Good evening. This is the conference operator. Welcome, and thank you for joining the Rexel GCG Acquisition conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Guillaume Texier, Group CEO of Rexel. Please go ahead, sir.
Yep. Good evening, everyone, and thank you for joining us on such short notice. I am here with Laurent Delabarre, our CFO, to comment on the acquisition announcement that was issued earlier today and answer any questions you may have. As you have read, we entered into an agreement with Audax Private Equity to acquire GCG, a U.S.-based specialty infrastructure platform. This is the fourth acquisition of Rexel this year and also the most important one in a long time. More importantly, we see that as an important strategic move for Rexel, and this is what I would like to detail before Laurent covers the financing of this transaction. Let me right away start on slide two with the strategic why. This transaction is really at the heart of three transformations we have strived to push to make Rexel a high-performing company.
First, it strengthens our position on markets and geographies that are a high priority for us. We are strongly reinforcing our U.S. footprint and leadership with solid growth potential, adding a platform of about $1.1 billion in sales. Following completion of the transaction, North America will represent, for the first time, more than 50% of the group turnover. As a reminder, in 2021, this figure was 35%. We are also, and it's worth noting, more profitable today in North America than in the group on average, which makes this evolution globally a relative one. Also, you will see that GCG is positioned on fast-growing segments, which adds to the attractiveness. We are acquiring strong and diversified positions in markets such as data centers, grid modernization, infrastructure, or defense, where investment is structural rather than cyclical.
For those following us, you know that our strategy since many years has been, and will continue to be, to focus our efforts on those particular submarkets which are presenting the best acceleration opportunities. Being more exposed to those electrification mega trends makes us a faster-growing company and more resilient throughout the cycles, which we are seeing, by the way, in our results this year. Our ability to add unique value to our customers beyond the traditional distributor role, and thus to foster stickiness and profitability. GCG has developed very impressive capabilities, which will represent a step change in this direction. In summary, the GCG acquisition ticks many key strategic boxes for us, and it is also a financially attractive transaction, and I am moving here to slide three.
As you can see in the first box from the top, the acquisition will be accretive from year one, despite the fact that there will be an equity component in the financing scheme, and I will come back to that. It is also value creative with a ROCE above WACC by year three. Importantly, it is also accretive to our EBITDA profitability, our most followed KPI, by more than 20 basis points, because of the comparatively high level of profitability generated by GCG's high touch model. All of this is made possible by a high level of cost synergies, which comes from various sources, logistics and purchasing optimization, back office optimization, use of Rexel's digital or AI tools. I am not going to give any figures here, but what we have identified puts us in the high range of what we usually deliver in such acquisitions.
That is not even counting the potential cross-selling synergies, which we have decided not to include in our calculations, but where the potential is very important. As a consequence, the acquisition multiple is very reasonable for a business with this level of growth and profitability less than 8x EBITDA. Here I am talking multiple post run rate synergies. That obviously compares favorably to Rexel's own multiple, which is all days double digits. Finally, we are financing this $1.4 billion EV in a disciplined way with a mix of cash in hand and debt for 2/3 and 1/3 of equity. By doing so, we will keep a healthy balance sheet and maintain a leverage by the end of 2027 around our midterm target of 2x .
This is both a choice of caution at a time when geopolitical and economic circumstances remain a little bit uncertain, and also a choice of ambition as we want to keep good margin for maneuver in a fast-growing market. After this very long executive summary, let me get into what GCG is about. I am here on slide four. It is headquartered in Chicago with in-depth presence across the U.S. territory and has close to 1,000 employees. It is expected to exceed $1.1 billion of revenue in 2026, achieving a compounded organic growth of about 11% annually since 2019. Driven by the highly attractive end markets and secular megatrends that the GCG's portfolio is exposed to. On the left-hand side of the slide, we show you a split of GCG's revenue by end markets that will be supportive to current Rexel positioning.
It is a very balanced portfolio while adding strong exposure to the long-term trend without depending on one end market. To pick a few, data centers, which account for 21%, would reinforce our positioning in this industry and give us more access to the wide space. Power and utilities, as well as defense, are also strong markets as they represent 18% and 11% of their revenues, and it will help Rexel open new doors. With regards to telecom, at 10% of GCG revenue, it really complements what we built with our existing Talley platform. Given the value-added services and solution it provides in terms of profitability, GCG commands an EBITDA margin premium that is expected to be at about 11% this year. Let us move to slide five, where we highlight GCG's strong added value addressing customers' most complex needs.
