Rexel — Interim / Quarterly Report 2009

Jul 31, 2009

Half-year financial report At 30 June 2009

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Half-year financial report at 30 june 2009

I. Activity report …………………page 2
II. Condensed consolidated interim financial statements page 20
III. Statutory auditors' report …………………………………page 49
IV. Responsibility for the half-year financial report .…………page 52

I. Activity report

This document is a free translation into English of the activity report for the period ended 30 June 2009 issued in the French language and is provided solely for the convenience of English speaking readers. In the event of any ambiguity or discrepancy between this unofficial translation and the activity report for the period ended 30 June 2009, the French version will prevail.

1. | OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Rexel was incorporated on 16 December 2004. Shares of Rexel were admitted to trading on the Eurolist market of Euronext Paris on 4 April 2007. The group consists of Rexel and its subsidiaries (together referred to here as "the Group" or "Rexel").

In 2008, Rexel acquired significant part of the businesses of Hagemeyer N.V., a Netherlands based company operating as a worldwide distributor of electrical supplies, the business of Sonepar in Sweden and transferred to Sonepar its own business in Germany. All of these transactions are described in section 2.2 of the Document de référence registered by the Autorité des Marchés Financiers on 20 April 2009 under number R.09-022. The Hagemeyer businesses were consolidated from 31 March 2008. The former business of the Group in Germany, transferred to Sonepar in the second quarter, has been excluded from the scope of consolidation from 31 March 2008. The business acquired from Sonepar in Sweden was consolidated from 1 July 2008.

Numbers and percentages in this document were calculated on the basis of numbers expressed in thousands of Euros, or other currencies, and accordingly, may differ from the numbers and percentages calculated on the basis of the numbers presented.

1.1 | Financial Situation of the Group

1.1.1 | Group Overview

The Group is a worldwide leader in the professional distribution of low and ultra-low voltage electrical products based on sales and number of branches. The Group's business is organized around the three main geographic areas in which it operates: Europe, North America, and the Asia-Pacific zone. This geographic segmentation was determined on the basis of the Group's financial reporting structure. Non-core operations and businesses managed at Group level are aggregated and presented under a separate segment called "Other Operations", as defined below. This segment also includes unallocated corporate overheads expenses.

In the first half of 2009, the Group recorded consolidated sales of €5,608.9 million, of which €3,272.6 million were generated in Europe (58% of sales), €1,730.4 million in North America (31% of sales), €399.4 million in the Asia-Pacific zone (7% of sales), and €206.5 million related to Other Operations (4% of sales).

The Europe zone consists of France (which accounts for approximately 35% of Group consolidated sales in this zone), Germany, the United Kingdom, Ireland, Austria, Switzerland, The Netherlands, Belgium, Luxembourg, Sweden, Finland, Norway, Italy, Spain, and Portugal, as well as several Central European countries (Slovenia, Hungary, Slovakia, the Czech Republic, Poland, Russia and the Baltic States). In 2009, the Group disposed of its distribution network in Hungary.

The North America zone consists of the United States and Canada. The United States represents approximately 75% of the Group's consolidated sales in this zone and Canada the remaining 25%.

The Asia-Pacific zone consists of Australia, New Zealand and China, as well as certain countries in Southeast Asia (Indonesia, Malaysia, Singapore and Thailand). Australia accounts for approximately 65% of the Group's consolidated sales in this zone and New Zealand close to 15%.

The Other Operations segment includes ACE, the Agencies / Consumer Electronics division acquired from Hagemeyer from the beginning of the second quarter of 2008, which represented approximately 3% of the Group's sales over the period. It also includes Chile, which represented less than 0.5% of the Group's sales in the first half of 2009 and certain businesses managed at Group level. Unallocated corporate overheads (mainly occupancy and personnel costs of the headquarters) are also included in this segment, as well as elimination of inter-segments operations.

The analysis below covers the Group's sales, gross profit, distribution and administrative expenses and operating income before amortization of intangible assets recognized on the occasion of purchase price allocations and other income and other expenses (EBITA) separately for each of the three geographic segments, as well as for the Other Operations segment.

1.1.2 | Seasonality

Notwithstanding the relatively low degree of seasonality within the Group's sales, there is seasonality in cash flows due to variations in working capital requirements, with, generally, about half of annual free cash flow generated in the first half of the year, a low third quarter due to an increase in working capital requirements as a result of higher sales in September, and a strong fourth quarter.

1.1.3 | Effects of changes in copper price

The Group is indirectly exposed to fluctuations in copper price in connection with the distribution of cable products. Cables accounted for approximately 15% of the Group's sales, and copper accounts for approximately 60% of the composition of cables. This exposure is indirect since cable prices also depend on suppliers' commercial policies and on the competitive environment in the Group's markets. Changes in copper price have an estimated so-called "recurring" effect and an estimated so called "non-recurring" effect on the Group's performance, assessed as part of the monthly internal reporting process of the Rexel Group:

• x The recurring effect related to the change in copper-based cable prices corresponds to the change in value of the copper part included in the selling price of cables from one period to another. This effect mainly relates to sales;
• x The non-recurring effect related to the change in copper-based cable prices corresponds to the effect of copper price variations on the selling price of cables between the moment they are purchased and the time they are sold, until all such inventory is sold (direct effect on gross profit). Practically, the non-recurring effect on gross profit is determined by comparing the historical purchase price and the supplier price effective at the date of the sale of the cables by the Rexel Group. Additionally, the non-recurring effect on EBITA is the non-recurring effect on gross profit offset, when appropriate, by the non-recurring portion of changes in the distribution and administrative expenses (essentially, the variable portion of compensation of sales personnel, which accounts for approximately 10% of the variation in gross profit).

Both these effects are assessed on the whole of cable sales in the period, the majority of sales being thus covered. In addition, internal Rexel Group procedures stipulate that entities that do not have the information systems that allow such exhaustive calculation have to estimate these effects based on a sample representing at least 70% of the sales in the period. The results are then extrapolated to all cables sold during the period. Considering the sales covered, the Rexel Group deems the effects thus measured a reasonable estimate.

1.1.4 | Comparability of the Group's operating results

The Group has undertaken a number of acquisitions and disposals, and exchange rates may fluctuate significantly. Additionally, the number of working days in each period has an impact on the Group's consolidated sales. Finally, changes in copper price have an impact on Group's financial performance. For these reasons, a comparison of the Group's reported operating results over different periods may not provide a meaningful comparison of its underlying business performance. Therefore, in the analysis of the Group's consolidated results below, financial information is also presented restated for the following adjustments.

In addition, the Group implemented IFRIC 13, Customers Loyalty Programmes, retrospectively from 1 January 2008. As a consequence, the figures presented for 2008 have been restated in accordance with this interpretation. The impacts are however not material and do not affect EBITA. They are presented in the note 2.2.1 to Rexel's Condensed Consolidated Interim Financial Statements at 30 June 2009.

Exclude the effects of acquisitions and disposals

The Group adjusts results to exclude the effects of acquisitions and disposals. Generally, the Group includes the results of an acquired company in its consolidated financial statements at the date of its acquisition and ceases to include the results of a divested company at the date of its disposal. To neutralize the effects of acquisitions and disposals on the analysis of its operations, the Group compares the results of the current year against the results of the preceding financial year, assuming that the preceding financial year would have had the same scope of consolidation for the same period as the current year.

In the year 2008, the Group acquired Beacon Electric Supply Company, an electrical supplies distributor in the area of San Diego in the United States, the business of the ABK Electrical Wholesale Pty.Ltd Company, an electrical supplies distributor in Australia, Egleys Electrical in New Zealand, Espace Elec and NFM SA in France, and B.V. Electrotechnische Groothandel J.K. Busbroek in The Netherlands. These acquisitions amounted to €59.0 million net of cash acquired, including prices adjustments on previous acquisitions.

In 2008, the Group also acquired Hagemeyer in an offering that ended on March 25, 2008. As of 30 June 2009, Rexel owned all of the outstanding shares and all of the convertible bonds outstanding for an amount of approximately €3.2 billion through its subsidiary Kelium. The transfer of the agreed activities to Sonepar was completed in June 2008 for an amount of approximately €1.6 billion. In addition, Rexel disposed of its activities in Germany to Sonepar for an amount of €177 million and acquired from Sonepar its activities in Sweden for an amount of €86 million. In total, the assets sale to and assets swap with Sonepar resulted for Rexel in a reduction of its net debt of approximately €1.7 billion.

In the first half of 2009, the Group acquired 63.5% of the shares of Suzhou Xidian Co. Ltd. in China for CNY41.0 million (€4.7 million) net of cash acquired. Prices adjustments on previous acquisitions amounted to €28.7 million, mainly related to the purchase of the remaining Hagemeyer shares. The Group also disposed of its distribution network in Hungary in the period.

Exclude the effects of fluctuations in exchange rates

Fluctuations in currency rates against the euro affect the euro value of the Group's sales, expenses and other balance sheet items as well as the income statement. Nonetheless, the Group has a relatively low exposure to the transaction risk of dealing in different currencies, as cross-border transactions are limited. To neutralize the currency translation effect on the comparability of its results, the Group compares its historical figures for the current year against the same period of the prior year figures, using for these figures the same euro exchange rates as in the current year.

Exclude the non-recurring effect related to changes in copper price

For the analysis of financial performance on a constant and Adjusted basis, the estimated nonrecurring effect related to changes in copper-based cable prices, as described in paragraph 1.1.3 – "Effects of changes in copper price" here above, is excluded from the information presented for both the current and the previous periods. Such information is referred to as "Adjusted" in the rest of this document.

Exclude the effects of different numbers of working days in each period to analyze sales

The Group's sales in a given period compared to another period are affected by the number of working days, which changes between periods. In the analysis of its consolidated sales, the Group neutralizes the effect of different numbers of working days between the two periods presented by comparing its historical figures for each month in the current year against the prior year figures, adjusted proportionally to the number of working days during the current year. This analysis by number of working days is not deemed relevant to the Group's other consolidated income statement items.

Accordingly, in the following discussion of the Group's consolidated results, the following information may be provided for comparison purpose:

• x On a constant basis, meaning excluding the effect of acquisitions and disposals and the effect of fluctuations in exchange rates. Such information is used for comparison on sales and headcounts;
• x On a constant basis and same number of working days, meaning on a constant basis and restated for the effect of different numbers of working days in each period. Such information is used only for comparison related to sales;

x On a constant basis, Adjusted, meaning on a constant basis and adjusted for the estimated nonrecurring effect related to changes in copper-based cable prices. Such information is used for comparison related to gross profit, distribution and administrative expenses and EBITA.

This information does not derive from accounting systems but is an estimate of comparable data in accordance with the principles set out above. It is subject to the review of the statutory auditors pursuant to Article L.823-10 of the French commercial code.

EBITA is used to monitor the Group's performance. EBITA is not an accepted accounting measure under IFRS. The table below sets out the reconciliation from reported operating income before other income and other expenses to Adjusted EBITA on a constant basis:

	Quarter ended 30 June			Half-year ended 30 June
(in millions of euros)	2009	2008	2009	2008
Operating income before other income and other expenses	101.5	192.5	179.0	335.0
Changes in scope effects Foreign exchange effects		1.6 3.6		12.4 5.2
Non recurring effect related to copper Amortization of the intangible assets recognized as part of the allocation of the	(6.7)	(7.0)	(4.1)	(1.6)
purchase price of acquisitions	4.8	5.1	9.6	7.1
Adjusted EBITA on a constant basis	99.6	195.8	184.5	358.1

1.2 | Major event that occurred in the first half of 2009

In the first half of 2009, Rexel acquired all of the remaining outstanding shares of Hagemeyer, thus increasing its stake from 99.13% at 31 December 2008 to 100.0% at 30 June 2009. The only material effect of this acquisition on the Group's financial situation is the €27.2 million increase in its net debt. It is disclosed in in note 3.1 – "Hagemeyer Acquisition" to Rexel's Condensed Consolidated Interim Financial Statements at 30 June 2009.

In the first half of 2009, the Group also completed the acquisition of 63.5% of the shares of Suzhou Xidian Co. Ltd. in China and disposed of its distribution network in Hungary. These operations did not affect materially its financial position and their effects are detailed in paragraph 1.3 hereafter.

1.3 | Comparison of the financial results at 30 June 2009 and 2008

The 2008 figures were restated in accordance with IFRIC 13, Customers Loyalty Programmes, as disclosed in 1.1.4 above. The reported figures include the effect of the Hagemeyer transaction in the first quarter of 2009 but not in the first quarter of 2008. On a constant basis, both periods include such effect.

1.3.1 | Rexel's consolidated financial results

The following table sets out Rexel's consolidated income statement for the first halves and second quarters of 2009 and 2008, in millions of Euros and as a percentage of sales.

REPORTED		Quarter ended 30 June		Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	2,799.1	3,475.7	(19.5)%	5,608.9	5,992.2	(6.4)%
Gross profit Distribution and administrative expenses(1)	685.2 (578.9)	840.2 (642.6)	(18.4)% (9.9)%	1,376.0 (1,187.4)	1,467.0 (1,124.9)	(6.2)% 5.6%
EBITA Amortization(2) Other income and expenses	106.3 (4.8) (39.2)	197.6 (5.1) 89.7	(46.2)% (5.9)%	188.6 (9.6) (77.8)	342.1 (7.1) 77.8	(44.9)% 35.2%
Operating income Financial expenses	62.3 (37.0)	282.2 (43.0)		101.2 (74.7)	412.8 (83.0)
Income tax Net income	(8.1) 17.2	(42.3) 196.9		(8.5) 18.0	(70.4) 259.4
as a % of sales	0.6%	5.7%		0.3%	4.3%
(1) Including depreciation:	(20.9)	(23.0)	(9.1)%	(41.8)	(39.0)	7.3%

(2) Amortization of the intangible assets recognized as part of the allocation of the purchase price of acquisitions.

