Core Insights - Rexel reported Q1 2025 sales of €4,825 million, reflecting a year-on-year increase of +2.5% on a reported basis and +1.4% on a constant and same-day basis, marking a return to positive growth after a year of decline [1][6][12] - The sales growth was primarily driven by North America, which saw a +3.8% increase, while Europe experienced a slight decline of (0.7)% [4][11] - The company confirmed its full-year guidance for 2025 despite the uncertain macro-political environment and ongoing monitoring of tariff impacts on sales and profitability [1][4][16] Sales Performance - Q1 2025 sales figures: - Reported sales: €4,825 million, up +2.5% - Constant and same-day basis: +1.4% - Constant and actual-day basis: (0.4)% [1][6] - Regional breakdown: - North America: €2,151.2 million, +3.8% - Europe: €2,407.3 million, (0.7)% - Asia-Pacific: €266.6 million, +1.4% [11][13] Strategic Initiatives - The company engaged in active portfolio management, completing one acquisition in the US and disposing of its Finnish operations, aligning resources with high-value markets [1][19] - Digital sales penetration increased to 33% of total sales, up +241 basis points year-on-year, indicating a strong focus on digital transformation [1][9] Market Trends - North America showed strong sales growth driven by non-residential project execution and improved Proximity business momentum [4][12] - Europe demonstrated recovery from a previous decline, with positive trends across all countries despite an overall slight decrease [4][11] - Asia-Pacific sales were supported by a significant increase in China, which grew by +7.5% [13][15] Financial Outlook - The company maintains its FY 2025 guidance, emphasizing resilience amid a challenging economic landscape and ongoing tariff monitoring [4][16] - Free cash flow conversion is projected at approximately 65%, excluding a €124 million fine from the French Competition Authority [20]

Core Insights - The article highlights the highest-quality Dividend Champions, which are companies that have consistently increased their annual dividend payouts for at least 25 years [1] Group 1: Dividend Champions - Dividend Champions are defined as companies listed on U.S. exchanges with a track record of higher annual dividend payouts for a minimum of 25 years [1] Group 2: Future Articles - Subsequent articles will focus on Dividend Contenders (companies with 10-24 years of dividend increases) and Dividend Challengers (companies with 5-9 years of dividend increases) [1]

Financial Data and Key Metrics Changes - The company reported GAAP net income per share of $0.55 for Q4 2024, down from $0.62 in Q3 2024 and $0.72 in Q4 2023 [19] - For the full year, GAAP net income per share was $2.44, compared to $2.75 in 2023 [19] - The total portfolio at fair value increased to $26.7 billion at the end of Q4 2024, up from $25.9 billion at the end of Q3 2024 and $22.9 billion a year ago [21] - The weighted average yield on debt and other income-producing securities at amortized costs was 11.1% at December 31, down from 11.7% at September 30 and 12.5% at the end of 2023 [21] Business Line Data and Key Metrics Changes - The company originated approximately $3.8 billion of new investment commitments in Q4 2024, a more than 50% increase over Q4 2023 [26] - Total new commitments for the year reached $15 billion, more than double the commitment volumes of 2023 [26] - The non-accrual rate at cost ended the quarter at 1.7%, up 40 basis points from the prior quarter but below the historical average of 2.8% [29] Market Data and Key Metrics Changes - The company ended 2024 with a record NAV per share of $19.89, marking the eighth consecutive quarter of NAV growth [13] - The organic weighted average LTM EBITDA growth rate of portfolio companies reached 11% in Q4, up from 10% in the prior quarter [16] Company Strategy and Development Direction - The company aims to out-origin its competition, which is seen as a key driver of long-term credit performance [14] - The focus on financing incumbent borrowers has increased, with over 70% of new commitments made to existing borrowers [15] - The company is well-positioned for a successful 2025, anticipating a healthy economy and increased M&A activity [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate potential impacts from new government policies, stating no material direct impact is expected [17] - The company is monitoring the economic environment closely, with a focus on maintaining strong credit performance despite potential challenges [18] - Management highlighted the importance of their diversified portfolio and strong credit performance in comparison to peers [16][18] Other Important Information - The company declared a first-quarter 2025 dividend of $0.48 per share, consistent with the Q4 2024 dividend [24] - The company has a taxable income spillover estimated at $922 million or $1.37 per share available for distribution to stockholders in 2025 [24] Q&A Session Summary Question: Activity during Q4 and its impact on NII - Management noted that Q4 activity levels were flat compared to Q3, with some delays due to the election, but January has been busy [35][36] Question: Asset allocation within the portfolio - Management confirmed no change in the mix of the portfolio over time, maintaining a balance between junior and senior deals [39][41] Question: Sports franchise investment - Management discussed the recent investment in the Dolphins, emphasizing its uniqueness and potential for growth [48] Question: Impact of base rate declines on portfolio yields - Management indicated a lag effect in yield declines, with expectations for similar levels of decline in Q1 [61][63] Question: Outlook for credit losses - Management expressed confidence in the portfolio's performance, noting strong underlying profit growth and low non-accrual rates [87] Question: Ivy Hill distribution increase - Management confirmed that Ivy Hill's increased distribution is due to strong performance and a special dividend, with a new run rate expected [92][93] Question: Exposure to government contracts - Management indicated minimal exposure to government contracts, suggesting no significant impact on the portfolio [96][109]