Status Update

Mar 26, 2021

Press Release

Good day and thank you for standing by. Welcome to the Rexel's CEO Transition Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. Ian Meakins. Please go ahead, sir. Thank you. Good afternoon, and thanks, everyone, for joining this call at pretty short notice. I'm Ian Meakins, Chairman of the Board And I'm joined on this call with Patrick, our Chief Executive Officer. As you've seen, we've made an important announcement This morning regarding Rexel's leadership, Patrick will be stepping down as Chief Executive later in the year and will be succeeded by Guillaume Teixier, We are very pleased to welcome to Rexel after a distinguished career at Sangobank. We thought it'd be useful to have this call We need to provide a bit of context on the announcement and let you ask Patrick and myself any questions you may have. First though, I'd like to reflect on Patrick's contribution Over many years that explain then explain the process we went through and also why we chose Guillaume. And then Patrick will explain where Rexel is on its journey, and then we can take any questions together. Firstly though, I'd like to thank Patrick for all he's achieved in his many years at Rexel and as CEO of Rexel. He is a very good CEO to work with. He is totally committed to driving the performance at Rexel, both short and long term, And he's a strong leader and has been extremely resilient throughout the COVID crisis and has managed with his teams To deliver a strong set of results in 2020 in terms of share, margin, digital acceleration, Profit, cash and of course, customer service and also a strong start going into 2021, which I'm sure he will continue to drive during the rest of this Under his leadership, the group has undergone a profound transformation. Patrick was instrumental in stepping up the group's digitalization, Repositioning it to benefit from supportive trends in energy efficiency and strengthening relationships with clients and suppliers, Enabling the group to outperform the structurally growing electrical distribution market. The company's very resilient performance in 2020 owes a lot To the strategic choices that Patrick and the teams made with full support from the Board. He set out a profitable growth trajectory. I'm very pleased that Patrick has agreed to stay on after Guillaume's arrival on the 1st September to work with him in the following months Thank Patrick on behalf of the whole board for his great contribution to Rexel. In terms of the process, as you know, Patrick was in The final term of his CEO of his of CEO is Rexel. And as he's nearing the Stasi retirement date, The Board began a search starting last summer for his successor. This search was wide ranging. We looked at both internal and external candidates assisted by an international executive search firm. In the course of the interviews, we met a number of potential candidates, including Guillaume, His profile, track record and personality impressed the Board. He met our demanding criteria, so we were keen to attract him to succeed Patrick. Therefore, we moved quickly once it became clear that we were both interested in concluding our process. We therefore decided to make him an offer in time to be able to propose Guillaume's appointment at our next Annual Shareholders Assembly on April 22nd, and we're very pleased that he accepted this offer, hence today's announcement. This also happened to tie in with the timings of his current employer. A few words on our choice. Guillaume was quite clearly the standout candidate. Hence, we accelerated the final stages of the process. He has a deep knowledge of B2B Distribution From his more than 15 years with Saint Gobain, where in his latest position he was CEO for Southern Europe, Middle East and the African region. He has international management experience as he was President of CertainTeed Roofing based in the U. S. And President of the Ceramic Materials Activity Worldwide. He has a proven track record of developing and executing strategies and plans that deliver accelerated growth and faster adoption of Digital Processes and Platforms. He has financial experience as he was Group CFO of Saint Gobain between 2016 2019 and he has strong leadership skills, values and vision to carry out the strategic road map. In summary, he has operated businesses like ours successfully and in the key geographies for Rexel. He has the proven ability to develop and execute strategies that generate growth and digital transformation. He develops high performing teams And he has the right attributes for us in terms of intellect, leadership, communication and personal values. And clearly, the Board is delighted that he will be joining us in the 1st September. I'd like to emphasize that this will be a very smooth transition process And that Guillaume is fully on board to continue the implementation of Rexel's strategic roadmap with the backing of the Board of Directors. Patrick will leave Rexel in much better shape than it was when he took over, and I'm sure that Guillaume