CONSTANT BASIS ADJUSTED FINANCIAL DATA
	Quarter ended 30 June				Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	2,799.1	3,585.5	(21.9)%	5,608.9	6,936.0	(19.1)%
Same number of working days			(20.2)%			(17.9)%
Gross profit	678.3	855.2	(20.7)%	1,372.2	1,672.0	(17.9)%
as a % of sales	24.2%	23.8%		24.5%	24.1%
Distribution and administrative expenses	(578.7)	(659.4)	(12.2)%	(1,187.7)	(1,313.9)	(9.6)%
as a % of sales	(20.6)%	(18.3)%		(21.2)%	(18.9)%
EBITA	99.6	195.8	(49.1)%	184.5	358.1	(48.5)%
as a % of sales	3.6%	5.5%		3.3%	5.2%

Sales

In the first half of 2009, Rexel's consolidated sales decreased by 6.4% to €5,608.9 million, a 17.9% decrease on a constant basis and same number of working days. Acquisitions, net of divestitures, accounted for an increase of €832.0 million, mainly related to the Hagemeyer transaction, while the positive effect of changes in exchange rates amounted to €111.8 million, due to the appreciation of the US dollar against the Euro, which was mitigated by the depreciation of other currencies, especially the British Sterling and the Australian and New Zealand dollars.

The following table analyzes the changes in sales growth between the first halves of 2009 and 2008, on a reported basis and on a constant basis and same number of working days:

			Growth 2009 vs. 2008
		Q1	Q2	H1
Growth on a constant basis and same number of working days		(15.4)%	(20.2)%	(17.9)%
Number of working days effect Organic growth	(a)	(0.7)% (16.1)%	(1.7)% (21.9)%	(1.2)% (19.1)%
Changes in scope effects Foreign exchange effects Total scope and currency effects	(b)	30.7% 2.4% 33.1%	1.7% 1.4% 3.2%	13.9% 1.9% 15.8%
Effective growth (a) x (b) (1)		11.7%	(19.5)%	(6.4)%
(1) Organic growth compounded with the scope and currency effects

In the first half of 2009, the lower copper-based cable prices compared to the first half of 2008 accounted for approximately one fourth of the -17.9% Group's sales variation on a constant basis and same number of working days. In the second quarter of 2009, sales decreased by 20.2% on constant basis and same number of working days, approximately one fifth of which due to the change in copper-based cable prices.

Gross profit

In the first half of 2009, gross profit amounted to €1,376.0 million, a 6.2% decrease compared to 2008. On a constant basis, Adjusted gross margin improved by 40 basis points compared to 2008 from 24.1% in the first half of 2008 to 24.5% in the first half of 2009. This improvement reflects purchasing synergies with Hagemeyer, together with a favourable product mix, notably cables (reduction in the share of cables in the overall sales, cables being sold with a lower gross margin than the Group average one) and a favourable country mix. In the second quarter of 2009, Adjusted gross margin improved by 40 basis points from 23.8% to 24.2% on a constant basis.

Distribution and administrative expenses

Rexel pursued the downsizing of its costs structure over the period to adapt to the current market trends. On a constant basis, Adjusted distribution and administrative expenses decreased by 9.6% between 2008 and 2009 compared to a 19.1% decrease of sales. Adjusted personnel expenses decreased by 10.5% on a constant basis as a result of the headcount reductions implemented in all the countries, with the major effects in North America and in Europe (in particular in Spain and in the United Kingdom). At 30 June 2009, the number of employees was 30,367, down 8.0% compared to 31 December 2008 and down 12.3% compared to a year ago, on a constant basis. In addition, temporary part-time measures are being implemented where legally authorised to reduce costs and protect employment. Transportation costs also significantly decreased due to lower sales and petrol price decrease. Bad debt expenses increased compared to the first half of 2008, especially in Europe, including increased credit insurance costs.

EBITA

EBITA reached €188.6 million in the first half of 2009, a 44.9% decrease compared to the first half of 2008 on a reported basis. On a constant basis, Adjusted EBITA decreased by 48.5% and Adjusted EBITA margin decreased by 190 basis points from 5.2% in the first half of 2008 to 3.3% in the first half of 2009 as a result of the drop in sales. The effect of the decrease in sales was mitigated by the improvement of gross margin, and the costs saving actions taken to reduce distribution and administrative expenses.

Other income and other expenses

In the first half of 2009, other income and other expenses were a net expense of €77.8 million and included €53.0 million restructuring and Hagemeyer's integration expenses (including €14.2 million in Spain, €11.3 million in France, and €6.7 million in the United States), €4.0 million related to the disposal of Rexel's operations in Hungary, €12.6 million goodwill impairment charge in respect of the operations of the Group in Slovakia and Finland and €2.3 million of non-cash charges in respect of free shares granted in April 2007 concurrently to the IPO of Rexel.

Financial expenses

In the first half of 2009, net financial expenses were €74.7 million compared to €83.0 million in the first half of 2008. The 2009 expenses included €6.7 million with regard to defined employee benefit obligations because of the reduced funding resulting from the negative return on plan assets in 2008, whereas the net impact was not material in 2008. In the first half of 2008, financial expenses included €11.0 million non-recurring costs related to the 2008 Group's refinancing. Financial expenses reflect the terms of the 2008 Senior Credit Agreement entered into for the Hagemeyer transaction only as from the second quarter of 2008, as well as the related increase in net debt. The sharp decrease in interest rate between both periods was only partly off-set by the increase in the Group's average net debt and the hedging transactions. In the second quarter of 2009, the effective interest rate was 4.6% compared to 6.0% in the second quarter of 2008 and 4.5% in the first quarter of 2009.

Tax expenses

The effective tax rate was 32.0% at 30 June 2009 compared to 21.4% at 30 June 2008. In the first half of 2008, the effective tax rate included the effect of the non taxable gain relating to the transfer to Sonepar of Rexel's operations in Germany. Excluding the effect of this non recurring transaction, the effective tax rate would have been 31%.

Net income

Net income amounted to €18.0 million in the first half and 17.2 million in the second quarter of 2009, of which respectively €17.9 million and €17.0 million attributable to equity holders of Rexel, compared to €259.4 million in the first half of 2008 and €196.9 million in the second quarter of 2008.

REPORTED (in millions of euros) 2009 2008 2009 2008 Sales 1,626.6 2,006.0 (18.9)% 3,272.6 3,250.0 0.7% Gross profit 422.6 502.3 (15.9)% 852.2 836.7 1.9% Distribution and administrative expenses (352.4) (389.4) (9.5)% (719.8) (640.2) 12.5% EBITA 70.2 112.9 (37.9)% 132.4 196.5 (32.7)% as a % of sales 4.3% 5.6% 4.0% 6.0% Quarter ended 30 June Half-year ended 30 June Change in % Change in %

1.3.2 | Europe (58% of Group consolidated sales)

CONSTANT BASIS ADJUSTED FINANCIAL DATA
	Quarter ended 30 June				Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales Same number of working days	1,626.6	1,994.9	(18.5)% (15.7)%	3,272.6	3,887.6	(15.8)% (14.3)%
Gross profit as a % of sales	415.8 25.6%	496.7 24.9%	(16.3)%	845.5 25.8%	978.2 25.2%	(13.6)%
Distribution and administrative expenses as a % of sales	(352.2) (21.7)%	(387.4) (19.4)%	(9.1)%	(720.1) (22.0)%	(771.4) (19.9)%	(6.6)%
EBITA as a % of sales	63.6 3.9%	109.3 5.5%	(41.9)%	125.4 3.8%	206.8 5.3%	(39.4)%

In the first half of 2009, sales increased by 0.7% in Europe compared to the first half of 2008 and reached €3,272.6 million. Acquisitions, net of disposals, accounted for a €707.5 million increase, essentially due to the Hagemeyer transaction, while changes in exchange rates accounted for a €69.9 million decrease, mostly due to the depreciation of the British Sterling against the Euro. The disposal of the Group's distribution network in Hungary resulted in a reduction of sales in an amount of €5.8 million. On a constant basis and same number of working days, sales decreased by 14.3% in the first half of 2009 as a result of the deterioration in economics, copper-based cable prices decrease and of branch closures. In the second quarter of 2009, sales decreased by 15.7% on a constant basis and same number of working days.

In France, sales amounted to €1,116.6 million in the first half of 2009, an 8.3% decrease on a constant basis and same number of working days. This sales evolution was particularly driven by the downturn in the industrial sales, although residential and commercial end-markets were also weak. Despite market conditions, Rexel implemented initiatives which contributed to the sales growth with governmental and institutional customers, and also specific product families such as climate control and security. The Group estimates that it outperformed the market. In the second quarter of 2009, sales decreased by 10.6% on a constant basis and same number of working days.

In the United Kingdom, sales amounted to €449.9 million in the first half of 2009, a 15.4% decrease on a constant basis and same number of working days. Sales were impacted by branch closures and projects on hold, especially in the commercial end-market such as hospitals, education and defence. Sales to large contractors decreased strongly while small contractors were resisting better. The Group estimates that it outperformed the market. In the second quarter of 2009, sales decreased by 17.7% on a constant basis and same number of working days.

In Germany sales amounted to €358.0 million in the first half of 2009, an 11.4% decrease on a constant basis and same number of working days. Residential construction remained weak but the main driver to the sales evolution was the decrease in industrial end-market, especially in the automotive, chemical and engineering sectors, as a result of the depressed economic environment. In the second quarter of 2009, sales decreased by 7.7% on a constant basis and same number of working days helped by sales of solar panels.

In Scandinavia sales amounted to €366.9 million in the first half of 2009, a 13.7% decrease on a constant basis and same number of working days. The activities in Finland recorded a 23.9% drop in sales driven by the business with large national installation companies and lack of projects. In Sweden, sales decreased by 10.8% due to projects delayed or cancelled, especially in the utilities and industrial sectors. Sales in Norway posted a 9.0% decrease, estimated to be in line with the market. Sales to customers in the utilities sector recorded a positive growth in the first half of 2009. In the second quarter of 2009, sales decreased by 15.6% in Scandinavia on a constant basis and same number of working days.

In the first half of 2009, gross profit amounted to €852.2 million, a 1.9% increase compared to 2008. On a constant basis, Adjusted gross margin was 25.8% of sales in the first half of 2009, a 60 basis points improvement from 25.2% in the first half of 2008. This performance is mainly due to favourable changes in product mix, notably cables, to favourable country mix and to better purchasing terms, including synergies from the Hagemeyer integration. In the second quarter of 2009, Adjusted gross margin was 70 basis points higher than in second quarter of 2008, at 25.6% of sales.

On a constant basis, Adjusted distribution and administrative expenses decreased by 6.6% compared to a 15.8% decrease in sales. In order to adjust the costs structure to the current level of demand, specific actions were implemented, the full effect of which will only be reflected in the coming months. Synergies resulting from the integration of Hagemeyer are progressing in accordance with expectations. Adjusted personnel expenses were reduced by 9.5%. The number of employees was reduced by 12.0% compared to 30 June 2008 and 7.4% compared to 31 December 2008 on a constant basis, to 18,258 at 30 June 2009. Lease and maintenance expenses remained flat compared to the first half of 2008 with branch network and real estate rationalization offsetting increases due to inflation, and commercial and logistic initiatives. In the logistics area, rental expenses rose following the transfer and improvement of several logistic centres in France as well as the sale and partial leaseback of 7 logistics platforms representing 125,000 m² in the course of 2008. Bad debt expenses increased compared to the first half of 2008 but were comparable to those in the fourth quarter of 2008. In the second quarter of 2009, Adjusted distribution and administrative expenses decreased by 9.1% on a constant basis.

EBITA amounted to €132.4 million, a 32.7% decrease compared to the first half of 2008. On a constant basis, Adjusted EBITA decreased by 39.4% and Adjusted EBITA margin decreased by 150 basis points to 3.8% in the first half of 2009 for a sales decrease of 15.8%. In the second quarter of 2009, Adjusted EBITA decreased by 41.9% on a constant basis and Adjusted EBITA margin decreased by 160 basis points to 3.9% of sales.

REPORTED			Quarter ended 30 June		Half-year ended 30 June
(in millions of euros)		2009	2008	Change in %	2009	2008	Change in %
Sales		844.4	1,087.5	(22.4)%	1,730.4	2,140.6	(19.2)%
Gross profit		182.3	238.4	(23.6)%	370.4	471.3	(21.4)%
Distribution and administrative expenses		(158.5)	(175.1)	(9.5)%	(336.5)	(359.7)	(6.5)%
EBITA		23.8	63.3	(62.3)%	33.9	111.6	(69.6)%
	as a % of sales	2.8%	5.8%		2.0%	5.2%

1.3.3 | North America (31% of Group consolidated sales)

CONSTANT BASIS ADJUSTED FINANCIAL DATA
	Quarter ended 30 June				Half-year ended 30 June
(in millions of euros)	2009 2008		Change in %	2009	2008	Change in %
Sales	844.4	1,208.3	(30.1)%	1,730.4	2,367.4	(26.9)%
Same number of working days			(29.9)%			(25.9)%
Gross profit	182.0	262.3	(30.6)%	373.2	518.3	(28.0)%
as a % of sales	21.6%	21.7%		21.6%	21.9%
Distribution and administrative expenses	(158.4)	(195.7)	(19.0)%	(336.5)	(399.8)	(15.8)%
as a % of sales	(18.8)%	(16.2)%		(19.5)%	(16.9)%
EBITA	23.6	66.6	(64.5)%	36.7	118.5	(69.0)%
as a % of sales	2.8%	5.5%		2.1%	5.0%

In the first half of 2009, sales in North America amounted to €1,730.4 million, a 19.2% decrease compared to 2008. This decrease includes a €226.8 million favourable effect from changes in foreign exchange rates due to the appreciation of the US dollar against the Euro partly offset by the depreciation of the Canadian dollar. On a constant basis and same number of working days, sales decreased by 25.9% in the first half of 2009 compared to 2008 because of the economic situation, the lower copper-based cable and other commodities prices compared to 2008 and branch closures. In the second quarter of 2009, sales decreased by 29.9% on a constant basis and same number of working days.