Now think about a contractor or an EPC building a data center or a substation today. Skilled labor is scarce and expensive. Schedules are aggressive. Specifications are increasingly technical. Mistakes on site are particularly costly. GCG's answer is to move work away from the job site and into its own facilities before the material is shipped. It does this at three levels. First, it engineers a solution upstream with the customer, design, specification, sourcing. That means GCG is involved very early in the project, often before the bill of material is finished. Second, it builds custom solutions, cable assemblies, harnesses, multi-conductor builds, including complex low-volume runs that others wouldn't want to do. Third, it enhances standard product to specification, striping, over-molding, cut to length, spooling. The customer receives something which is ready to install.
The result is that the customer saves time and labor, and GCG becomes part of the project rather than just a supplier. Those relationships are much stickier and much less price-driven but more value-driven. Let's make this concrete with four real customers critical programs on slide six. In power and utilities, GCG supports a major energy provider on a 2-GW build-out for hyperscale customers. With its engineered solutions, installation takes about 60% less time than a standard duct bank. The customer has come back again and again, and the fifth project is underway, and five more are identified. So the repeat business is what we value. In data centers, second example, a major EPC is running its fastest hyperscale program to date. GCG moves complex electrical assembly into its own prefab facility, and equipment is powered up on-site about 10x faster.
In a tight labor market, that takes the customer-critical path out of risk. In naval shipbuilding, the relationship goes back 25 years, and GCG covers the full wire and cable requirement of a major shipbuilder and supplies ready-to-install material. The yard no longer needs inspection, storage, or cutting waste. Last example, in utility-scale solar, GCG delivers the full DC collection package on two projects at the same time. It is four to eight weeks faster than usual, and scarce field crews are freed up. The common thread here, GCG saves time, certainty, and labor savings. Now, if we move to slide seven, I already commented on the left part at length on the financial attractiveness of the operation and the value creation profile of GCG in my introduction.
I'd like to focus much more on the chart on the right, which puts this deal in perspective and shows that GCG is very consistent with how we have been trying to reshape the Rexel profile through M&A. The vertical axis shows the exposure to high-growth segments, and the horizontal axis shows how much value added the business carries. Deal after deal, if you remember, we have moved Rexel up and to the right, and in parallel, we have refocused the portfolio on our core regions. GCG is the furthest step in that direction. It has the strongest exposure to structural growth markets and the deepest value-added content of any business that we have acquired recently. It follows the same logic as our previous deals at a larger scale. We will keep transforming the portfolio towards faster-growing markets and more value-added services.
Laurent will now explain how we are financing the deal while preserving our balance sheets and our capital allocation priorities. Laurent?
Thank you, Guillaume. Good evening, everyone. Let me detail the financing plan and our capital allocation strategy on slide eight. The enterprise value is to that circa EUR 1.3 billion, and we will be financed through a mix of cash, debt, and equity. About EUR 800 million will come from cash on hand and new debt. The debt financing is fully underwritten, so there is no financing risk to closing. Alongside this, we intend to raise up to EUR 500 million of equity through an accelerated book building subject to market condition to preserve our credit rating, as we don't want to stretch the balance sheet given the current macro environment. The equity amount is limited, and it is sized to keep leverage at around 2x net debt to EBITDAaL from 2027 onwards. With that, we will maintain our well-balanced capital allocation strategy.
We will keep pursuing self-funded value creating acquisition, and we maintain our dividend policy with a payout of at least 40%. In term of timeline, closing of the GCG acquisition is expected by year-end 2026, subject to customary regulatory approvals. Guillaume, back to you to conclude.
Thank you, Laurent. To conclude, let me come back to three or four points, which I find very important. First, we are acquiring a unique model. GCG is a value-added solutions provider serving mission-critical applications with engineering depth and proprietary products. Assets like this are rare, and it is ready to scale with Rexel. Second, it strengthens our focus. The deal concentrates the group further on our core geographies and in North America in particular, at the heart of the data center grid and electrification trends. Third, we do it very responsibly. The balance sheet stays robust, our rating is protected, and we maintained a balanced capital allocation. Taken together, GCG gives Rexel a secure and accelerated path to our midterm financial objectives under Axelerate 28, and we are very excited to welcome the GCG teams to Rexel.
Thank you for your attention, and Laurent and I are now happy to take your questions.