will continue to build on this success. And finally, before I hand over to Patrick, and we all know Patrick well, his energy, enthusiasm and commitment has not changed at all during this whole process, quite the opposite. He will, I'm sure, continue to drive the businesses as hard as always with our teams to deliver the results we're all committed to for 2021, which is the platform Patrick, let me hand over to you now. Thank you very much, Jan. Thank you for your kind words. And allow me to say good morning to everyone on the call, because some of you are in the U. S. I would just share a few thoughts with you. I would be lying If I didn't say that this is an emotional moment for me and because I have lived and rest Rexel for now 18 months, 18 years. It looks like 18 months. And first as Head of France, then Europe and finally And more visible to all of you since 2016 as a CEO. Quite a journey, Lots of adventures and challenges, but at the end of the day, all my team and the people who were at the different step with me, Internally, my colleagues and also the Board members, we can all be proud What has been achieved and I can really say that I'm confident That a lot of point of no returns have been crossed so that I'm confident in Rexel's future. When I will be stepping down and pass over in September And also in the months beyond September where I will be getting the transition well done exhaustively and constructively to Guillaume. I will step down with a feeling of solid legacy with gratitude to the Rexel team And some pride without our urgency that I have set the company on new growth path and this is what counts. The company is on new growth path. The legacy because it's a different company and what's important for the future Then what we have achieved in the last 5 years and even more when I look back into 2,003 when I joined the group That we moved from a box mover to distributed relatively basic electrical products at that time. Today, we are a digitalized, data driven company. We offer the broad range of technological products, We have a range of increasing services and solutions in a very fast moving energy world. Our industry has changed dramatically and I consider that Rexel has been at the forefront of this transformation. The second notion is a gratitude to the Rexel teams, because this was a real tough, Long, but energetic collective effort across the group and the results we have shown over the past few years Could not have happened without a profound change in our way of working, in our mindsets and in the culture. And these are some pillar for tomorrow that the way we're working the mindsets and the culture It's really the one which give me confidence for the future. Never was this more apparent than during 2020, Which was de facto real life stress test. And what the team did And the team rose to the challenge in a remarkable way. I will just remember overnight, Technically, we electrified overnight. The entire work organization was redesigned. Faced with this unprecedented shock impacting both supply and demand, our entire community moved online, Mobilize to continue to serve customers and maintain the functional of essential services and buildings, including hospitals. I'm not sure you can measure how extraordinary this achievement is, and I am hugely grateful to the teams. And I wanted to be sure that everybody knows, but I wanted to be sure that everybody sees in that, That 25,000 employee of Rexel acting in such a move, it's really a change in culture, which Can resist to many, many happening in the marketplace. And then pride, Pardon, because I have set the company on new growth path, because Rexel emerges strengthened from difficult 2020, Comforted in its strategic choices it has made in the past 4 years. After having turned around the company, it belongs to the past, Devaged it more recently, refocused on customer every day for many years in a row, Made it more agile, proven last year and invested heavily in its digital transformation and it continues and continues every second day. Rexel now stands to harvest the fruits of this effort, obviously. It's a combination of all of this that continue to make the business running well. The company has a clear roadmap and all the ingredients to 16 in a new world that is emerging that offers great potential. We are supported by megatrends like the green energy, smart cities and more. And Rexel is fully multichannel. It has strong relations with clients, suppliers, it master logistics, it has a culture of customer service and it has committed teams. These words are not the ones that I described just to say how good I feel or how successful I was. No, These are the realities by which I'm so glad to tell everybody in this room, it's a solid Company, it has all the ingredients plus a favorable market, nothing, nothing will walk away. We have made the strategic choice with the right people. And for me, it's gratifying to see that payoff in terms of results and market outperformance. I will give you my very success and much pleasure