In the United States, sales amounted to €1,309.6 million in the first half of 2009, a 30.2% decrease on a constant basis and same number of working days. The downturn of residential construction continued while commercial end-markets weakened and several industrial segments, such as steel, oil and gas and papermills continued slowing down in the first half of 2009. The current recession continues to lead to cancellations or postponements of certain projects. Despite the economic environment, Rexel implemented initiatives in some governmental and institutional projects which mitigated the drop in sales, such as wastewater treatment plants. In the second quarter of 2009, sales decreased by 34.7% on a constant basis and same number of working days.

In Canada, sales amounted to €420.7 million in the first half of 2009, a 7.8% decrease on a constant basis and same number of working days. This evolution was mainly due to the performance in Ontario and Bristish Columbia where manufacturing activity was impacted by the global economic downturn. Sales in Alberta with oil sands and related projects slowed down compared to last year. Focus on energy efficiency initiatives was also still yielding positive results. The Group estimates that it gained market share over the period. In the second quarter of 2009, sales decreased by 11.0% on a constant basis and same number of working days.

In the first half of 2009, gross profit amounted to €370.4 million, a 21.4% decrease compared to 2008. On a constant basis, Adjusted gross margin decreased by 30 basis points compared to 2008 at 21.6% of sales in the first half of 2009. This change mainly resulted from a change in the channel mix (a greater share of direct sales vs. warehouse sales), lower rebates and higher inventory write-downs due to the decrease in sales, as well as some price pressure. In the second quarter of 2009, Adjusted gross margin was 10 basis points lower than in second quarter of 2008, at 21.6% of sales. The gross margin level has been maintained relatively stable since the second quarter of 2008 despite the strong downturn in sales.

On a constant basis, Adjusted distribution and administrative expenses decreased by 15.8% compared to a 26.9% decrease in sales. Adjusted personnel costs decreased by 14.7% on a constant basis due to continuous staff reductions in order to adapt to current sales trends. Headcount was reduced by 15.5% compared to 30 June 2008 and 9.8% compared to 31 December 2008 on a constant basis, to 7,949 at 30 June 2009. Transportation costs also significantly decreased due to lower sales and petrol price. In the second quarter of 2009, Adjusted distribution and administrative expenses decreased by 19.0% on a constant basis.

EBITA thus amounted to €33.9 million in the first half of 2009, a 69.6% decrease compared to 2008. On a constant basis, Adjusted EBITA posted a 69.0% reduction, and decreased from 5.0% to 2.1% as a percentage of sales, i.e. 290 basis points, for a sales decrease of 26.9%. In the second quarter of 2009, Adjusted EBITA decreased by 64.5% on a constant basis and Adjusted EBITA margin decreased by 270 basis points to 2.8% of sales.

REPORTED		Quarter ended 30 June			Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	219.3	246.4	(11.0)%	399.4	449.0	(11.1)%
Gross profit	47.5	60.2	(21.1)%	89.8	111.4	(19.4)%
Distribution and administrative expenses	(35.4)	(40.4)	(12.2)%	(68.6)	(78.8)	(12.9)%
EBITA	12.1	19.8	(39.1)%	21.2	32.6	(35.1)%
as a % of sales	5.5%	8.1%		5.3%	7.3%

1.3.4 | Asia-Pacific (7% of Group consolidated sales)

CONSTANT BASIS ADJUSTED FINANCIAL DATA

	Quarter ended 30 June			Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	219.3	244.2	(10.2)%	399.4	429.2	(7.0)%
Same number of working days			(8.5)%			(6.5)%
Gross profit	47.8	56.7	(15.7)%	90.2	101.5	(11.2)%
as a % of sales	21.8%	23.2%		22.6%	23.6%
Distribution and administrative expenses	(35.4)	(38.2)	(7.3)%	(68.6)	(71.3)	(3.8)%
as a % of sales	(16.2)%	(15.6)%		(17.2)%	(16.6)%
EBITA	12.4	18.5	(33.1)%	21.6	30.2	(28.5)%
as a % of sales	5.6%	7.6%		5.4%	7.0%

In the first half of 2009, sales in Asia-Pacific decreased by 11.1% compared to 2008 to €399.4 million, or 6.5% on a constant basis and same number of working days. The contribution from the acquisition of Suzhou Xidian in China in early 2009 (€18.4 million) was more than off-set by unfavourable changes in exchange rates, which accounted for €38.2 million. In the second quarter of 2009, sales decreased by 8.5% on a constant basis and same number of working days.

In the first half of 2009, sales in Australia amounted to €251.6 million, an 8.8% decrease compared to 2008 on a constant basis and same number of working days. Sales were impacted by economic conditions, particularly the lack of projects compared to the good performance in 2008 and the slowdown of the residential and industry and mining markets. Rexel estimates that it outperformed the market in the first half of 2009. Although slowing down, industrial key accounts and large national contractors were still growth drivers, supported by network optimization. In the second quarter of 2009, sales decreased by 12.4% on a constant basis and same number of working days.

In New-Zealand, sales amounted to €52.0 million in the first half of 2009, a 7.9% decrease compared to 2008 on a constant basis and same number of working days. Sales were affected by the downturn of the residential and commercial construction markets. Rexel estimates gaining market share in a depressed market. In the second quarter of 2009, sales decreased by 9.9% on a constant basis and same number of working days.

In Asia, sales amounted to €95.8 million in the first half of 2009, a 0.9% increase on a constant basis and same number of working days compared to the first half of 2008, which benefited from the Olympics. Activity also started to be impacted by the general economic slowdown, customers' cash shortage and credit constraints. Rexel recorded a good performance in the energy sector. In the second quarter of 2009, sales increased by 3.4% on a constant basis and same number of working days.

In the first half of 2009, gross profit decreased by 19.4% to €89.8 million. On a constant basis, Adjusted gross margin decreased by 100 basis points, to 22.6% in the first half of 2009. This was mainly due to a decrease in Australia (increased mix of key accounts and more projects with lower gross margin together with a decrease in rebates) and New Zealand (due to projects and unfavourable product mix) and to change in the regional mix (increase of the share of Asia where gross margin is lower especially because of projects activity). In the second quarter of 2009, Adjusted gross margin was 140 basis points lower than in second quarter of 2008, at 21.8% of sales due to the further development of the activity in Asia and challenging market conditions in Australia.

On a constant basis, Adjusted distribution and administrative expenses decreased by 3.8% compared to 2008, while sales decreased by 7.0%. Adjusted personnel costs decreased by 3.2% on a constant basis. On a constant basis, headcount was reduced by 7.0% compared to 31 December 2008 to 2,671 at 30 June 2009. In the second quarter of 2009, distribution and administrative expenses decreased by 7.3% on a constant basis, reflecting the speeding-up of costs reduction actions.

EBITA amounted to €21.2 million in the first half of 2009, a 35.1% decrease compared to 2008. On a constant basis, Adjusted EBITA decreased by 28.5%, from 7.0% of sales in the first half of 2008 to 5.4% in the first half of 2009. In the second quarter of 2009, Adjusted EBITA decreased by 33.1% on a constant basis, i.e. 200 basis points to 5.6% of sales.

1.3.5 | Other operations (4% of Group consolidated sales)

REPORTED		Quarter ended 30 June			Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	108.8	135.8	(19.8)%	206.5	152.6	35.3%
Gross profit	32.8	39.3	(16.0)%	63.6	47.6	34.0%
Distribution and administrative expenses	(32.6)	(37.7)	(13.3)%	(62.5)	(46.2)	35.4%
EBITA	0.2	1.6	(86.2)%	1.1	1.4	(15.8)%
as a % of sales	0.2%	1.1%		0.6%	0.9%

CONSTANT BASIS ADJUSTED FINANCIAL DATA
	Quarter ended 30 June				Half-year ended 30 June
(in millions of euros)	2009	2008	Change in %	2009	2008	Change in %
Sales	108.8	138.1	(21.1)%	206.5	251.8	(18.0)%
Same number of working days			(19.9)%			(17.4)%
Gross profit	32.7	39.5	(17.2)%	63.3	74.0	(14.5)%
as a % of sales	30.0%	28.6%		30.7%	29.4%
Distribution and administrative expenses	(32.7)	(38.1)	(14.4)%	(62.5)	(71.4)	(12.5)%
as a % of sales	(30.0)%	(27.6)%		(30.3)%	(28.4)%
EBITA	-	1.4	(96.5)%	0.8	2.6	(68.0)%
as a % of sales	-	1.0%		0.4%	1.0%

In the first half of 2009, sales of the Agencies / Consumer Electronics activity posted a 19.8% decrease on a constant basis and same number of working days driven by Netherlands. Compared with 2008 which benefited from the European football championship, sales in the Netherlands were impacted not only by economic conditions but also by the evolution of the Yen, in which a significant part of purchases are denominated, as main competitors have their purchases denominated in Euro or in Korean Won. The Asian agencies business, focused on sales of luxury goods through retail shops, was impacted by lower store traffic resulting from the economic environment. In Australia, sales decreased as a consequence of the discontinuation of some non core product lines as well as tough market conditions. In the second quarter of 2009, sales decreased by 22.7% on a constant basis and same number of working days.

EBITA improved due to the acquisition of the Hagemeyer's ACE business. On a constant basis, Adjusted, the 68.0% decrease reflects the downturn in activity while costs in corporate holdings were reduced. In the second quarter of 2009, Adjusted EBITA decreased by 96.5% on a constant basis.

1.4 | Risks and uncertainties regarding 2009 second half-year

Risk factors set out in the Document de reference¹ are repeated.

1.5 | Outlook for 2009

In the context of a tough economic environment, Rexel's management continues to take all necessary measures in order to protect the Group's profitability and improve its financial flexibility.

The acceleration of cost adjustmetss leads Rexel to raise its 2009 savings goal from €170 million to €210 million.

With an improved cost base and greater financial flexibility, Rexel is in a good position to further implement its three-pronged strategy of seizing market opportunities, defending margins and deleveraging its balance sheet.

1.6 | Main transactions with related parties

On 11 May 2009, Rexel entered into free share plans for its top executives and key managers, including the members of the Group Executive Committee. These arrangements are detailed in note 10 – Share-based Payments to Rexel's Condensed Consolidated Interim Financial Statements at 30 June 2009.

There was no material change in the arrangements current at 31 December 2008 and disclosed in the Document de reference² .

1 See chapter 4 of the Document de référence n°R.09-022 registered with AMF on 20 April 2009.

² See chapters 13 and 14 (note 23 to the Financial statements at 31 December 2008) of the Document de référence n°R.09- 022 registered with AMF on 20 April 2009

2. | LIQUIDITY AND CAPITAL RESOURCES OF THE GROUP

2.1 | Cash flow at 30 June 2009 and 2008

The following table sets out Rexel's cash flow for the half-years and quarters ended 30 June 2009 and 2008.

		Quarter ended 30 June			Half-year ended 30 June
(in millions of euros)		2009	2008	2009	2008
Operating cash flow(1)		99.3	209.5	178.2	363.3
Interest	(a)	(24.5)	(51.8)	(59.5)	(81.4)
Taxes	(a)	(28.3)	(33.2)	(43.9)	(57.6)
Changes in working capital requirement		139.1	26.5	238.0	(22.0)
Net cash flow from operating activities	(b)	185.6	151.0	312.8	202.3
Net cash flow from investing activities		(37.3)	1,538.5	(53.1)	(1,392.3)
Including operating capital expenditures (2)	(c)	(9.8)	0.3	(19.9)	16.9
Net cash flow from financing activities		(167.8)	(1,454.5)	(403.6)	1,503.6
Net cash flow		(19.5)	235.0	(143.9)	313.6
Free cash flow:
- before interest and taxes (b) – (a) + (c)		228.6	236.3	396.3	358.2
- after interest and taxes (b) + (c)		175.8	151.3	292.9	219.2
					31 December
WCR as a % of sales(3) at:				30 June 2009	2008
Reported				11.4%	12.0%
On a constant basis				11.4%	12.0%
(1) Before interest, taxes and changes in working capital requirement.
(2) Net of disposals.
(3) Working capital requirement, end of period, divided by last 12-month sales

These figures include the Hagemeyer businesses in the first quarter of 2009 but not in the first quarter of 2008.