This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and One on their touch-tone telephone. To remove yourself from the question queue, please press Star and Two. Please pick up the receiver when asking questions. Anyone who has a question may press Star and One at this time. The first question comes from Daniela Costa with Goldman Sachs. Please go ahead.
Hi. Good afternoon. Thank you for hosting the call. I have three questions. They are fairly brief each, so I will ask them directly here. First, can you talk a little bit more about the synergies? What is the amount of synergies, and how does it split revenues and costs? I might have missed it in the presentation.
Sure.
Second one, can you talk about what is the peak-to-trough margin of the asset? I think you said obviously 11%, but we have been in a pretty good growth environment for those end markets. Just give us historical idea when we are maybe sort of not at the peak of the cycle, what were their margins. Then the final thing, just can you comment on your buyback?
On what?
The buyback.
Okay.
Yeah.
Okay. Synergies. What I have said is that, I have not detailed, I have not given a number in terms of synergies, but I have said that first of all, and I want to be clear on that, in our calculation and in our evaluation, in particular of the multiple post synergies, we don't take into account revenue synergies. We think that those revenue synergies are important, but in our experience, the timing to unlock those synergies can depend very much from acquisition to acquisition, and we prefer to be cautious on that and not to take them in our calculation. We are talking here only cost synergies. What I have said, even if I have not given a number, is that what we have identified is in the high end of what we deliver usually in terms of percentage of sales.
We have done 26 acquisitions, and you have a good sample of what we have been able to deliver. Now, in terms of what it is exactly that we are going to do, this is the typical optimization thing, where, for example, they're going to be able to leverage our size in terms of back office services, et cetera. We're going to be able to optimize logistics because of our footprints. We are going sometimes to optimize a little bit real estate. We will be able also to optimize purchasing in some cases and to leverage our size. All those things. This is what mostly we are talking about in our calculation. Peak-to-trough margin. I think, if I remember well, it's relatively stable.
It is relatively stable, and even though you are right that the market has been relatively good over the last few years, it has been progressing, but not in a very meaningful way. I do not have a figure to give you. Laurent, I do not know if you have it. But it has been relatively regular, and the reason for that is that GCG is providing value added, which makes, at the end of the day, the business much less commodity-oriented than what you would think about a typical cable distributor, for example. Laurent, do you want to say anything about that?
To your point, there is not a big gap between the lowest and where they stand today.
Share buyback. That is a good question, Daniela. Obviously, as we are going to do up to EUR 500 million ABB, we are going to discontinue share buyback for some time because it would not make sense, it would not be logical to continue to do share buybacks in the same times as we are issuing new shares at a discount. But that being said, it is a discontinuation which we will decide in due time to continue or not, depending on the share price evolution.
Thank you. Your main shareholder is participating in the equity raise?
That's going to be their decision when the time comes. They are going to be like any other shareholder solicited. I think we have written in the press release that the decision of the board on the operation was unanimous.
Got it. Thank you so much.
Question comes from William Mackie with Kepler Cheuvreux. Please go ahead.
Thank you for the presentation, and congratulations on securing the deal. Good evening, Guillaume and Laurent. A couple of questions. The first one would go to starting at the beginning. Could you give us a little background for the deal? This isn't Audax exit, so was it the deal orchestrated in a bidding environment, or was it a selective process? How did you arrive at the conclusion that we see today, please?
It was in between. We were in contact with Audax since many months, I would even say, if I remember well, since more than a year to talk about what the options could be in terms of the exit of GCG. At the time when Audax decided to consider an exit, they started a semi-competitive process where they isolated a few strategic buyers to organize a bidding contest between them. That's a little bit the thing, but I guess the main point for me is that we were interested in this asset since a very long time. We felt that exactly for the reasons that I'm mentioning, the exposure to fast-growing market, the reputation of the teams as well as the value-added components, it was something which would complement very well the portfolio of Rexel in North America.
I hope this gives a little bit more color to the acquisition.
Thank you very much. Just glancing over the business, there is, at first sight, a lot of cable. To what extent is there a high material content related to plastics or copper in the business? How should we think about what you're acquiring and the 11% margin to the extent that it is a commodity pass-through as opposed to a value-added business-related model?
I think we have obviously looked in detail into that. GCG's underlying copper sensitivity is substantially lower than a traditional cable distributor. We estimate if we do the math, that the overall copper sensitivity of Rexel would increase by less than 2% from around 15% today to 17% after the acquisition. Also, in the past, because of the nature of its business, and that's what I was explaining to Daniela, GCG's profitability has proven very resilient to copper variations. Finally, we overall estimate that the sensitivity to copper is relatively moderate compared to what you would imagine from if it was a commodity distributor. In an environment where we don't know where copper is going to go, but mid-term, we feel that it's going to be a market which is going to be more under tension than the opposite, which obviously doesn't rule out short-term variations.
