% in Asia. Here again, this gives it less exposure to the geographical risk associated with a single sector.
Also with regard to the Rexel Group's customers, there is an interesting distribution between the different end markets. Thus, the commercial building sector generates 44% of the Group's sales, the industrial sector generates 35% and the residential sector generates 21%.
The Rexel Group also benefits from a definite advantage over its competitors, as it generates more than two-thirds of its sales in markets in which it is either the leader or the second largest. We can also appreciate the very interesting rise in digital sales, which alone account for more than 16% of sales.
Finally, the Rexel Group is currently benefiting from a growth driver in energy savings and renewable energies, which are of course two sectors that have been booming in recent years.
From a strictly financial point of view, it should also be noted that Rexel follows strict discipline in order to reduce its level of debt, which is already bearing fruit.
Disadvantages and weaknesses of the Rexel share as a stock market asset :
First of all, we know that the sector in which the Rexel Group operates is a particularly cyclical one. The Group's activities are therefore closely linked to industrial investments and construction and renovation expenditure, which follow more or less regular cycles and are also dependent on the economic climate.
Another major weakness of the group is the fact that the oil and gas industries are currently experiencing a sharp decline in activity, particularly due to the fall in the prices of these raw materials. This also applies to copper, which is used in particular for the manufacture of cables. These various factors are of course having a negative impact on the Rexel Group's sales. We also regret the current sluggishness of the Chinese industry, which is one of Rexel's preferred targets.
Another economic event has recently penalized Rexel's activities. This is of course Brexit, which has caused the group's sales to fall by nearly 8% in 2017 and could further increase these losses.
Analysts also regret the lack of visibility on the company's results with few clearly established objectives and a slight decline in the dividend over the last few years.
Finally, shareholders and stock market investors were also disappointed by the medium-term postponement of the 6.5% margin rate that was initially planned for the 2016-2018 period, which leaves doubt as to the company's ability to meet its commitments.