2.1.1 | Cash flow from operating activities

Rexel's net cash flow from operating activities was a €312.8 million inflow in the first half of 2009 compared to €202.2 million in the first half of 2008. In the second quarter of 2009, cash flow from operating activities amounted to a €185.6 million inflow compared to €151.0 million in the second quarter of 2008

Operating cash flow

Operating cash flow before interest, income tax and changes in working capital requirements decreased from €363.3 million in the first half of 2008 to €178.2 million in the first half of 2009, as a result of lower operating income before depreciation, other income and other expenses (EBITDA) and higher restructuring costs. EBITDA decreased from €381.1 million in the first half of 2008 to €230.4 million in the first half of 2009. This decrease mainly reflects the lower activity in 2009 compared to 2008 as a result of the deteriorated economic environment. Restructuring costs incurred in the first half of 2009 amounted to €46.5 million compared to €16.6 million in the first half of 2008.

Interest and taxes

In the first half of 2009, interest paid amounted to €59.5 million compared to €81.4 million in the first half of 2008. From the second quarter of 2008, interest paid reflects the terms of the 2008 Senior Credit Agreement entered into for the Hagemeyer transaction.

In the first half of 2009, €43.9 million income taxes were paid compared to €57.6 million paid in the first half of 2008, reflecting the lower level of activity.

Changes in working capital requirement

Changes in working capital requirement amounted to an inflow of €238.0 million in the first half of 2009 compared to an outflow of €22.0 million in the first half of 2008. As a percentage of the last twelve month sales, the working capital requirement decreased from 12.0% at 31 December 2008 on a constant basis to 11.4% at 30 June 2009. At 30 June 2009, working capital requirement included the negative effect of changes in payments terms in France in accordance with a new regulation (socalled LME, "Loi de modernisation de l'économie"), which is estimated at 30 basis points.

2.1.2 | Cash flow from investing activities

Rexel's cash flow from investing activities consists of acquisitions and disposals of fixed assets, as well as financial investments. Cash flow from investing activities amounted to a €53.1 million outflow in the first half of 2009 compared to a €1,392.3 million outflow in the first half of 2008.

	Quarter ended 30 June		Half-year ended 30 June
(in millions of euros)	2009	2008	2009	2008
Acquisitions of operating fixed assets(1)	(9.8)	0.3	(19.9)	16.9
Acquisitions of financial fixed assets(1)	(27.7)	684.6	(33.4)	(2,262.8)
Net change in long-term investments	0.2	853.6	0.2	853.6
Net cash flow from investing activities	(37.3)	1,538.5	(53.1)	(1,392.3)
(1) Net of disposals.

Acquisitions and disposal of tangible fixed assets

Acquisitions of operating fixed assets, net of disposals, were a €19.9 million outflow in the first half of 2009 compared to a €16.9 million inflow in the first half of 2008.

In the first half of 2009, gross capital expenditures amounted to €20.6 million, i.e. 0.4% of the sales of the period, of which €8.8 million related to IT systems, €8.2 million to the renovation of existing branches and the opening of new branches, €1.8 million to logistics and €1.8 million to other investments. Disposals of fixed assets in the first half of 2009 amounted to €2.4 million and mainly related to the disposal of three branches, one in the United States and two in the United Kingdom. Net changes in the related payables and receivables amounted to €1.7 million, accounting for an increase in the capital expenditures of the period.

In the first half of 2008, gross capital expenditures amounted to €40.6 million, i.e. 0.8% of the sales of the period, of which €12.3 million related to IT systems, €16.8 million to the renovation of existing branches and the opening of new branches, €9.9 million to logistics and €1.6 million to other investments. Disposals of fixed assets in the first half of 2008 amounted to €65.2 million and mainly related to a sale and leaseback transaction in the first half of 2008, on 7 logistic centres in France for an amount of €62.9 million. Changes in the related suppliers payable amounted to €7.7 million, accounting for an increase in the capital expenditures of the period.

Financial investments

Rexel's net financial investments represented a net outflow of €33.4 million in the first half of 2009 compared to €2,262.8 million in 2008.

In the first half of 2009, outflows in respect of financial investments mainly included the acquisition of 63.5% of the shares of Suzhou Xidian Co. Ltd. in China for CNY41.0 million (€4.7 million) and of additional Hagemeyer shares for €27.2 million, including acquisitions related costs. Earn-out and price adjustments on previous acquisitions amounted to a net effect of €1.5 million.

In the first half of 2008, outflows in respect of financial investments mainly included the completion of the Hagemeyer offer for an amount of €3,043.8 million net of cash acquired. The disposal of the Sonepar entities in June 2008 resulted in an inflow of €730.5 million. The net proceeds resulting from the asset swap are comprised of a €177.1 million cash inflow in respect of the disposal of Rexel's business in Germany and a €84.3 million cash outflow in respect of the acquisition of Sonepar's business in Sweden. The other investments are comprised of the acquisition of Beacon in the United States for US \$20.1 million (€12.1 million), an earn-out relating to the acquisition of Huazhang in China for €7.3 million and a €2.7 million price adjustment related to the EIW company in Australia.

Changes in long-term investments

Net cash from changes in long term investments represents a net inflow of €0.2 million compared to a net inflow of €853.6 million in the first half of 2008.

Net cash recorded in the first half-year of 2008 mainly reflected the intercompany loan repayment from the Sonepar entities for an amount of €853.1 million.

2.1.3 | Cash flow from financing activities

Cash flow from financing activities is comprised of changes in indebtedness, share capital issuances and payment of dividends.

In the first half of 2009, financing activities accounted for a €403.6 million outflow. Outflows were comprised of:

• x Repayment of Facility D of the Senior Credit Agreement for €86.3 million;
• x Changes in other credit facilities for €42.2 million;
• x Repayments of finance lease liabilities for €4.6 million;
• x Decrease in securitization programmes for €279.8 million;

While inflows included:

• x Net disposals of treasury shares for €8.6 million; and
• x Contribution received from minority shareholders for €0.7 million.

In the first half of 2008, financing activities accounted for €1,503.6 million inflow. Inflows were comprised of:

• x Net change in credit facilities for €1,621.5 million, which included the drawing under the new Senior Credit Agreement for €4,244.5 million, net of transaction fees. This amount was used to acquire the Hagemeyer shares and bonds for €3,145.8 million, as well as to repay the 2007 Senior Credit Agreement for €930.0 million and refinance Hagemeyer pre-acquisition debt for €260.0 million. In June 2008, a reimbursement of €1,400 million of the new Senior Credit Agreement was made following disposals to Sonepar. In May 2008, Rexel redeemed the bonds issued in 1998 for a net amount of €45.7 million corresponding to the par value of the bond issuance;
• x Increase in securitization programmes for €23.3 million;

While outflows included:

• x Repayments of finance lease liabilities for €44.6 million;
• x The €0.37 dividend paid in June 2008 to the shareholders for a total of €94.4 million; and
• x Net acquisition of treasury shares for €2.2 million.

2.2 | Sources of financing of the Group

In addition to the cash from operations and equity, the Group's main sources of financing are multilateral credit lines, debt issuances and securitization programmes. At 30 June 2009, Rexel's consolidated net debt amounted to €2,707.9 million, and was made up as follows:

	30 June 2009			31 December 2008
		Non			Non
(in millions of euros)	Current	current	Total	Current	current	Total
Senior credit facility	164.3	2,150.6	2,314.9	178.2	2,225.9	2,404.1
Securitization	-	1,013.7	1,013.7	-	1,255.0	1,255.0
Bank loans	8.7	2.5	11.2	5.2	3.7	8.9
Bank overdrafts and other credit facilities	61.0	-	61.0	91.4	-	91.4
Finance lease obligations	7.8	14.8	22.6	9.6	17.4	27.0
Less transaction costs	(13.8)	(27.7)	(41.5)	-	(47.4)	(47.4)
Total financial debt and accrued interest	228.0	3,153.9	3,381.9	284.4	3,454.6	3,739.0
Cash and cash equivalents			(674.0)			(807.0)
Net financial debt			2,707.9			2,932.0

Net financial debt is detailed in note 12 – "Financial liabilities" to Rexel's Condensed Consolidated Interim Financial Statements at 30 June 2009.

As of 30 June 2009, the Group's liquidity amounted to €1.2 billion including €613 million of cash net of overdrafts and €585 million of undrawn revolver credit. Rexel's liquidity therefore exceeds the €858 million mandatory senior debt repayments through the end of 2011.

2.3 | Post-closing events

Further to the adoption of the terms and conditions of a draft amendment by the Management Board on 24 July 2009 and subject to the prior authorisation of the Supervisory Board, Rexel should enter on 30 July 2009 into an amendment to the 2008 Senior Credit Agreement initially executed on 19 December 2007 with Calyon, Crédit Industriel et Commercial, HSBC France, ING Bank N.V., Natixis, The Royal Bank of Scotland Plc as mandated lead arrangers and Calyon as Facility Agent and Security Agent.

The key terms and conditions of this amendment are detailed in note 17 – "Subsequent events at 30 June 2009" to Rexel's Condensed Consolidated Interim Financial Statements at 30 June 2009.

II. Condensed consolidated interim financial statements

This document is a free translation from French to English of Rexel's original condensed consolidated interim financial statements for the period ended 30 June 2009 and is provided solely for the convenience of English speaking readers. In the event of any ambiguity or discrepancy between this unofficial translation and the original condensed consolidated interim financial statements for the period ended 30 June 2009, the French version will prevail.

Consolidated income statement…………………………………………………………………………………………22
Consolidated statement of comprehensive income…………………………………………………………………23
Consolidated balance sheet……………………………………………………………………………………………24
Consolidated statement of cash flows……………………………………………………………………………………25
Consolidated statement of changes in shareholders' equity…………………………………………………………26
Notes…………………………………………………………………………………………………………………………27
1. General information 27
2. Significant accounting policies27
3. Business combinations29
4. Segment reporting 30
5. Distribution & administrative expenses32
6. Other income & other expenses32
7. Financial expenses (net) 34
8. Income tax 34
9. Earnings per share 35
10. Share-based payments35
11. Impairment of goodwill and other intangible assets36
12. Financial liabilities37
13. Market Risks and Financial Instruments40
14. Seasonality 43
15. Litigation 43
16. Related party transactions44
17. Events after the reporting period 44
18. Quarterly information 46

Consolidated income statement

			For the period ended 30 June
(in millions of euros)	Note	2009	2008 (1) (2)
Sales	4	5,608.9	5,992.2
Cost of goods sold		(4,232.9)	(4,525.2)
Gross profit		1,376.0	1,467.0
Distribution and administrative expenses	5	(1,197.0)	(1,132.0)
Operating income before other income and expenses		17 9.0	335.0
Other income	6	3.3	118.5
Other expenses	6	(81.1)	(40.7)
Operating income		101.2	412.8
Financial income		25.5	39.9
Interest expense on borrowings		(72.9)	(93.0)
Refinancing related expenses		-	(11.0)
Other financial expenses		(27.3)	(18.9)
Financial expenses (net)	7	(74.7)	(83.0)
Net Income before income tax		26.5	329.8
Income tax	8	(8.5)	(70.4)
Net income		18.0	259.4
Attributable to:
Equity holders of the parent		17.9	258.7
Minority interests		0.1	0.7
Earnings per share:
Basic earnings per share (in euros )	9	0.07	1.01
Fully diluted earnings per share (in euros )	9	0.07	0.99

(1) Reported income statement at 30 June 2008 was restated retrospectively to reflect changes according to IFRIC 13 (see note 2.2.1)

(2) Hagemeyer retained entities were consolidated from 1 April 2008.

Consolidated statement of comprehensive income

		For the period ended 30 June
(in millions of euros)	2009	2008
Net income	18.0	259.4
Foreign currency translation	68.2	(45.1)
Net loss on cash flow hedges Income tax	(12.4) 2.5 (9.9)	15.1 (5.7) 9.4
Net gain on available for sale financial assets Income tax	- -	0.5 (0.2)
	-	0.3
Other comprehensive income / (loss) for the period, net of tax	58.3	(35.4)
Total comprehensive income for the period, net of tax	76.3	224.0
Attributable to:
Equity holders of the parent Minority interest	76.4 (0.1)	223.3 0.7

Consolidated balance sheet

(in millions of euros)	Note	At 30 June 2009	At 31 December
			2008 (1)
Assets
Goodwill		3,713.5	3,662.4
Intangible assets		930.3	927.3
Property, plant & equipment		297.5	317.1
Long-term investments		52.1	53.7
Deferred tax assets		266.6	247.1
Total non-current assets		5,260.0	5,207.6
Inventories		1,213.9	1,329.0
Trade accounts receivable		2,056.4	2,363.3
Income tax receivable		29.8	4.0
Other accounts receivable		342.6	477.9
Assets classified as held for sale Cash and cash equivalents	12.1	7.0 674.0	4.6 807.0
Total current assets		4,323.7	4,985.8
Total assets		9,583.7	10,193.4
Equity
Share capital		1,290.7	1,280.0
Share premium		1,392.3	1,409.9
Reserves and retained earnings		619.6	534.4
Total equity attributable to equity holders of the parent		3,302.6	3,224.3
Minority interests		8.1	24.1
Total equity		3,310.7	3,248.4
Liabilities Interest bearing debt		3,153.9	3,454.6
Employee benefits	12.1	181.3	175.4
Deferred tax liabilities		233.4	225.4
Provision and other non-current liabilities		241.7	229.2
Total non-current liabilities		3,810.3	4,084.6
Interest bearing debt	12.1	224.2	276.1
Accrued interest	12.1	3.8	8.3
Trade accounts payable		1,655.8	1,930.0
Income tax payable		17.6	21.5
Other current liabilities		561.3	624.5
Total current liabilities		2,462.7	2,860.4
Total liabilities		6,273.0	6,945.0
Total equity and liabilities		9,583.7	10,193.4

