Legrand recorded a quarterly sales
increase of +2.4% (excluding exchange rates and Russia)
driven by acquisitions and datacenters
Performance at end of September 9M sales
trends: +0.3% excluding exchange rates and Russia Adjusted
operating margin: 20.5% Net profit attributable to the Group: 13.4%
of sales
7 acquisitions announced since the beginning
of the year, including 4 in datacenters Around €350
million additional revenue on an annual basis
2024 full-year targets specified
2030 ambitions: 2030 sales of between €12bn
and €15bn, buoyed by offers linked to the energy and digital
transition
Regulatory News:
Legrand (Paris:LR):
Benoît Coquart, Legrand’s Chief Executive Officer,
commented:
“For the first nine months of the year, sales (excluding
currency effects and our exit from Russia) were stable, in a
building market that remains in decline in most of our geographies.
In the third quarter alone, sales growth (+2.4% excluding currency
effects and Russia) was driven in particular by sustained growth in
datacenters in the United States.
Our financial indicators remain solid, in terms of both margins
and free cash flow.
Our external growth has been very dynamic this year, with 7
acquisitions announced, including 4 in the buoyant datacenter
sector, demonstrating Legrand's ongoing ability to strengthen its
leadership positions through value-creating operations.
Fully confident in our strategy, we are specifying our annual
targets as communicated at the beginning of February, and are
resolutely pursuing the implementation of our 2030 roadmap, as
presented at our Capital Markets Day on September 24. This roadmap
is supported in particular by the buoyant field of energy and
digital transition, which already represented 46% of sales in
2023.”
2024 full-year targets specified1
In 2024, the Group is pursuing the profitable and responsible
development laid out in its strategic roadmap.
Taking into account the achievements on the first nine months of
the year as well as the world’s current macroeconomic outlook, and
with confidence in its model for creating integrated value, Legrand
has specified its full-year targets for 2024:
- low single-digit sales growth (organic and through
acquisitions2 - unchanged);
- an adjusted operating margin after acquisitions of between
20.0% and 20.4% (vs. between 20.0% and 20.8% before acquisitions
previously);
- at least 100% CSR achievement rate for the third year of the
2022-2024 roadmap (unchanged).
_________________________ 1 For more information, see Legrand
press releases dated February 15, May 3, and July 31, 2024 2
Excluding exchange-rate effect and impacts linked to the Group’s
disengagement from Russia
Financial performance at September 30,
2024
Key figures
Consolidated data
(€ millions)(1)
9 months 2023
9 months 2024
Change
Sales
6,307.3
6,229.0
-1.2%
Adjusted operating profit
1,363.5
1,276.1
-6.4%
As % of sales
21.6%
20.5%
20.6% before acquisitions (2)
Operating profit
1,273.8
1,189.7
-6.6%
As % of sales
20.2%
19.1%
Net profit attributable to the Group
937.2
833.7
-11.0%
As % of sales
14.9%
13.4%
Normalized free cash flow
1,112.9
1,046.5
-6.0%
As % of sales
17.6%
16.8%
Free cash flow
1,214.1
749.2
-38.3 %
As % of sales
19.2%
12.0%
Net financial debt at September 30
2,153.7
3,204.8
+48.8%
(1) See appendices to this press
release for definitions and indicator reconciliation tables
(2) At 2023 scope of
consolidation
Consolidated sales
In the first nine months of 2024, sales were down a total of
-1.2% from the same period of 2023, at €6,229.0 million.
In a building market which remains depressed in many
geographies, the organic decline in sales was -0.8% over the
period, including -0.1% in mature countries and -2.8% in new
economies.
The impact of a broader scope of consolidation was +0.3%,
including +1.1% linked to acquisitions and ‑0.8% due to the impact
of the Group’s disengagement from Russia. Based on acquisitions
made and their likely dates of consolidation, their overall impact
should be close to +2% full year, of which nearly +2.5% linked to
acquisitions and -0.6% to the impact of disengagement from Russia
as of October 4, 2023.
The exchange-rate effect on sales in the first nine months of
2024 was -0.7%. Based on average exchange rates in October 2024
alone, the full-year effect should be around -1% in 2024.
Changes in sales by destination at constant scope of
consolidation and exchange rates broke down as follows by
region:
9 months 2024 / 9 months
2023
3rd quarter 2024 / 3rd quarter
2023
Europe
-3.4%
-4.1%
North and Central America
+2.0%
+6.0%
Rest of the world
-0.9%
+3.9%
Total
-0.8%
+1.7%
These changes are analyzed below by geographical region:
- Europe (40.1% of Group revenue): in a building market
that remains difficult in most countries, sales at constant scope
of consolidation and exchange rates fell by -3.4% over the first
nine months of 2024, and by -4.1% over the third quarter alone.
