S&P revises Rexel view to positive

S&P said it revised Rexel SA’s outlook to positive from stable and affirmed its BB rating.

“Rexel's revenue, which benefits from a strong recovery in the renovation end-market, will exceed pre-pandemic levels in 2021. Sales in first-half 2021 increased by about 20% on a same-day basis, or about 17% on a reported basis, supported notably by the healthy renovation end market and pass-through of suppliers' price increases. However, volumes in North America were still 15% below second quarter 2019 levels, which leaves room for further improvement,” S&P said in a press release.

The agency said it forecasts adjusted EBITDA margins of 7%-7.5% in 2021-2022.

“The positive outlook reflects that we could raise the ratings on Rexel in the next 12 months if its adjusted funds from operations (FFO) to debt ratio remains above 20%, and debt to EBITDA comfortably below 4x, while the company continues to perform well and generate material free cash flow,” S&P said.

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