(1) Reported balance sheet at 31 December 2008 was restated retrospectively to reflect changes in the Hagemeyer purchase price allocation according to IFRS 3 provisions (see note 3.1)

Consolidated statement of cash flows

			For the period ended 30 June
(in millions of euros)	Note	2009	2008
Cash flows from operating activities
Operating income		101.2	412.8
Depreciation, amortisation and impairment of assets		65.5	46.1
Employee benefits		(7.4)	(4.3)
Change in other provisions		5.2	5.5
Other non-cash operating items		13.7	(96.8)
Interest paid		(59.5)	(81.4)
Income tax paid		(43.9)	(57.6)
Operating cash flows before change in working capital
requirements		74.8	224.3
Change in inventories		151.4	16.7
Change in trade receivables		354.1	(100.8)
Change in trade payables		(313.1)	86.4
Changes in other working capital items		45.6	(24.3)
Change in working capital		238.0	(22.0)
Net cash from operating activities		312.8	202.3
Cash flows from investing activities
Acquisition of property, plant and equipment		(22.4)	(48.3)
Proceeds from disposal of property, plant and equipment		2.5	65.2
Acquisition of subsidiaries, net of cash acquired		(33.4)	(3,155.2)
Proceeds from disposal of subsidiaries, net of cash disposed		-	892.4
Change in long-term investments		0.2	853.6
Net cash from investing activities		(53.1)	(1,392.3)
Cash flows from financing activities
Contribution received from minority shareholders		0.7	-
Disposal / (Repurchase) of treasury shares		8.6	(2.2)
Net change in credit facilities and other financial borrowings	12.3	(128.5)	1,621.5
Net change in securitisation	12.3	(279.8)	23.3
Payment of finance lease liabilities	12.3	(4.6)	(44.6)
Dividends paid		-	(94.4)
Net cash from financing activities		(403.6)	1,503.6
Net (decrease) / increase in cash and cash equivalents		(143.9)	313.6
Cash and cash equivalents at the beginning of the period		807.0	515.2
Effect of exchange rate changes on cash and cash equivalents		10.9	(4.9)
Cash and cash equivalents at the end of the period		674.0	823.9

Total	3,227.3	(122.3)	(29.9)	0.3 -	(151.9)	231.5	79.6	22.0	(2.2)	(94.4)	16.1	3,248.4	68.2	(9.9)	58.3	18.0	76.3	(0.0) -	2.7 -	8.4	(25.1)	3,310.7
Minority interests	6.0	0.7	-		0.7	1.3	2.0	-	-	-	16.1	24.1	(0.2)	-	(0.2)	0.1	(0.1)			-	(15.9)	8.1
attributable to the group Total	3,221.3	(123.0)	(29.9)	0.3	(152.6)	230.2	77.6	22.0	(2.2)	(94.4)	-	3,224.3	68.4	(9.9)	58.5	17.9	76.4	(0.0)	2.7	8.4	(9.2)	3,302.6
Treasury Shares	(8.3)	-	-	-	-	-	-	-	(2.2)	-	-	(10.5)	-	-	-	-	-	-	-	8.4	-	(2.1)
value Fair	5.1	-	(29.9)	0.3	(29.6)	-	(29.6)	-	-	-	-	(24.5)	-	(9.9)	(9.9)	-	(9.9)	-	-	-	-	(34.4)
currency translation Foreign	(18.8)	(123.0)	-	-	(123.0)	-	(123.0)	-	-	-	-	(141.8)	68.4	-	68.4	-	68.4	-	-	-	-	(73.4)
and other Retained earnings reserves	553.4	-	-	-	-	230.2	230.2	22.0	-	(94.4)	-	711.2	-	-	-	17.9	17.9	6.9	2.7	-	(9.2)	729.5
premium Share	1,409.9	-	-	-	-	-	-	-	-	-	-	1,409.9	-	-	-	-	-	(17.6)	-	-	-	1,392.3
Share capital	1,280.0	-	-	-	-	-	-	-	-	-	-	1,280.0	-	-	-	-	-	10.7		-	-	1,290.7
(in millions of euros)	At 1 January 2008	Foreign currency translation	Cash flow hedges	Securities available for sale assets	me and expenses recognised directly in equity Inco	Net income	me for the period mprehensive inco Total co	Share-based payments	Treasury Shares	Dividends paid	Minority interests in companies acquired or sold	mber 2008 At 31 Dece	Foreign currency translation	Cash flow hedges	me and expenses recognised directly in equity Inco	Net income	me for the period mprehensive inco Total co	Issue of share capital (1)	Share-based payments	Treasury shares	Transactions with minority shareholders (see note 3.1)	At 30 June 2009

Consolidated statement of changes in shareholders' equity

(1) Increase in capital relating to free shares creation

Notes

1. | GENERAL INFORMATION

Rexel was incorporated on 16 December 2004. Shares of Rexel were admitted to trading on the Eurolist market of Euronext Paris on 4 April 2007. The group consists of Rexel and its subsidiaries (together referred to here as "the Group" or "Rexel").

The Group is involved in the business of the distribution of low and ultra low voltage electrical products to professional customers, and serves the needs of a large variety of customers and markets in the fields of construction, industry and services. The product offer covers electrical installation equipment, conduits and cables, lighting, security and communication, climate control, tools, and white and brown products. The principal markets in which the Group operates are in Europe, North America (United States and Canada) and Asia-Pacific (mainly in Australia, New Zealand and China). The Group also operates the Agencies-Consumer Electronics division as part of the assets acquired from Hagemeyer in 2008.

The present condensed consolidated interim financial statements cover the period from 1 January 2009 to 30 June 2009, and have been authorised for issue by the Management Board on 24 July 2009. The company acquired Hagemeyer retained entities end of March 2008. Comparative information provided for the first semester 2008 does include Hagemeyer operations only as from 1 April 2008.

2. | SIGNIFICANT ACCOUNTING POLICIES

2.1 | Statement of compliance

These condensed consolidated interim financial statements (hereafter referred to as "the condensed financial statements") for the period ended 30 June 2009 have been prepared in accordance both with the International Financial Reporting Standards (IFRS) as adopted by the European Union and those approved by the IASB and applicable at 30 June 2009. In particular, the condensed financial statements have been prepared in accordance with standard IAS 34, relating to Interim Financial Reporting. Pursuant to IAS 34, they do not include all the information required in the annual financial statements, but only selected explanatory notes, and should be read in conjunction with the consolidated financial statements for the year ended 31 December 2008 included in the Document de référence registered by the Autorité des Marchés Financiers on 20 April 2009 under number R.09-022.

2.2 | Basis of preparation

The accounting policies used in the condensed financial statements for the period ended 30 June 2009 are identical to those used and described in the consolidated financial statements for the year ended 31 December 2008. New standards and interpretations applicable starting 1 January 2009 did not have any significant impact on the Group's financial situation or condensed financial statements for the period ended 30 June 2009.

The preparation of financial statements in accordance with IFRS requires management to make judgments, estimates, and assumptions that affect the application of policies and reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed frequently. The effect of changes in accounting estimates is accounted for during the period in which they are made and all subsequent periods.

2.2.1 New accounting standards and interpretations in effect starting from 2009

The following new and amended standards and interpretations previously endorsed by the EU were applied for the first time in the financial statements for 2009:

• x IFRS 8 "Operating Segments" supersedes IAS 14 "Segment Reporting" and adopts a full management approach to identifying and measuring the result of reportable operating segments. The information presented in Note 4 in respect of the year 2008 has been restated to comply with this new standard. The only material change is that non operating segments, such as corporate holdings, are now presented as reconciling items between the total of operating segments and the Group consolidated figures whereas they were included in the Other operations segment in accordance with IAS 14.
• x IFRIC 13 "Customer Loyalty Programmes" requires customer loyalty programmes to be accounted for as a separate component of the sales transaction in which they are granted. A portion of the fair value of the consideration received is allocated to the award credits and deferred. This portion is then recognised as revenue over the period the award credits are redeemed. Until 2008, the Group used to provide for the estimated future costs of supplying the awards as marketing expenses presented in the line item "distribution and administrative expenses". The effect of this change on the 2008 income statement is detailed in the table below:

		For the period ended
(in millions of euros)	30 June 2008	31 December 2008
Sales …………………………………………………… " "	1.3	2.9
Cost of goods sold ………………………………………… " "	(2.4)	(5.8)
Gross profit ……………………………………………… " "	(1.1)	(2.9)
Distribution and administrative expenses …………………" "	1.1	2.9
Operating income ………………………………………. " "	-	-

The change had no material effect on the balance sheet at 1 January 2008 or 31 December 2008.

The following amended standards and interpretations endorsed by the EU are also applicable for the first time in the financial statements for 2009 but had no material effect on the Group's reporting:

• x IAS 1 "Presentation of Financial Statements" has been amended to enhance the usefulness of information presented in the financial statements. The key change is the introduction of a new statement of comprehensive income that combines all items of income and expense recognised in profit or loss together with other comprehensive income.
• x IAS 23 "Borrowing Costs" has been revised to eliminate the option of expensing all borrowing costs and requires these costs to be capitalised if they are directly attributable to the acquisition, construction, or production of a qualifying asset.
• x Amendment to IFRS 2 "Share-based Payment" Vesting Conditions and Cancellations clarifies the definition of a vesting condition and prescribes the treatment for an award that is effectively cancelled.
• x Amendment to IAS 32 "Financial Instruments: Presentation" and IAS 1 "Presentation of Financial Statements" – Puttable Financial Instruments and Obligation Arising on Liquidation allow a limited scope exception for puttable financial instruments to be classified as equity if they fulfil a number of specified features.
• x Amendment to IFRS 1 "First-time Adoption of International Financial Reporting Standards" and amendment to IAS 27 "Consolidated and Separate Financial Statements" – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate that states the valuation principles for such investments in separate financial statements;
• x Improvements to IFRSs, issued in May 2008, introducing changes to several standards.

The Group elected to apply by anticipation the interpretation IFRIC 16 "Hedges of a Net Investment in a Foreign Operation", including the amendment of §14 from improvement to IFRS issued by the IASB in April 2009, which clarifies such use of hedge accounting. It became effective for financial years beginning on or after 1 October 2008 and had no material effect on the Group's financial statements.

2.2.2 Accounting standards and interpretations approved by the European Union not yet in effect

The Group elected not to apply by anticipation the following new and amended standards and interpretations endorsed by the EU:

• x Improvements to IFRSs issued in May 2008 in respect of IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations" are effective for financial years beginning on or after 1 July 2009. The amendment will have to be applied on a prospective basis only.
• x Revised IFRS 3 "Business Combinations" and IAS 27 "Consolidated and Separate Financial Statements" issued in January 2008 change some of the accounting principles for business combinations. They will be effective for financial years beginning on or after 1 July 2009 and mainly apply to new business combinations on a prospective basis.

3. | BUSINESS COMBINATIONS

3.1 | Hagemeyer Acquisition

Completion of the purchase price allocation

In the first quarter of 2009, Rexel completed the purchase price allocation to the identifiable assets and liabilities acquired from Hagemeyer and recorded certain adjustments to goodwill as determined on a provisional basis at 31 December 2008. Thus, the balance-sheet at 31 December 2008 was adjusted retrospectively for comparison purposes.

At 30 June 2009, the final allocation of the Hagemeyer purchase price is as follows:

(in millions of euros)

Preliminary goodwill on acquisition at 31 December 2008 …………" "	1,189.1
Adjustment on provision and other non-current liabilities…………………" " Deferred tax adjustment………………………………………………………" "	5.8 (9.6)
Others………………………………………………………………………… " "	0.1
Final goodwill on acquisition at 30 June 2009 …………………………" "	1,185.4

Acquisition of non-controlling interests in Hagemeyer

Following the completion of the public offer on the Hagemeyer securities in 2008, Rexel initiated a take-over squeeze-out procedure in accordance with the Dutch Civil Code in order to acquire the remaining shares not tendered and not held by Kelium or Hagemeyer. In this respect, the Enterprise Chamber in The Netherlands awarded Kelium the right to compulsorily acquire all Hagemeyer shares. The Enterprise Chamber set the acquisition price for the shares at €4.85 per share, such amount to be increased with Dutch statutory interest as from 14 March 2008 (the settlement date under the Offer), until the day on which the shares are transferred to Kelium resulting in a payment of €5.18 per share. In this respect, Rexel acquired in the second quarter of 2009, the remaining outstanding 5,085,965 shares for a total consideration of €26.3 million. Thus, at 30 June 2009, Rexel, through Kelium, holds the full ownership of Hagemeyer NV.

This transaction was accounted for as an equity transaction. As a result, the difference between the carrying amount of the minority interests acquired and the fair value of the consideration paid was recognised directly as a decrease of the Group shareholders' equity for €9.2 million.

3.2 | Other acquisition

In the first semester of 2009, Rexel completed the acquisition of 63.5% of the shares of Xidian (China) for a total consideration of CNY41.0 million (€4.7 million) net of cash acquired. Following the take-over, Xidian proceeded to a share capital increase of CNY18.0 million (€2.1 million) that was subscribed by Rexel proportionally to its ownership interest in the company. This transaction is not deemed to be material on the financial situation of the Group. As a result, neither sales nor profit and loss have been provided for the combined entity, had this acquisition been effective on 1 January 2009.

4. | SEGMENT REPORTING

In accordance with IFRS 8, operating segments are based on the Group's financial reporting structure. The Group's financial reporting is organised into geographical areas for its electrical equipment distribution business while non-core operations and certain businesses managed directly at Group level are reported independently.

