Rexel cuts profit margin forecasts as costs weigh
PARIS, July 30
PARIS, July 30 (Reuters) - Rexel, the France-based distributor of electrical parts and supplies to professionals, cut its profit margin forecast for this year on Wednesday to reflect a poor first half performance and account for a sharp increase in costs.
The company said it was now forecasting an adjusted EBITDA margin of "at least 5 percent," having said in February it would deliver a result in a range of 5.3 to 5.6 percent, compared with the 5.4 percent margin it delivered in 2013.
Rexel said its first-half adjusted EBITDA gross margin fell 20 basis points year-on-year, largely impacted by an "unfavourable geographic mix" that included a weaker-than-expected performance in Canada and Australia, and extra costs that were mainly investment related.
"Considering the related additional costs, as well as our half-year results, we are adjusting our 2014 outlook in terms of profitability, while confirming our cash flow conversion targets and cash allocation policy to secure an attractive dividend, further improve the balance sheet and continue to invest for growth," said Chairman and Chief Executive Rudy Provoost. (Reporting by Andrew Callus; Editing by James Regan)