Firstly, the group's growth opportunities through strategic mergers and acquisitions should be followed with interest. In particular, the group has recently made strategic acquisitions in growth areas such as energy efficiency solutions in the US.
The equipment market and its expansion should also be monitored, particularly the global market for electrical components and equipment, which is set to grow in the coming years.
It will also be important to watch closely for changes in the company's strategy and its focus on certain businesses such as sustainable energy on a global level, as Rexel can benefit from the growth in demand for low and ultra-low voltage electrical products.
In the context of this analysis, attention should also be paid to the competition in this business sector, which is relatively intense and is based mainly on product scope, quality, service, price and geographical proximity.
One should also keep an eye on the raw materials market, including the price of copper, which can pose a threat to the company, which uses it mainly for production.
The group's annual and quarterly financial results are of course also important to follow as part of this analysis. It is important to compare them with the targets set by the group and with analysts' forecasts.
Finally, the growth of the group's suppliers should also be monitored, particularly in terms of raw materials, since an impact on these suppliers would directly affect the company.
A good knowledge of Rexel and its activities is of course essential if you want to make a good analysis of this stock. This is why we suggest that you discover here a complete presentation of this company and its different sources of income before buying or selling Rexel shares.
The Rexel Group is currently the world leader in the professional distribution of electrical supplies.
The company is also an international company, with a presence in more than 25 countries around the world, where it offers electrical products and solutions for residential, industrial and commercial buildings and infrastructures to professionals through a multi-brand network of nearly 1,900 sales outlets.
The various products and solutions marketed by the group meet the needs of electrical equipment, lighting, security, HVAC, communication, industrial automation and energy saving.
To better understand Rexel's activities, they can be divided into three main markets
It is also interesting to know the geographic distribution of the Rexel Group's revenues. Indeed, the Group generates 56.3% of its sales in Europe. The rest comes from North America (34.9%) and Asia Pacific (8.8%).
Rexel currently employs 14,518 people and is listed on the Euronext Paris market in compartment A. It is, of course, included in the benchmark CAC 40 stock market index.
Photo credits: ©sylv1rob1/123RF.COM
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.
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.
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.
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.
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.
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.
As of December 31, 2019, Rexel's share capital was distributed as follows: 1.69% of the Group's shares belong to the management, members of the Board of Directors and employees of the company. 80.13% of this capital is floating and therefore held by the public. Cevian Capital Partners Limited holds 17.60% of the company's shares. Finally, the remaining 0.58% of the capital is held in treasury stock by the Rexel Group.
Of course, the Rexel group's share is currently part of the composition of the French CAC 40 benchmark index, which includes the 40 companies with the largest capitalization in the country. But what is less well known is that it is also included in the composition of other stock market indices, including the SBF 120, CAC Mid 100, CAC AllTrade, CAC AllShares, FTSE EuroMid, STOXX600, FTSE4Good, STOXX® Global ESG Leaders, Ethibel Sustainability Index Excellence Europe, Euronext Vigeo Eiris Europe 120 and the Dow Jones Sustainability Index Europe.
As of July 3, 2020, Rexel's share performance since the beginning of 2020 has been -12.79%. Over the same period, the share price has seen a low of €4,921 and a high of €13,415. Of course and as part of your technical analysis of this stock, you will also need to monitor other indicators over the longer term.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. {etoroCFDrisk}% of retail CFD accounts lose money. You should consider whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