Based on this structure, the reportable segments are Europe, North America and the Asia-Pacific zone, which include the electrical equipment distribution business of the Group in these areas. The other operating segments are aggregated. They include the Group's electrical equipment distribution business in Chile and other operations such as the Agencies / Consumer Electronics division and businesses managed at Group level.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.

Geographical segment information for the periods ended 30 June 2009 and 30 June 2008

2009
(in millions of euros)	Europe	North America	Asia Pacific	Other segments	Total Operating Segments	Corporate Holdings	Total Group
For the period ended 30 June ""
Sales to external customers……………""	3,272.6	1,730.4	399.4	206.5	5,608.9	-	5,608.9
EBITA (1)………………………………… ""	132.4	33.9	21.2	6.7	194.2	(5.6)	188.6
Total of allocated assets "" (excl. goodwill)………………………	3,281.7	1,088.9	331.0	184.1	4,885.7	7.1	4,892.8
Goodwill…………………………………. ""	2,590.9	911.4	203.0	8.2	3,713.5	-	3,713.5

2008
(in millions of euros)	Europe	North America	Asia Pacific	Other segments	Total Operating Segments	Corporate Holdings	Total Group
For the period ended 30 June ""
Sales to external customers……………""	3,250.0	2,140.6	449.0	152.6	5,992.2	-	5,992.2
EBITA (1)………………………………… ""	196.5	111.6	32.6	7.9	348.6	(6.5)	342.1
For the period ended 31 December
Total of allocated assets "" (excl. goodwill)………………………	3,677.6	1,308.0	283.0	185.9	5,454.5	13.8	5,468.3
Goodwill…………………………………. ""	2,579.6	902.2	174.0	6.6	3,662.4	-	3,662.4

(1) EBITA is defined as operating income before other income, other expenses and amortisation of intangible assets recognised upon allocation of the acquisition price of acquired entities.

The reconciliation of the total of operating income before other income and expenses with the Group consolidated income before income taxes is presented in the following table:

	For the period ended 30 June
(in millions of euros)	2009	2008
EBITA - Total Group…………………………………………""	188.6	342.1
Amortisation of intangibles……………………………………""	(9.6)	(7.1)
Other income and other expenses……………………… ""	(77.8)	77.8
Net financial expenses…………………………………… ""	(74.7)	(83.0)
Group consolidated income before income tax… ""	26.5	329.8

The reconciliation of the total allocated assets with the Group consolidated total assets is presented in the following table:

	At 30 June	At 31 December
(in millions of euros)	2009	2008
Total allocated assets & goodwill ……………………. ""	8,606.3	9,130.7
Deferred tax assets………………………………………… ""	266.6	247.1
Income tax receivable……………………………………… ""	29.8	4.0
Assets classified as held for sale……………………………""	7.0	4.6
Cash and cash equivalents…………………………………. ""	674.0	807.0
Group consolidated total assets………………………… ""	9,583.7	10,193.4

5. | DISTRIBUTION & ADMINISTRATIVE EXPENSES

		For the period ended 30 June
(in millions of euros)	2009	2008
Personnel costs (salaries & benefits) ……….……………" "	692.9	665.8
Building and occupancy costs ………………………………" "	143.9	126.9
Other external costs …………………………………………" "	282.4	279.7
Depreciation expense ………………………………………" "	41.8	39.0
Amortisation of intangibles……………………………….…" "	9.6	7.1
Bad debt expense ……………………………………………" "	26.4	13.5
Total distribution and administrative expenses " "	1,197.0	1,132. 0

6. | OTHER INCOME & OTHER EXPENSES

	For the period ended 30 June
(in millions of euros)	2009	2008
Capital gains …………………………….……………………" "	1.8	118.4
Other operating income ………………………………………" "	0.8	-
Release of unused provisions ………………………………" "	0.7	0.1
Total other income ……………………………………… " "	3.3	118. 5
Restructuring costs ………………………….………………" "	(53.0)	(22.2)
Loss on non-current assets disposed of ……………………" "	(10.6)	(0.3)
Costs related to transactions following the IPO….…………" "	(2.3)	(17.5)
Goodwill & assets impairment………………………………" "	(14.2)	-
Other operating expenses ………………………………… " "	(1.0)	(0.7)
Total other expenses …………………………………… " "	(81.1)	(40.7)

6.1 | Other income

Capital gains

For the period ended 30 June 2009, capital gains included proceeds from disposal of three branches, one in the United-States for €1.3 million and two in the United-Kingdom for €0.2 million.

For the period ended 30 June 2008, capital gains mainly included a €107.5 million gain related to the disposal of Rexel historical business in Germany to Sonepar as part of the Hagemeyer transaction. Capital gains also included for an amount of €10.0 million, the disposal of finance lease contracts relating to seven logistic centres in France.

6.2 | Other expenses

Restructuring costs

For the period ended 30 June 2009, this line-item includes €53.0 million relating to restructuring costs to adapt to current trading and integration costs following Hagemeyer acquisition. These costs are mainly relating to downsizing of distribution network and workforce adaptation, and are incurred in (i) Spain for €14.2 million, (ii) France for €11.3 million, (iii) the United States for €6.7 million, (iv) Germany for €5.2 million and (v) other European countries for €11.0 million.

For the period ended 30 June 2008, restructuring and implementation costs have reached €22.2 million and were mainly related to integration of Hagemeyer entities for €12.2 million, reorganization costs in the United States for €7.0 million.

Costs related to transactions following the IPO

For the period ended 30 June 2009, the impact of the costs related to transactions following IPO concerns the free shares scheme implemented at the time of the IPO for €2.3 million. This non cash expense has been determined according to provisions IFRS 2 ("Share-based payments").

For the period ended 30 June 2008, the impact of the free shares scheme was €17.5 million.

Goodwill and assets impairment

For the period ended 30 June 2009, goodwill was impaired for €8.0 million in Slovakia and €4.6 million in Finland (see note 11). In addition, an impairment of €1.4 million was recognised on a building in Belgium to bring its carrying value to fair value less costs to sell before being classified as an asset held for sale.

Loss on non current assets disposed of and written off

At 30 June 2009, this line-item mainly includes for €4.0 million the loss on disposal in April 2009 of operations in Hungary, the write-off of IT licences in France for €4.1 million and the write-off of branches in Spain for €1.8 million.

7. | FINANCIAL EXPENSES (NET)

	For the period ended 30 June
(in millions of euros)	2009	2008
Expected return on employee benefit plan assets …………………" "	20.1	18.4
Interest income on cash and cash equivalents …………………… " "	0.9	1.4
Interest income on receivables and loans ………………………… " "	1.3	1.7
Gain on financial instruments held for trading ………………………" "	3.2	6.1
Other financial income (1)………………………………………………" "	-	12.3
Financial income ……………………………………………………" "	25.5	39.9
Interest expense on financial debt (stated at amortised costs) : …" "	(59.8)	(106.0)
- Senior debt………………………….………………………………………" "	(33.1)	(81.0)
- Senior Subordinated Notes and indexed Bonds ………………………" "	(0.1)	(0.7)
- Securitisation ………………………….……………………………………" "	(11.8)	(23.3)
- Other financing ……………………………………………………… " "	(6.5)	(5.5)
- Finance leases ……………………………………….……………………" "	(1.0)	(2.2)
- Amortisation of transaction costs ………………………………………" "	(7.3)	(21.6)
- less arrangement fees and interests recharged to Sonepar (2)………" "	-	28.3
Gains and losses on derivative instruments previously deferred
" " in equity and recycled in the income statement	(12.1)	5.8
Change in fair value through profit and loss (foreign exchange	(4.6)	(2.2)
rate)……………. …………………………………………………… " "
Foreign exchange gain (loss) on financial liabilities ……………… " "	3.6	9.4
Interest expense on borrowings …………………………………" "	(72.9)	(93.0)
Write-off of transaction costs related to 2007 SCA…………….	-	(11.0)
Refinancing costs …………………………………………………" "	-	(11.0)
Interest cost of employee benefit obligation and other long-term " " liabilities ………	(26.8)	(18.8)
Financial expenses (other) …………………………………………" "	(0.5)	(0.1)
Other financial expenses …………………………………………" "	(27.3)	(18.9)
Financial expenses (net) " "	(74.7)	(83.0)

(1) Interest received on loans granted to the Sonepar entities until their effective date of disposal to Sonepar

(2) Fees and interests for respectively €18.3 and €10.0 million before tax (€18.6 million net of tax) incurred by Rexel for the acquisition of Hagemeyer and recharged to Sonepar according to the 23 October 2007 Agreement.

8. | INCOME TAX

Income tax expense for an intermediate period is calculated based on the expected year-end tax rate, i.e. by applying the average estimated tax rate for the year to the intermediate income before taxes.

The effective tax rate for the period ended 30 June 2009 is 32.0%, compared with 21.4% for the first half of 2008.

For the period ended 30 June 2008, the effective tax rate included the non-recurring effect of the non taxable gain related to the disposal to Sonepar of the Rexel business in Germany (as described in note 6.1) for €107.5 million.

9. | EARNINGS PER SHARE

Information on the earnings and number of ordinary and potential dilutive shares included in the calculation is presented below:

	For the period ended 30 June
	2009	2008
Net income attributed to ordinary shareholders (in millions of euros )	18.0	258.7
" Weighted average number of ordinary shares (in thousands )…………. "	258,972	255,547
" Basic earnings per share (in euros ) ………………………………….	0.07	1.01
Net income attributed to ordinary shareholders (in millions of euros ) "	18.0	258.7
" Average number of balanced shares in circulation (in thousands) ………	258,972	255,547
" Potential dilutive ordinary shares (in thousands )………………………. "	936	5,254
- out of which are share options (in thousands) ………………………"	127	1,021
- out of which are free shares (in thousands) …………………………(1)	809	4,233
" Weighted average number of ordinary shares used for the calculation of fully diluted earnings per share (in thousands ) ………. "	259,908	260,801
Fully diluted earnings per share (in euros ) ……………………………"	0.07	0.99

(1) The number of potential dilutive shares does not take into account the free shares whose allocation is subject to future performance

10. | SHARE-BASED PAYMENTS

On 11 May 2009, Rexel entered into free share plans for its top executives and key managers amounting to a total of 1,372,166 shares. According to local regulations, these employees and executives will either be eligible to receive Rexel shares two years after the granting date (12 May 2011), these being restricted during an additional two year period (12 May 2013), or four years after the granting date with no restrictions subsequently. The issuance of these free shares is subject to the service and performance conditions of the schemes.

Vesting conditions are presented in the following table:

Beneficiaries	Vesting conditions	Date of delivery	Maximum number of shares attributed on 11 May 2009
Members of Group Executive	Two year service condition from grant date and cumulative performance conditions based on: (i) 2009 adjusted EBITDA, (ii)	12 May 2011	107,934
Committee	2008/2010 adjusted EBITDA margin increase and (iii) 2009 ratio Net Debt to adjusted EBITDA	12 May 2013	218,884
40% of the shares vested based on a two year service condition from		12 May 2011	259,282
Other key managers	grant date and 60% based on additional performance conditions relative to: (i) 2009 adjusted EBITDA, (ii) 2008/2010 adjusted EBITDA margin increase and (iii) 2009 ratio Net Debt to adjusted EBITDA	12 May 2013	786,066
Total			1,372,166

The fair value of Rexel's shares granted to employees is estimated to €6.42 per share, based upon the stock price at grant date. The restrictions attached to the dividends until the delivery date of the shares to the beneficiaries have no impact on the fair value, as no dividends have been considered on this period.

For the period ended 30 June 2009, the expense related to free share schemes amounted to €0.4 million and is accounted for on the line "distribution and administrative expenses". For the same period of 2008, the net expense was nil.

For the period ended 30 June 2009, IFRS 2 expense relating to plans issued in 2007 concurrently with the IPO amounted to €2.3 million and is presented on the line "Other charges" (see note 6.2) in consideration of the non-recurring nature of the IPO. No tax effect has been recorded for this expense since these plans do not qualify for a tax deduction under French regulation.

11. | IMPAIRMENT OF GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill and intangible assets that have an indefinite useful life are subject to an impairment test, as soon as there is an indication that they may be impaired, and at least once a year. In the first half of 2009, due to the global economic and market downturn, Rexel has tested for impairment all its cash generating units. Recoverable amounts are determined using the value in use of the cash-generating units corresponding to the countries in which the Group operates.

Cash flow projections used to calculate the value in use of each cash-generating unit are based on the three year strategic plan approved by the Strategic Committee in July 2009 and extrapolated over a period of five years after taking into account a terminal value.

The discount rate applied was determined on the basis of the weighted average cost of capital after tax calculated for each country. The weighted average cost of capital reflects the time value of the money and the risk specific to the asset for which cash flow projections have not already been adjusted, considering the financial structure and conditions of an average market participant.

The following discount rates were used to assess the value in use:

	2009	2008
Europe	6.8% to 14.0%	7.2% to 12.2%
North America	6.9% to 7.0%	7.4% to 7.6%
Asia-Pacific	7.7% to 9.5%	8.4% to 10.2%
Other operating segments	7.6% to 9.1%	8.3% to 10.0%

A single perpetual growth rate of 2.0% was used to calculate the terminal value, without any change compared to 2008. This rate extrapolates the expected long term inflation on mature markets.

As a result of the test, an additional impairment loss of €12.6 million was recognised and allocated against the goodwill in Finland (€4.6 million) and in Slovakia (€8.0 million) due to the deterioration of market conditions in the first half of 2009.