proximity with our teams, Excellent relations with our suppliers and customer as much as they have enjoyed over the past 5 years as a CEO. And I will do everything which is needed in order to be sure that we will embrace with the same excitement, fun, passion and results. Results you can overpass. Excitement, I would like to transfer and passion in the same way. Late 2021 is the right time for transition. With a good start of this year, we have a good start this year, And we have a good strategy in place, which is being confirmed every day by when I see how the market react. Markets being our customers first, our suppliers and obviously our results. I have committed to ensuring a smooth and seamless transition with Guillaume to support the delivery of the 1st year of our midterm plan. And I will continue to lead the company over the next few months. Obviously, we will have the opportunity to further exchange with you when we present Our option number at the end of July, because the next the quarterly results like normally Laurent will do and the media results like normally I will do with Laurent at the end of July. And thank you for having for your attention from these words. And let's say, Jan will help me answer all your questions. Patrick, bravo. Well said, well said. Hello, can we then move to questions from anybody on the call, please? If you could just say your name before you ask the question, that'd be very helpful, so Patrick and I know where And we do have some questions coming through, so please bear with us while we compile the list of names. Do we have anybody on the line or did we got interrupted? No, I think we're just Patrick, I think we're just waiting for Ella to process the questions and then she'll feed them through. Okay. Ella, is that right? And your first request is from the line of Lucie Carrier. Please go ahead. Your line is now open, Lucie. Hi, good afternoon, gentlemen. This is Lucie Carrier from Morgan Stanley. I have a couple of questions both for Patrick and Ian. Maybe starting with Patrick. First of all, congratulation on your career at Rexel, which We'll end soon as per the announcement this morning. I know it's been quite a journey in the different function that you occupied. I think my question to you is, you spent 18 years at Rexel. You went through the LBO, the IPO, heading the French business, the European business and then becoming Group CEO. When Guillaume comes in, what would be your Focus, in terms of helping him in the transition, what would you tell him to help him manage the next step of the Rexel story? That's my first question. My most profound wishes is that I could give him From global to very detailed chemistry by which you detect things fast, so that you correct immediately When you look at certain components of the business, you are immediately on the right evolution where to look, where to act. It's this business is made of a lot of small details. But at the end, you aggregate the details to get to the results, Good or bad? And therefore, what I have learned in these 18 years is that there are things, certain ratios, It could be ratios. It could be certain trends. It could be certain mix. It could be certain developments, Which you can see very early if you watch carefully and then you make it right Fast, because it's permanent correction and adaptation and it's permanent to the market moving here and there. And therefore, and I'm getting prepared to take you all through all the situation you will face. And believe me, In 6 months' time together, we will have all the situations. He will be able to touch on every single deviations and kind of and reaction at the why and the how. Therefore, the transition has to be rather long, smooth, very operationally. And by the way, it's the same, whether it was under LBO, whether it's under Stock Exchange, under whatever it was, It's always the same ingredients. When they work well, then it goes well. If they diverge, Then it's time to react immediately. And therefore, I feel confident in being able to transfer All these components. And Lucie, it's Ian. I'd add in. I mean, the progress that Patrick and the teams have made In terms of improving, measuring, monitoring, customer service in the last 5 years have absolutely Being critical to the company. And I think as Patrick drives into the detail with Guillaume, I know that Patrick will be absolutely going through that as well. Lucie, you had another question? I should add one thing, Lucie, to be complete. Sure. It's not a cookbook. It's a detection and it has to do with people. And we know that The kind of business we are in, it's a matter of confidence that the people, what they are, how they read their business, how they act, But they have they need confidence in themselves in what the numbers are telling, but also in the direction they are going to. Because we have set the path in terms of digitalization, it's not something to be done, to be invented. It's something to be Operationally expanded the offer plan, the service level, Name it. I mean, I can take