Rexel's Data Center Inflection: From Electrical Distributor to AI Era Supplier

Guidance raised as data center activity accelerates and electrification trends compound, marking a strategic pivot.

RXL.PA · Earnings Call · 2026-07-27

Data Centers: From Sideshow to Center Stage

Rexel's second quarter marked a clear inflection point. Group sales reached nearly EUR 10 billion in H1, with same-day sales growth accelerating to +6.7% in Q2, above the high end of guidance. But the standout was the data center vertical. As CEO Guillaume Jean Texier noted: “In the U.S., our data center activity grew more than 80% in the first half” — Guillaume Jean Texier, Group CEO · 2026-07-27, and the company now anticipates that “this segment, which accounts today for 9% of our U.S. sales will grow above 50% in 2026 versus our initial objective of above 20%.” — Guillaume Jean Texier, Group CEO · 2026-07-27 This is a dramatic step up from prior expectations. just a year ago, in the February 2026 call, the company had guided to “data center growth next year is going to be at least north of 20%” — Guillaume Jean Texier, CEO · 2026-02-11. The acceleration is visible across the backlog: U.S. backlog crossed USD 2 billion and data centers now represent about 25% of it, with a 25% sequential jump in Q2. The data center activity is increasingly the core driver of the group's North American platform, which became the largest region in the quarter. This is not just a cyclical blip; it reflects the structural wave of AI and cloud infrastructure that is sweeping across the electrical distribution industry. The company's positioning is moving up the value chain, from cable to switchgear, and expanding into adjacent areas like white rooms and fiber optics.

Electrification: Europe's Quiet Boom

While data centers dominated the narrative, Europe delivered the other half of the growth story. The electrification in Europe segment, comprising HVAC, solar, and EV charging, grew by 15% in Q2, representing 22% of European sales. This was driven by energy price volatility, security concerns, and a series of heatwaves that boosted air conditioning demand. As CFO Laurent Delabarre explained: “We moved from plus 3.4% in Q1 '26 to plus 6.7% in Q2 '26 with a good balance between volume and price contribution.” — Laurent Delabarre, CFO · 2026-07-27 The Energy Transition trend is not just a tailwind; it is a strategic pillar, as CEO Guillaume Texier highlighted:

Today, roughly 2/3 of our sales are exposed to the traditional construction and economic cycles... The remaining 1/3 of our sales is exposed to structural megatrends such as AI and data infrastructure, the energy transition and industrial modernization.
Guillaume Jean Texier, Group CEO · 2026-07-27

Interestingly, management was quick to downplay the heatwave effect—it contributed less than 0.5% to European growth—suggesting the underlying demand for cooling and energy independence is more durable. The company is also expanding its HVAC footprint selectively, as Guillaume responded to a question on international expansion: “We will continue to be selective.” — Guillaume Jean Texier, Group CEO · 2026-07-27

The Guidance Reset

The improved visibility led to a guidance upgrade: same-day sales growth is now expected at around 5% (up from 3-5%), adjusted EBITDA margin at least 6.2%, and free cash flow conversion above 65%. The margin improvement of 40bps to 6.2% was driven by volume growth, positive pricing, and record productivity of 4% from the Axelerate 28 optimization program. The CEO was candid about the bridge: “We feel very comfortable with what we are going to deliver between now and the end of the year.” — Guillaume Jean Texier, Group CEO · 2026-07-27 The confidence stems from the record backlog, but also from the completion of three acquisitions (Revere Electrical Supply, Techno-Contact 360, and Dee Electronics) that add EUR 400 million in sales, particularly in data center and industrial automation capabilities. This strategic shift is being validated by the market: the global tape is already voting on data center infrastructure, with names like APLD and Ampex reporting similar tailwinds. Rexel's move is a company-unique avatar of that broader theme, as it transitions from a cyclical distributor to a growth-exposed partner in the AI buildout.

Conclusion

Rexel's quarter is a textbook example of a company recasting itself. The data center vertical has gone from a niche to a cornerstone, electrification in Europe is compounding, and the guidance raise is a direct consequence. While macro risks remain—especially in the U.S. ex-data center and European residential construction—the company's pivot toward secular growth markets is unmistakable. The keywords that dominated this call—air conditioning, electrification trend, and Axelerate 28—signal a company that is no longer just managing a cycle but positioning for a structural one. The transformation is not just incremental; it's a re-rating of what Rexel is.