The calculation of value in use of cash-generating units is sensitive to the discount rate and the perpetual growth rate to extrapolate cash flows beyond the horizon of projections. As at 30 June 2009, a 50 basis points increase in discount rates would have resulted in an €24 million increase in the impairment charge and a 50 basis points decrease in the perpetual growth rate translates in an increase of the impairment charge by €15 million.

12. | FINANCIAL LIABILITIES

This note provides information about financial liabilities at 30 June 2009. Financial liabilities include interestbearing loans, borrowings and accrued interest less transaction costs.

12.1 | Net financial debt

		At 30 June 2009		At 31 December 2008
(in millions of euros)	Current	Non current	Total	Current	Non current	Total
Senior credit facility …………………………………" "	164.3	2,150.6	2,314.9	178.2	2,225.9	2,404.1
Securitisation …………………………………………" "	-	1,013.7	1,013.7	-	1,255.0	1,255.0
Bank loans ……………………….…………………… " "	8.7	2.5	11.2	5.2	3.7	8.9
Bank overdrafts and other credit facilities (1) ……… " "	61.0	-	61.0	91.4	-	91.4
Finance lease obligations …………………………… " "	7.8	14.8	22.6	9.6	17.4	27.0
Less transaction costs ………………………………" "	(13.8)	(27.7)	(41.5)	-	(47.4)	(47.4)
" " Total financial debt and accrued interest……	228.0	3,153.9	3,381.9	284.4	3,454.6	3,739.0
Cash and cash equivalents…………………………" "			(674.0)			(807.0)
Net financial debt			2,707.9			2,932.0

'(1) Including accrued interest of €3.7 million at 30 June 2009 (€8.3 million at 31 December 2008)

12.1.1 Senior Credit Agreement

Credit Facility (Term Loan)	Commitment	Borrower	Balance due at 30 June 2009	Currency	Balance due at 30 June 2009
	(in millions of		(in millions of		(in millions of
	euros)		local currency)		euros)
		Rexel Distribution	1,000.0	SEK	92.5
		Rexel Distribution	180.0	CHF	117.9
Facility A	2,254.9	IESC	772.0	USD	546.2
		Rexel North America Inc	320.0	CAD	196.6
		Kelium and Rexel Distribution	1,301.7	EUR	1,301.7
Facility A'	60.0	Kelium	60.0	EUR	60.0
Facility B	585.0	Kelium and other obligors	-	EUR	-
TOTAL	2,899.9				2,314.9

At 30 June 2009, facilities under the Senior Credit Agreement are as follows:

Financial covenants

Under the terms of the Senior Credit Agreement, Rexel must, at 30 June 2009, maintain a Pro Forma Leverage Ratio of 4.75, corresponding to the Adjusted Consolidated Net Debt relative to the adjusted consolidated EBITDA, as defined in the consolidated financial statements for the year ended 31 December 2008 included in the Document de référence registered by the Autorité des Marchés Financiers on 20 April 2009 under number R.09-022.At 30 June 2009, this ratio stood at 4.13, thus satisfying the covenant.

Amendment to the 2008 Senior Credit Agreement

Further to the adoption of the terms and conditions of a draft amendment by the Management Board on 24 July 2009 and subject to the prior authorisation of the Supervisory Board, Rexel should enter into an amendment to the 2008 Senior Credit Agreement on 30 July 2009. Key terms and conditions of this amendment include, among others, modifications of the financial covenants (see note 17.1 for detailed disclosures). As part of the conditions precedent to this agreement, on 22 July 2009, Rexel paid off €150 million under Facilty A and repaid in full the Facility A' for €60 million.

12.1.2 Securitisation programmes

On 17 December 2008, Rexel launched a new securitization programme, including initially Hagemeyer's operations in the United Kingdom and Germany, as well as Rexel's subsidiary in Belgium. In the first quarter of 2009, the operations in Spain and in The Netherlands joined this programme. This programme, of a maximum amount of €600 million, has a five-year term.

Securitisation programmes features are summarised in the table below:

		(in millions of currency)			(in millions of euros)
Programme	Commitment Amount of receivables pledged on 30 June 2009		Amount drawn on 30 June 2009	Outstanding amount at 30 June at 31 2009 December 2008		Maturity date	On-going cost of funding
2005 - Europe and Australia	600.0 EUR	549.4 EUR	423.7 EUR	423.7	589.7	20/11/2012	BT & EUR/US Commercial Paper +0,48%
United-States	470.0 USD	443.4 USD	310.5 USD	219.7	326.7		11/03/2012 US Commercial Paper +0,33%
Canada (1)	175.0 CAD	193.8 CAD	135.4 CAD	83.2	73.8	13/12/2012	Canadian Commercial Paper +0,45%
2008 - Europe	600.0 EUR	296.1 EUR 119.2 GBP	201.5 EUR 72.9 GBP	287.1	264.8	17/12/2013	BT & Euro/US Commercial Paper +0,86%
TOTAL				1,013.7	1,255.0

(1) Commitment increased from CAD140 million in December 2008 to CAD175 million since March 2009.

Considering their characteristics, notably the fact that the Group retains a significant part of the late payment and credit risks, these receivables selling programmes cannot be qualified for derecognition under IAS 39 requirements. Assigned receivables therefore remain registered as assets on the Group's balance sheet whereas the amount due is considered as financial debt.

Securitisation programmes are subject to certain covenants concerning the quality of the receivables portfolio including dilution (ratio of credit notes to eligible receivables), delinquency, and default criteria (aging ratios measured respectively as overdue and doubtful receivables to eligible receivables).

At 30 June 2009, Rexel had satisfied all of these covenants.

12.2 | Repayment schedule

The contractual repayment schedule of financial debt is as follows:

(in millions of euros)	At 30 June	At 31 December
Due within	2009	2008
One year …………………………………………………" "	228.0	272.3
Two years……………………………………………………" "	474.5	328.9
Three years………………………………………….……… " "	771.0	264.5
Four years…………………………………………………. " "	1,896.5	2,598.0
Five years……………………………………………… " "	1.4	266.2
" " Thereafter…………………………………………………	10.5	9.1
Total financial debt………………………………………" "	3,381.9	3,739.0

12.3 | Change in net financial debt

At 30 June 2009 and 30 June 2008, change in net financial debt is as follows:

(in millions of euros)	2009	2008
,,,,, At 1 January ………………………………………………………………	2,932.0	1,606.6
,,,,, Reimbursement of Senior Credit Agreement 2007………………………	-	(930.0)
,,,,, Re-financing of Hagemeyer pre-acquisition debt…………………………	-	(260.0)
Subscription of Senior Credit Agreement 2008………………………… ,,,,,	-	4,308.6
(1) Reimbursement of 2008 Senior Credit Agreement………………………	(86.3)	(1,400.0)
,,,,, Transaction costs related to the 2008 Senior Credit Agreement………	(1.0)	(64.1)
,,,,, Repayment of the 1998 Indexed bond……………………………	-	(45.7)
Net change in other credit facilities and bank overdrafts………………,,,,,	(41.2)	12.7
,,,,, Net change in credit facilities………………………………………………	(128.5)	1,621.5
,,,,, Net change in securitisation………………………………………………	(279.8)	23.3
,,,,, Payment of finance lease liabilities………………………………………	(4.6)	(44.6)
Net change in financial liabilities…………………………………………,,,,,	(412.9)	1,600.2
,,,,, Change in cash and cash equivalents …………………………………	143.9	(313.5)
Foreign currency exchange discrepancies ………………………………,,,,,	33.0	(75.8)
,,,,, Change in consolidation scope……………………………………………	5.2	312.4
Amortisation of transaction costs……………………………………… ,,,,,	7.3	32.6
,,,,, Other changes………………………………………………………………	(0.6)	(15.5)
,,,,, At 30 June ……………………………………………………………………	2,707.9	3,147.0

(1) During the first quarter 2009, facility D was fully repaid for €86.3 million and then cancelled.

13. | MARKET RISKS AND FINANCIAL INSTRUMENTS

13.1 | Interest rate hedging

In order to hedge its exposure to floating rates, the Group has adopted an interest rate hedging strategy aimed at maintaining a hedging ratio (including fixed and capped interest rates) close to three-fourths of the net financial debt and the remaining at variable interest rates.

Every month the Group monitors the interest rate risk through a group treasury committee, which involves the top management. This process enables the Group to assess the efficiency of the hedges and to adapt them to the underlying indebtedness where necessary.

The breakdown of financial debt between fixed and variable rates, before and after hedging, is as follows:

(in millions of euros)	At 30 June	At 31 December
	2009	2008
Fixed rate finance leases and other fixed rate debt……… "	26.0	35.0
Fixed rate debt before hedging……………………………"	26.0	35.0
Variable to fixed rate swaps………………………………… "	1,041.3	1,183.0
Interest rate options - Caps and Collars……………………"	1,136.2	1,087.9
Sub total fixed or capped rate debt after hedging "	2,203.5	2,305.9
	" "
Variable rate debt before hedging……………………………"	3,355.7	3,704.0
Variable to fixed rate swaps………………………………… "	(1,041.3)	(1,183.0)
Active Interest rate options - Caps and Collars (1)…………"	(1,054.9)	(69.3)
Cash and cash equivalents.………………………………… "	(673.9)	(807.0)
Sub total current variable rate debt after hedging "	585.7	1,644.7
Inactive Interest rate options - Caps and Collars……………"	" " (81.4)	(1,018.6)
Sub total fully floating rate debt	" 504.3	626.1
	" "
Total financial debt and accrued interests	" 2,707.9	2,932.0

(1) Interest options for which one of the strikes (for Cap or Floor) is in the money

In accordance with the policy laid down above, the Group has entered into euro-, US dollar-, Canadian dollar-, Australian dollar- and Swedish Krona- denominated interest–rate swap contracts, exchanging floating rates for fixed rates. It has also entered into US dollar, Euros, Pound Sterling, and Canadian dollardenominated caps and collars contracts.

These derivatives mature between September 2009 and September 2012. It is the Group's intention to renew any of these swaps in order to hedge the variability of future interest expense related to its floating interest debt according to its policy. The allocation of hedging instruments among currencies hinges upon the Group's expectations concerning the evolution of the interest rates linked to those currencies. Those instruments are classified as cash flow hedges and are measured at fair value.

Cash flow hedge derivatives

At 30 June 2009, derivative instruments classified as cash flow hedges are as follows:

	Total notional amount currency (in millions of currency)	Maturity	Floating rate received	Weighted average fixed rate paid	Fair value (in millions of euros)
Swaps paying fixed rate
Euro	303.0	March 2010	1M Euribor	3.15%	(4.9)
Canadian \$	80.0	March 2010	3M Libor	4.02%	(1.2)
Swedish Krona	430.0	March 2010	3M Stibor	3.36%	(0.7)
Australian \$	41.5	March 2010	3M Libor	6.10%	(0.5)
US \$	185.0	September 2009	3M Libor	5.25%	(1.3)
	269.0	March 2010	3M Libor	4.64%	(5.3)
	200.0	September 2011	3M Libor	3.35%	(5.3)
	230.0	December 2011	3M Libor	3.77%	(6.8)
	200.0	September 2012 (1)	3M Libor	3.18%	(3.5)
Total					(29.5)

(1) : beginning on 16 September 2009

	Total notional amount currency (in millions of currency)	Maturity	Premium paid (in millions of euros)	Floating rate received	Weighted average fixed rate paid	Fair value (in millions of euros)
Caps Dollar US………………	115.0	September 2009	0.5	3M Libor	5.50%	-
Collars Euro…………………… Pound Sterling…………	900.0 66.0	March 2011 March 2011	0.8 0.2	3M Euribor 3M Libor	2,65%-4,50% 3,75%-5,75%	(18. 4) (2. 6)
Canadian \$ . Total	126.0	March 2011	0.1 1.6	3M C-Dor	2,75%-5,00%	(2.4) (23.4)

On 30 June 2009, the total notional amount of cash flow hedge swaps and cash flow hedge options were €1,182.8 million and €1,136.2 million, respectively.

The change in fair value of the cash flow hedge instruments for the period ended 30 June 2009 was recognised as a reduction in shareholders' equity for an amount of €9.0 million (before tax).

Sensitivity to interest rate variation

At 30 June 2009 an instantaneous rise of 1% in short-term interest rates on variable debt excluding inactive interest rate options after the 1% rise, would lead to an increase in interest expense estimated to €6.3 million on a yearly basis.

13.2 | Hedging of fluctuations in foreign currency

Exchange exposure arises principally from external financing in currency other than the euro and in financing of/by Group entities of/by the Parent company in their local currency. In order to neutralise the exposure to the exchange rate risk, the positions denominated in currencies other than the euro are systematically hedged with term contracts with duration generally between one and three months. The hedge contracts are renewed as necessary while exposure remains.

Fair value

The notional amount and the fair value of financial instruments hedging foreign exchange risk at 30 June 2009 were respectively €275.1 million (€607.2 million forward sales and €332.1 million forward purchases) and €0.7 million. Change in fair value of foreign exchange rate derivatives amounted to €7.9 million in the first half 2009 and is accounted for in net financial expenses for €4.6 million (see note 7) and through equity in the cash flow hedge reserve for €3.3 million before tax.