the 10 key blocks. They are all on the right track, well defined. Operationally, it's to go maybe a little bit faster than I was, because it's not the bubbling stage, it's the halving stage. And it's a matter of rolling them, getting them done, and I feel confident. Therefore, it's not a bad timing. Thank you, Patrick. Yes, I had a question for Ian actually, if I may. Ian, how I know you mentioned you spoke about that to some extent, but how should we think about the future of the strategy? Because Obviously, you will have a new CEO coming in 6 months with his own background and his own views about different topics maybe. How can we be sure You will be comfortable to defend the strategy that was presented a month and a half ago to commit to that. And also in you recruiting him, Which specific characteristic have you looked for in this new manager in terms of kind of benefiting or contributing to the future of Rexel. Lucid, a very good question. I mean, Firstly, the process that Patrick and the team and the Board went through in terms of developing the Capital Markets Day Presentation, the strategic roadmap, the updated roadmap that Patrick and the team laid out was very interactive, obviously, with Patrick and his management team, his executive team, all of his leaders, but also with the Board as well. So Point 1, there is complete alignment around the strategy and how we're going to go about executing this over the next couple of years. Secondly, clearly, as part of the process of attracting Guillaume, we discussed with him the Capital Markets Day presentation To make sure that he was comfortable and totally supportive and endorsing the direction of travel. Now to Patrick's point, clearly, Guillaume does not know the intricate details that have been put together by Patrick and the team, But that will be part of the handover process, so that Guillaume understands that. And look, you're absolutely right. Guillaume is bound to have Some slightly different views about the rate of progress in certain areas. Maybe he will want to invest even more in digitalization. Maybe he will want to invest more in the sales forces. That's absolutely what we'd be expecting of Guillaume when he comes into to challenge and think about How we can accelerate the progress towards the ambitions that we laid out in the Capital Markets Day. And in terms of thinking about Guillaume, look, he has a fantastic track record for us. He has managed businesses That are almost identical to us in different parts of the globe. He's also worked And managed companies in businesses that are in our key geographies, obviously, the States, Canada, Europe being the key areas for us. But also he's had global experience in the other parts of our geographies as well. I think Guillaume absolutely Has a great track record of delivering results and that was very important for us. But on top of that, a proven ability to develop strategies And execute them obviously in the digital world as well. We from referencing Guillaume, I'm obviously talking to Guillaume, but referencing him very hard with people that he had worked with. He's clearly talented at developing high performance teams. And we felt that he had the right mixture of intellect, leadership skills, good communication skills as well. And You know, critically for us as well, the values, he is a honest, decent, a man of integrity, like Patrick, and that was something that was very important for the Lucie, does that give you a sense of how we came at that? Yes. Thank you very much, Ian. And Patrick also, thank you very much for the very good working relationship for the last decade. Well, you will still have me for the next semester, the ongoing one, Lucie, and we will have pleasure to At the end of it and hopefully with even better than your expectations. Great. We're looking forward to it. Careful, I'm not sure. You can count on me. Good. Okay. And another question do we have? Thank you. Certainly. And we also have a question here from the line of Jeffrey Beliche. Please go ahead. Ask your question. Hi, good afternoon to you 2, and thank you for taking my question. Maybe firstly, yes, congratulations to Patrick on your remaining career at Rexel. And clearly, we hope you finish on a high. I guess my question is for Ian and Patrick as well. When we look at Jim Tichel's profile, could you describe in more details his experience around digitalization of the company? What you expect from him on that topic as well? And maybe a follow-up to that would be also his experience on M and A and maybe M and A around software acquisitions as well. Sure. Jaffee, let me have a go at that one. I mean, again, without digging into too much detail, I mean, As we talked with Guillaume, it was very clear that he had taken several businesses that were traditionally I hardly penetrated at all in terms of digitalization. I mean, obviously, the distribution business in France that he's been managing And had started the process and increased the penetration of digitalization across the whole of our business. And