COMBINED SHAREHOLDERS’ MEETING OF MAY 24, 2018 6.1 REPORT OF THE BOARD OF DIRECTORS TO THE COMBINED SHAREHOLDERS’ MEETING OF MAY 24, 2018 To the Shareholders, 2. Resolutions to be submitted to the ordinary The combined meeting of the shareholders of Rexel, a Shareholders’ Meeting French société anonyme, having its registered office at 2.1 Approval of the annual and consolidated 13, boulevard du Fort de Vaux 75017 Paris (“Rexel” or financial statements (first and second the “Company”) has been convened by the Board of resolutions) Directors on May 24, 2018, at 10 a.m. at Chateauform’ City George V, 28 avenue George V, 75008 Paris, in The first and second resolutions submit to the order to resolve upon the draft resolutions presented shareholders’ approval the annual and consolidated hereinafter (the “Shareholders’ Meeting”). financial statements of the Company for the financial year ended December 31, 2017, as drawn up by the In this report, we present you with the motives Board of Directors. behind each of the resolutions being put to the vote at the Shareholders’ Meeting. The annual financial statements show a profit of €14,281,260.91. 1. Course of business The consolidated financial statements show a profit For the financial year ended December 31, 2017: of €104.9 million. •The Group’s performance is in l ine with the In accordance with the provisions of Article 223 announced objectives: quater of the French General Tax Code, the first – The return to organic growth with €13.3 billion resolution also submits to the shareholders’ approval of sales, increasing of 3.5% on a constant and the amount of costs and expenses referred to in same-day basis, including a positive effect on Article 39-4 of the French General Tax Code, which copper of 1.4%; are not deductible from the results. For the financial year ended December 31, 2017, these costs and – The growth in adjusted EBITA of 6.1%; the expenses amounted to €9,996. These costs and adjusted EBITA corresponds to 4.4% of the sales, expenses represent an amount of income tax of increasing of 13 bps compared to 2016; and €3,941 (at an income tax rate of 39.43%). These – The improvement of indebtedness ratio, which costs and expenses correspond to the share of a corresponds to 2.8x EBITDA compared to 3.0x depreciation surplus (portion of non-deductible at the end of 2016 (Net debt-to-EBITDA as rents of hired vehicles). calculated under the Senior Credit Agreement We suggest that you approve these resolutions. terms). •Organic sales, in the fourth quarter, are increasing 2.2 Allocation of income (third resolution) of 5,4% on a constant and same-day basis, Subject to the annual and consolidated financial reflecting an improvement of sales trend in the three regions. The Group experiences a growth: statements as presented by the Board of Directors being approved by the shareholders, the third – Of 5.5% in Europe, thanks to accelerating sales resolution submits to the approval of the shareholders in most of the European countries; the following allocation of results for the financial year – Of 3.2% in North America, sustained by Canada ended December 31, 2017: and the proximity activity in the United States of Origin of the amounts to be allocated: America; Results from the 2017 financial • – Of 12.7% in Asia Pacific mainly due to China and year €14,281,260.91 Australia; Previous carry forward • The recurring net income of the Group for 2017 is at December 31, 2017 €116,579,922.70 • increasing of 16.4%. Total €130,861,183.61 REXEL 2017 – REGISTRATION DOCUMENT 302