Financial debt per currency of repayment

The amount of the financial debt per currency of repayment is analysed as follows:

(in millions of euros)	Euro	US dollar	Canadian dollar	Australian dollar	Norvegian crown	Swedish kronor	Pound sterling	Other currency	Total
Financial liabilities ………" "	1,863.4	760.5	277.8	67.7	0.7	94.5	181.7	135.6	3,381.9
Cash and cash equivalents………… " "	(504.0)	(72.8)	(5.5)	(25.0)	(16.5)	(8.4)	(15.2)	(26.6)	(674.0)
Net financial position before hedging " "	1,359.4	687.7	272.3	42.7	(15.8)	86.1	166.5	108.9	2,707.9
Impact of hedge…………" "	(332.3)	10.8	(33.2)	52.1	219.2	67.8	(57.3)	72.8	-
Net financial position after hedging " "	1,027.1	698.5	239.1	94.7	203.4	153.9	109.3	181.7	2,707.9
Impact of a 5% increase in exchange rates………………….		34.9	12.0	4.7	10.2	7.7	5.5	9.1	84.0

14. | SEASONALITY

Notwithstanding the relatively low degree of seasonality within the Group's sales, there is seasonality in cash flows due to variations in working capital requirements, with, generally, about half of annual free cash flow generated in the first half of the year, a low third quarter due to an increase in working capital requirements as a result of higher sales in September, and a strong fourth quarter.

15. | LITIGATION

For the period ended 30 June 2009, there was no significant evolution relating to litigation disclosed in the consolidated financial statements at 31 December 2008.

16. | RELATED PARTY TRANSACTIONS

On 11 May 2009, Rexel entered into free share plans for its top executives and key managers, including the members of the Group Executive Committee (see note 10).

There was no material change in the arrangements such as disclosed note 23 in the consolidated financial statements at 31 December 2008.

17. | EVENTS AFTER THE REPORTING PERIOD

17.1 | Amendment to the 2008 Senior Credit Agreement

Further to the adoption of the terms and conditions of a draft amendment by the Management Board on 24 July 2009 and subject to the prior authorisation of the Supervisory Board, Rexel should enter on 30 July 2009 into an amendment to the 2008 Senior Credit Agreement initially executed on 19 December 2007 with Calyon, Crédit Industriel et Commercial, HSBC France, ING Bank N.V., Natixis, The Royal Bank of Scotland plc as mandated lead arrangers and Calyon as Facility Agent and Security Agent.

The key terms and conditions of the Senior Credit Agreement would be then amended as follows:

Financial covenants

Under the terms of the amendment to the Senior Credit Agreement, Rexel must, at each of the dates indicated below, maintain, at the end of each period indicated here-after, a Pro Forma Leverage Ratio, corresponding to the Adjusted Consolidated Net Debt relative to the adjusted consolidated EBITDA, as defined in the consolidated financial statements for the year ended 31 December 2008 included in the Document de reference registered by the Autorité des Marchés Financiers on 20 April 2009 under number R.09-022, below the following revised levels:

Date	Amended	Previous
31 December 2009	5.15:1	4.50:1
30 June 2010	5.15:1	4.25:1
31 December 2010	4.90:1	3.90:1
30 June 2011	4.50:1	3.50:1
31 December 2011	4.00:1	3.50:1
30 June 2012	3.75:1	3.50:1
31 December 2012	3.50:1	3.50:1

General undertakings

The amendment to the Senior Credit Agreement introduces certain undertakings including limitations of the level of capital expenditures and restrictions of the payment of dividends. So long as the ratio Adjusted Consolidated Net Debt relative to adjusted consolidated EBITDA is above 4.00:1, the aggregate capital expenditure (other than Capital Expenditure paid for from shareholders new equity injections proceeds) shall not exceed 0.75% of the sales of the Group.

Rexel shall not declare, make or pay any dividend during the fiscal years ended 31 December 2009 and 31 December 2010. Thereafter, so long as the ratio Adjusted Total Debt to Adjusted Ebitda exceeds 4.00:1, this undertaking shall remain applicable.

Interests and margin

Amounts drawn under the facilities bear interest at a rate determined in reference to (i) the LIBOR/STIBOR rate when funds are made available in currencies other than the euro, or the EURIBOR rate when funds are made available in euro, plus (ii) the cost relating to lending banks' reserve requirements and fee payments and (iii) the applicable margin.

The amended applicable margin in relation to the facilities shall be 4.00% as from the amendment signing date until 31 December 2009 and thereafter will vary in accordance with the ranges in which the Pro Forma Leverage Ratio falls at the end of each semester as set out below:

Pro Forma Leverage Ratio	Amended	Previous
Greater than or equal to 5,00:1	4.75%	n/a
Greater than or equal to 4,50:1	4.00%	2.00%
Greater than or equal to 4,00:1	3.50%	1.75%
Greater than or equal to 3,50:1	3.00%	1.40%
Greater than or equal to 3,00:1	2.50%	1.10%
Greater than or equal to 2,50:1	2.25%	0.90%
Less than 2,50:1	2.00%	0.75%

In addition, the margin applicable to the Facility B, the multi-currency revolving credit facility, shall be increased by an utilisation fee equal to (i) 0.25% if the Facility B is drawn down for an amount less than or equal to 33% of the Facility B commitment, (ii) 0.375% if the Facility B is drawn down for an amount less than or equal to 66% and greater than 33% of the Facility B commitment and (iii) 0.50% if the Facility B is drawn down for an amount greater than 66% of the Facility B commitment.

Prepayment

As part of the conditions precedent to the execution of the amendment, on 22 July 2009, Rexel paid off by anticipation €150.0 million under Facility A and €60.0 million under Facility A', the latter being cancelled after repayment. The early repayment with respect to Facility A shall be applied up to 25% on the instalment due on 21 December 2009 which shall be reduced from €160.0 million to €122.5 million and up to 75% on the last instalment falling on 21 December 2012 which shall be reduced by €112.5 million.

The revised amortisation schedule of Facility A is as follows:

(in millions of euros)
Date	Repayment
December 2009	122.5
December 2010	262.9
December 2011	262.9
December 2012	1456.6
Total	2104.9

Amendment fee

An amendment fee of €20 million would be due to the lenders at the signing date on 30 July 2009.

17.2 | Other

Pursuant to the share purchase agreement entered into on 2 March 2007 with Huazang Overseas Holding Inc. as seller, Rexel exercised its call option and increased from 51% to 70% its shareholding interest in Huazang Electrical Automation Co.Ltd, a Hong Kong based company that distributes automatisms and industrial equipment controls in Hong Kong and Western China. The transaction was executed on 10 July 2009 for a consideration of RMB 34.6 million which was settled for USD 5.1 million (€3.6 million).

18. | QUARTERLY INFORMATION

Consolidated income statement

	For the quarter ended 30 June
(in millions of euros)	2009	2008 (1)
Sales	2,799.1	3,475.7
Cost of goods sold	(2,113.9)	(2,635.6)
Gross profit	685.2	840.1
Distribution and administrative expenses	(583.7)	(647.6)
Operating income before other income and expenses	101.5	192.5
Other income	0.6	111.2
Other expenses	(39.8)	(21.5)
Operating income	62.3	282.2
Financial income	12.3	28.2
Interest expense on borrowings	(35.5)	(58.2)
Refinancing related expenses	-	-
Other financial expenses	(13.8)	(13.0)
Financial expenses (net)	(37.0)	(43.0)
Net Income before income tax	25.3	239.2
Income tax	(8.1)	(42.3)
Net income	17.2	196.9
Attributable to: Equity holders of the parent	17.0	196.2
Minority interests	0.2	0.7
Average number of ordinary shares in circulation (in thousands )	259,550	255,548
Average number of shares used for the diluted earnings per
share calculation (in thousands )	260,290	260,802
Earnings per share:
Basic earnings per share (in euros )	0.07	0.77
Fully diluted earnings per share (in euros )	0.07	0.75

(1) Reported income statement for the quarter ended 30 June 2008 was restated retrospectively to reflect changes according to IFRIC 13 (see note 2.2.1)

Consolidated statement of cash flows

	For the quarter ended 30 June
(in millions of euros)	2009	2008
Cash flows from operating activities
Operating income	62.3	282.2
Depreciation, amortisation and impairment of assets	39.8	28.0
Employee benefits	(5.1)	(2.6)
Change in other provisions	(3.2)	7.9
Other non-cash operating items	5.5	(106.0)
Interest paid	(24.5)	(51.8)
Income tax paid	(28.3)	(33.2)
Operating cash flows before change in working capital
requirements	46.5	124.5
Change in inventories	88.4	36.8
Change in trade receivables	111.0	(131.7)
Change in trade payables	(56.9)	141.4
Changes in other working capital items	(3.4)	(20.0)
Change in working capital	139.1	26.5
Net cash from operating activities	185.6	151.0
Cash flows from investing activities
Acquisition of property, plant and equipment	(10.4)	(26.1)
Proceeds from disposal of property, plant and equipment	0.6	26.4
Acquisition of subsidiaries, net of cash acquired	(27.7)	(224.7)
Proceeds from disposal of subsidiaries, net of cash disposed	-	909.3
Change in long-term investments	0.2	853.6
Net cash from investing activities	(37.3)	1,538.5
Cash flows from financing activities
Contribution received from minority shareholders	-	-
Disposal / (Repurchase) of treasury shares	9.2	(4.0)
Net change in credit facilities and other financial borrowings	(13.1)	(1,371.6)
Net change in securitisation	(162.1)	36.2
Payment of finance lease liabilities	(1.8)	(20.7)
Dividends paid	-	(94.4)
Net cash from financing activities	(167.8)	(1,454.5)
Net (decrease) / increase in cash and cash equivalents	(19.5)	235.0
Cash and cash equivalents at the beginning of the period	692.1	595.7
Effect of exchange rate changes on cash and cash equivalents	1.4	(6.8)
Cash and cash equivalents at the end of the period	674.0	823.9

Segment information for the quarter ended 30 June 2009 and 30 June 2008

2009
(in millions of euros)	Europe	North America	Asia Pacific	Other segments	Total Operating Segments	Corporate Holdings	Total Group
For the quarter ended 30 June ""
Sales to external customers…………""	1,626.5	844.3	219.3	109.0	2,799.1	-	2,799.1
EBITA (1)………………………………""	70.2	23.8	12.1	3.5	109.6	(3.3)	106.3
"" 2008
(in millions of euros)	Europe	North America	Asia Pacific	Other segments	Total Operating Segments	Corporate Holdings	Total Group
For the quarter ended 30 June ""
Sales to external customers…………""	2,006.0	1,087.5	246.4	135.8	3,475.7	-	3,475.7
EBITA (1)………………………………""	113.0	63.3	19.8	5.7	201.8	(4.2)	197.6

(1) EBITA is defined as operating income before other income, other expenses and amortisation of intangible assets recognised upon allocation of the acquisition price of acquired entities.

III. Statutory auditors' report

This is a free translation into English of the statutory auditors' review report issued in French and is provided solely for the convenience of English-speaking readers. This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable in France.

KPMG Audit

1, cours Valmy 92923 Paris-La Défense Cedex

Commissaire aux Comptes Membre de la compagnie régionale de Versailles

ERNST & YOUNG Audit

Faubourg de l'Arche 11, allée de l'Arche 92037 Paris-La Défense Cedex

Commissaire aux Comptes Membre de la compagnie régionale de Versailles

For the six-month period ended June 30, 2009

Statutory Auditors' Review Report on the half-yearly consolidated financial statements

To the Shareholders,

Following our appointment as statutory auditors by your annual general meeting and articles of association and in accordance with article L.451-1-2 III of the French Monetary and Financial Law ("Code monétaire et financier"), we hereby report to you on:

• x our review of the accompanying condensed half-yearly consolidated financial statements of Rexel for the sixmonth period ended 30 June 2009,
• x the verification of information contained in the interim management report.

These condensed half-yearly consolidated financial statements are the responsibility of your executive board and have been prepared in a context, as disclosed in note 11, of economic and financial crisis with a lack of visibility concerning economic prospects already valid as at December 31, 2008. Our role is to express a conclusion on these financial statements based on our review.

1. Conclusion on the financial statements

We conducted our review in accordance with the professional standards applicable in France. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the professional standards applicable in France and consequently does not enable us to obtain assurance that the financial statements, taken as a whole, are free from material misstatements, as we would not become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed half-yearly consolidated financial statements are not prepared in all material respects in accordance with IAS 34 the standard of the IFRS as adopted by the European Union applicable to interim financial information.

Without qualifying the conclusion expressed above, we draw attention to note 2.2.1 which sets out the changes in accounting policy relating to the first application of IFRS 8 "Operating segments" and IFRIC 13 interpretation "Customer loyalty programmes" applied retrospectively in the period presented, and to note 11 which discloses the main assumptions retained to perform the impairment test of goodwill and other intangible assets with an indefinite useful life.

2. Specific verification

We have also verified the information provided in the interim management report in respect of the half-yearly consolidated financial statements that were subject to our review.

We have no matters to report on the fairness and consistency of this information with the condensed half-yearly consolidated financial statements.

Paris La Défense, on the 30 July 2009

The Statutory Auditors

KPMG Audit Hervé Chopin ERNST & YOUNG Audit Pierre Bourgeois

IV. Responsibility for the half-year financial report

RESPONSIBILITY STATEMENT

I hereby certify that, to my knowledge, the half-year financial statements have been prepared in accordance with applicable accounting standards and give a true view of the assets, financial condition and results of operations of the company and of all of the companies included in the scope of consolidation and that the half-year report on business operations provides an accurate description of the important events which have occurred in the first six months of the financial year, the impact of these events on the financial statements, the major transactions between related parties as well as the main risks and uncertainties for the six months remaining in the financial year.

Paris, on the 30 July 2009

Jean-Charles Pauze Chairman of Management Board of Rexel