But long story short, we don't feel that the sensitivity to copper is that high.
Perfect. Thank you. The last one, on the slides you mentioned the ROIC is going to exceed the WACC in year three. Can you share with us the sort of ROIC that you expect to achieve on this plan? To what extent you've included synergy costs for realizing synergies, but ROIC will exceed WACC. To what extent in year three in your central case business plan?
Yeah. It's a full business plan, including synergies, including cost synergies, obviously. Absolutely.
But okay. What level of WACC are you assuming?
Oh, what level of WACC? I think it's around 9%.
Yeah, around 9%. It is a group WACC, and we are above this figure in year three.
Perfect. Thank you.
Thank you.
The next question comes from Akash Gupta with JP Morgan. Please go ahead.
Yes. Hi, good evening, and thanks for your time. I have a couple of housekeeping questions, and I was trying to find more information about GCG, or they are also known as Genuine Cable Group. Maybe if you can talk about, do they manufacture raw wire and cable or operate solely as a value-added distributor and custom assembly provider?
They are only a value-added distributor, so they have what you would call something which would resemble a kind of manufacturing facility, but very similar to what we do already in our services business. Which is very much assembling, cutting, stripping, molding, but nothing which would be similar to what a cable manufacturer would do.
Do they only do cables, or there are other product categories as well within GCG?
They do a little bit of conduit, they do a little bit of fiber optic cable, they do a little bit of PLCs, HMI, and robotics, but a big part is all kind of cabling. Yeah.
Last one. When we look at their cable portfolio, is it only low voltage, or do they also do medium voltage? I think the picture you have in presentation looks more like medium voltage.
They do both.
Just wondering, when it comes to all the cable needs of data center, and I think you were previously more in low voltage, so could we say like-
No, they do both.
now you can provide?
No, absolutely. They do both, and in terms of data centers, it opens many new avenues, including in the white space and including in the medium voltage parts of the data centers. Absolutely.
And maybe just one last one. Will there be any cross-selling opportunity between your North American organization and theirs, particularly in data centers?
There will be lots of cross-selling opportunities for all verticals and all customers because, as I explained, GCG has built a very strong and value-driven relationship with some customers, very entrenched relationships. But they sell to those customers mostly what they are specialists of. Which means that based on this relationship, the opportunity to do much more is there very clearly. To the opposite, there are many customers of Rexel to whom we will be able to sell those services because those services are applicable to all kind of industries and all kind of activities. At the end of the day, it is all about saving time, improving reliability, and this is the direction in general where the industry is going. We see as many opportunities of cross-selling to GCG customers as there are, and maybe probably more opportunities to sell GCG solutions to Rexel customers.
That is quite exciting for both teams. We are eager to be able to deliver that. But that is once again, not contained in the business plan and in the figures that we have talked about since the beginning.
Thank you, Guillaume. Maybe if I ask one final follow-up.
Sure.
How easy that is to bring this type of assembly solution to Europe from U.S.? Could this be possible on a three-year horizon, or it is too early to talk about bringing an expertise in that?
Look, I see really no reason why those trends wouldn't be applicable to European large projects. That being said, what I have seen in our industry is that the appetite for distribution-driven prefab solutions was probably a little bit less mature in Europe than in the U.S., but up to us to develop that.
Thank you, Guillaume.
As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from Marnix Gilleaume with UBS. Please go ahead.
Hi. Good evening. One quick question on my side. I just wanted to understand how the financing package, you mentioned of around EUR 800 million mix of cash and debt, how that fits in with your plans to address upcoming maturities. I believe you have EUR 1 billion coming due in 2028, of which EUR 400 million is in June 2028. Just trying to see how that all fits together. Thank you.
We will finance it through a mix of cash and debt. In the debt, we have this financing bridge today that is fully underwritten with a maturity of two years, and that will be repaid with future bonds. When we will do that bonds, we will look at the market and see what is the best time to refinance the one that are expiring in two years' time.
Understood. That's clear. Thank you.
The next question comes from Aron Ceccarelli with Bank of America. Please go ahead.