therefore, I think Guillaume would absolutely understand the path that Rexel has been moving down because obviously we have been moving down the path of Digitalizing the front end of the business, but also the work that Patrick has been doing at looking at how we make progress across the whole of the business. So it's not just The front end, it's the inventory management, it's the pricing management, it's the offer, it's measuring and monitoring and managing the customer service, On time in full delivery, all of these sorts of key components of our business model are now rapidly becoming digitalized. And Guillaume has shown a real aptitude to be able to understand and develop those sorts of processes In businesses that he has either directly managed or indirectly managed. In terms of M and A, clearly, I mean Guillaume has had vast experience when he was the CFO of Saint Gobain. He would have been the man central To the M and A transactions, both disposals and acquisitions. And he's a very skilled financial He's got a very skilled financial mind, but also a great commercial mind. So I would have no doubts at all that Guillaume would be very good at Addressing and tackling M and A opportunities, if I call it, in our existing business, But also because of his digital experience and M and A, the sorts of acquisitions that we announced 10 days ago, Again, those areas would be ones that Guillaume has absolutely tackled in the past, and he's got the right skill set to do that. Jeffrey, does that answer your question? Yes, absolutely. Thank you very much. Okay. If I may add 2 things. Patrick, yes. Yes. Never forget on digital, we have 100 data engineers and data scientists. We have people who have the deep knowledge of Business and how it interface to the business. We have developments ongoing. We have and all of this, It's not something that you have to start and restart. It's something which every day increase, meaning the skills are in the house And he can easily take these skills and bring them to the next step. Similar in M and A, Laurent, as a full team of M and A specialists, regularly we look at opportunities. We identified targets. It's not starting from scratch. There is a lot going on. And the last two acquisitions We are just could have been surprised to all of you because they were not in the traditional sector of distribution Because we are watching carefully, it's a landscape that we manage. There is a traditional landscape and there is the what I call the Complimentary landscape, as long as it fits to the strategy, and this is in the panorama of how we will enter into it, we will go with it And whether we will do before or when he will be with us, things don't stop. And hopefully, we could come a little bit Further down the road on both digital before and after it comes and both M and A before and after it comes. The train is on its track and rolling. Therefore, for him, there is no need to be an expert in everything. He comes in with good skills, with an open mind, with a willingness to succeed and then he will embrace and put his energy, But there is already a lot of substance. When I was saying before, I feel confident, it's because All these systems, skills, people, targets, landscape, ecosystem, they all exist. Very good point, Patrick. Okay. Jeffrey, is that okay? Yes, it was a very good answer. Thank you to you both. Thanks. Are there any more questions? There appears to be no further questions at this time. And we have no further requests at this time. Please continue. Excellent. Look, I really appreciate you all dialing in at short notice. Thank you For the kind words that you have absolutely said about Patrick, he has been and is a great CEO to work with. He and I have had some good times together, some good times together. But I think as Patrick rightly said, the company is in good shape. We went through 2020 well. We had a good start to 2021. And absolutely, the Board judges Having done a lot of work and we spent a lot of time on this, we absolutely know we've got a fantastic guy in Guillaume to take over. And therefore, now is the right time to have a good smooth succession. I know it's going to take Most of 2021 to make that happen. Personally, that's how I had succession planning Done and achieved in my old companies and it worked very well. So I'm delighted that Guillaume is joining us and also very pleased that Patrick He's staying around to support Guillaume, but with the roles of each of the gentlemen being very clear. Excellent. On that note, We will call it an end for the day. Again, thanks for everyone for dialing in. Many appreciate it. Thank you, each of you and all of you. It is always a pleasure to have a conversation, open discussions, and I look forward meeting you again in July with the June results. And if anything, in the meantime, Laurent and myself and Ludovic, we will be always delighted to take any call. Many thanks, Patrick. Yes. Many thanks. Bye bye. Bye bye. With that, we conclude the meeting today. Thank you for participating. You may now disconnect.