Hello. Hi, gentlemen. Good evening. Thanks for taking my questions. The first one is on the fact that GCG investment case seems to be that it captures a greater share of customer value than a traditional electrical distributor. To what extent can Rexel replicate these capabilities across its broader platform?
I think in North America, that's a little bit very similar to my answer on cross-selling opportunities. We will obviously strive to sell those solutions to the customers that we are already addressing as a more traditional distributor in North America. Will we be successful everywhere? Maybe not. Will there be opportunities? Absolutely, yes. In a way, it's very much in continuity with what we have tried to do over the last few years, developing advanced services, a little bit of panel building, a little bit of harnesses already, a little bit of repair services to customers. So it's very much in line with our approach, which means that from a cultural perspective, it's going to be relatively easy to sell to our own sales teams.
Yes, absolutely, the possibility to replicate those kind of services and to expand them to a broader base is clearly an opportunity in North America. When it comes to Europe, same answer as we were talking before. I'm cautious, but clearly, the idea of providing more services and in particular services which are gaining time to customers is something which is universal. In Europe, like in North America, scarcity of labor in our field because of the electrification trends is becoming a topic. Anything which can help optimize the productivity, optimize and concentrate the use of skilled labor is going to be valuable for customers. But as I said, the culture is slightly different in Europe, and it will probably be a longer path, but we can absolutely go in this direction.
Thank you. My other second question is, I noticed in the presentation that there are a few markets which are new markets for you. I wanted to understand, when you look at the assets for the first time, what was the things that attracted you the most? Was more the fact that you were entering new markets, or the priority was the depth of the verticals that you are already present but perhaps you can go a bit deeper because of this approach of GCG?
Look, it really depends. The answer depends very much on the type of markets that we're talking about. If I take several examples, grid utilities, electrical infrastructure is a market which is very attractive. We are exposed to those markets through our utilities business in Canada. We are not very exposed to those verticals in the U.S., so it's a great opportunity for us to penetrate this space. If I take a defense and shipbuilding, this is a space where relationships take a long time to build, obviously, because this is a space where reliability is extremely important. Reliability of service and long-term relationships are very important. So the acquisition of GCG for us is really something which is very attractive from this perspective because it would have taken us a very long time, or it would have probably been impossible to open those doors.
If you take other verticals like data centers, here in data centers, it's very much the possibility to expand our reach into white space, into medium voltage, which is attractive to us. I would say it's a little bit both. It's a little bit both, but clearly, on some specific verticals, like grid utilities and defense, shipbuilding, and data centers, we are very interested by the ability to open new doors. Yes, absolutely.
Thank you. A very quick one, last one, if I may. Just when you compare now your data center business to the one of your largest listed competitor in the U.S., how would that compare now after the acquisition?
With the acquisition of Anixter, they would still be substantially larger in terms of range of products and in terms of penetration also. As a reminder, WESCO is exposed. I don't want to speak for them, but I think what they disclose is usually between 20% or 25% of their North American turnover into the data center space. Up to now, we were at 8%, and we would go up to 10%. So because once again, it's not a data center company. Data centers represent 21% of their end market. So we would go from 8% to 10% compared to a more than 20% penetration for WESCO. So we would still be substantially behind, but that being said, we are increasing, obviously, our exposure to this market, which is quite attractive. Increasing and diversifying, which is quite important.
Perfect. Thank you. Congratulations.
Thank you.
The next question is a follow-up from William Mackie with Kepler Cheuvreux. Please go ahead.
Yeah. Hi, thanks. It is just on closing. How do you see the regulatory process unfolding? Do you see any CFIUS risk given that the target has U.S. Navy exposure and you are obviously a non-U.S. entity here?
Look, I do not want to speak for the regulators, so we will go through the process. What I can tell you is that the defense and shipbuilding exposure is not in areas which are super mission-critical, which are important, obviously, but not super mission-critical. So, we will do that. We will go through the process. Our analysis is that it should not be a big issue, but let us see.
Okay. Super. Thanks.
The next question comes from George Featherstone with Barclays. Please go ahead.
Hi. Thank you very much for taking the questions, and good evening. First one would just be given where you are today and now post this deal, I'd just like to understand a little bit your thinking on the timeline for achieving the targets that you set out in 2024 now and if you've got any updated thoughts on that. That'd be the first question.
That's a good question. I was expecting that somebody would ask the question. Let me postpone a little bit my answer to this question. At this stage, we want to go through the closing steps. We want to understand a little bit better what can be our real ambition behind the promised ambition in terms of especially cross-selling synergies.
Then at some point, next year, we will come back to you to update you on that, because it's very clear that we are accelerating our path to our midterm ambitions. The midterm ambitions being, by that I mean, mostly the EBITDA percentage ambition. As I've said, we estimate that the contribution of GCG to that is going to be at least 20 basis points. We have a guidance for this year of around 6.2%. So all of that will make us closer to our goal of 7%. But let me postpone that a little bit and come to you back, probably at the beginning of next year to update you on what the timing could be.
Okay. Thank you. The second question just relates to the data center business, which I acknowledge is not kind of the main part of the story here, but clearly is going to be contributing quite significantly to the performance of the business right now. How much of it is just cabling that you sell into there? The reason I'm sort of curious about this is because the industry seems to be moving increasingly towards a sort of direct current architecture, which explicitly is trying to reduce the amount of cable, the content that's actually in the data center. Just curious about your thoughts there on how you see that business evolving.
So, look, obviously we have looked. Knowing that the music in the stock market is very much about the switch from AC to DC, we have looked in detail into this, looking at it equipment by equipment, utilization by utilization. It will maybe surprise you, but long story short, we think in summary that GCG would be more of a beneficiary than a loser of a DC transition. This has to do with GCG's very specific product and segment positioning. In general, if I take a step back, in any technological evolution, it's better to be on the value-added side of the market, and this is the direction we are going here. I don't want to get too technical and to enter into the details.
I know that many of you anyway are going to spend next week very exposed to data centers, so I don't want to bore you a few days in advance. But let me say that we have looked in detail at this question, and that the answer is rather positive than negative. Let me say it like that. Maybe one word also about the specific exposure to what kind of data centers of GCG. The majority of the projects to which GCG is exposed is in the space of enterprise data centers and colocation data centers, and not very much in hyperscale data centers or new cloud data centers.
Beyond the fact of what I just said about the evolution from AC to DC, there is also the fact that last time I looked, the evolution to direct current technologies is probably going to be a little bit quicker, and we are talking years anyway, but a little bit quicker on the hyperscale side of the data centers than on the enterprise and colo side of the data centers. But at the end of the day, once again, our detailed evaluation equipment by equipment gives us a positive feeling about that.
Okay. Thank you very much.
It is not only cabling. It is also conduit, it is also all kind of assemblies. But yes, there is a lot of cabling.
Okay. Appreciate the color. Thank you very much.
I know to talk about fiber optics, by the way. There is also fiber optics. Okay.
The last question comes from Eric Lemarie with CIC. Please go ahead.
Yes. Hi, good evening. Thanks for taking my question. I've got two, actually. First one, what about the geographical footprint of GCG in the U.S.? I do not know if it is important or not, but maybe you can tell us. Within the EUR 1.1 billion of sales, what is the percentage of services today?
First of all, the geographical footprint. First of all, it is not only U.S., and I should disclose that. It is 90% U.S., and then 10% of Canada and Europe, I think a little bit more Europe than Canada. That is basically what it is. In the U.S., the footprint is relatively widespread. They are headquartered in Chicago, and I would assume that they have more of an East Coast presence. But overall, it is relatively widespread. It is a large-sized company with no holes. Anyway, if in detailed analysis, we find that there are places where there are opportunities. As you know, Rexel has complete coverage of the U.S., so we will be able to transform that into possible synergies. What was the second question?
Services part.
Oh, the services part. The services part. Look, I'm not able to give you the answer in terms of turnover. What I can repeat is that three quarters of their products include a value-added solution component. Which doesn't always mean that it's going to be charged for. It's a little bit the same story with Rexel, as you know. In some cases, we are able to charge individually for services when they are extremely advanced services. But in most cases, it's part of a global value proposition that we give to the customer, and it's included in the margin. So I think the figure would not be that relevant. Anyway, it will take a little bit more time for us to align the way we measure things in an area which is never super easy to completely measure.
Okay, great.
But three quarters of the products sold include, in some way, a value-added component.
Thank you.
Mr. Texier, there are no more questions registered at this time.
Thank you. Thank you very much for your attention on a Friday evening. As you understand, it's an important strategic step for Rexel by many aspects. The value-added aspects, the acceleration aspect, and the exposure to new exciting markets, and also the geographical aspect of it. We are excited to welcome the GCG teams once the closing process is going to be completed. And we are excited about the ability to accelerate our strategic roadmap. Thank you very much for your attention, and have a good weekend.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.