These trends reflect a particularly deteriorated context in mature
countries during the quarter, and do not point to a recovery in the
construction market in the very short term.
Sales in Europe's mature economies (35.0% of Group sales) fell
organically by -3.7% over the first nine months of 2024, of which
-5.3% in the third quarter alone. Italy and the UK held up well
over the first nine months, but failed to offset a decline in sales
in France, Spain, Germany and the Netherlands in particular.
Sales in Europe’s new economies were down -1.3% over the first
nine months of the year. In the third quarter alone, sales rose by
a healthy +4.7%, with a growth in Eastern European sales.
- North and Central America (40.1% of Group revenue):
sales were up +2.0% from the first nine months of 2023 at constant
scope of consolidation and exchange rates.
In the United States alone (36.8% of Group revenue), sales rose
+3.1% in the first nine months of the year, including a steep +7.2%
rise in the third quarter alone. The 9-month performance was mostly
driven by offers dedicated to the datacenter segment.
Over the first nine months, sales declined in Canada and
Mexico.
- Rest of the world (19.8% of Group revenue): sales
marked an organic decline of -0.9% in the first nine months of
2024.
In Asia-Pacific (12.2% of Group revenue), sales declined by
-3.8% over the 9-month period and by -3.2% in the third quarter
alone. Over the first nine months, growth in India was unable to
offset the sharp fall in China, where the construction market
continues experiencing a marked decrease.
In Africa and the Middle East (3.6% of Group revenue), sales
were up +4.4% in the first nine months of the year and +25.7% in
the third quarter alone. Over nine months, sales trends were
sustained in the Middle East and showed a slight decline in Africa,
which saw a strong recovery in the third quarter alone.
In South America (4.0% of Group revenue), sales were up +3.8 %
in the nine first months, with marked growth in Brazil, and
advanced a strong +7.6% in the third quarter alone.
Adjusted operating profit and margin
Adjusted operating profit for the first nine months of 2024
stood at €1,276.1 million, down -6.4% from the first nine months of
2023. This corresponds to an adjusted operating margin equal to
20.5% of sales for the period.
Before acquisitions, adjusted operating margin for the first
nine months of 2024 stood at 20.6% of sales, down -1.0 point from
the first nine months of 2023.
Over this period, Group profitability confirmed Legrand’s
ability to maintain high margins despite a decrease in sales.
Value creation and solid balance sheet
Net profit attributable to the Group came to €833.7 million,
down -11.0% from the first nine months of 2023 and equal to 13.4%
of sales. This trend was due primarily to a decline in operating
profit, the negative impact of financial results and exchange-rate
effects, and a corporate income tax rate of 27.0% for the first
nine months of 2024.
Free cash flow came to 12.0% of sales over the period, to total
€749.2 million.
The ratio of net debt to EBITDA1 stood at 1.7 on September 30,
2024, a level that reflects the pace of acquisitions since the
beginning of the year as well as a solid free cash flow
generation.
In addition, as previously announced2, Legrand will have to pay
an amount of €43 million following the decision by the French
Competition Authority regarding the application of derogated prices
on the French market between 2012 and 2015. Legrand categorically
rejects the allegation made against it and reserves the right to
appeal this decision.
Strong acquisition
momentum
This year, Legrand pursued external acquisitions at a robust
pace. The 7 operations announced in 2024 represent acquired annual
sales of almost €350 million and include:
- in the buoyant datacenters segment, the acquisition of
Netrack (Indian specialist in racks), Davenham (Irish
specialist in low-voltage power distribution systems), Vass
(Australian leader in busbars) and UPSistemas (Colombian
specialist in the integration, commissioning, maintenance and
monitoring of technical infrastructures);
- in the assisted living and connected health segment:
Enovation, the Dutch leader in connected health
software;
- lastly, in the essential infrastructures segment: MSS in
New Zealand and APP in Australia.
Legrand intends to continue strengthening its leadership
positions with value-creating acquisitions.
2030 ambitions and growth
pillars
Legrand hosted a Capital Markets Day in London on September 24,
2024.
This event was an opportunity for the Group to present its
strategy both for essential infrastructures products (54% of its
2023 revenue) and for solutions that support the energy and digital
transition (46% of its 2023 revenue, including products for
datacenters, energy transition, and digital lifestyles).
Legrand detailed its 2030 ambitions, with:
- Sales in 2030 in a range of €12 to 15 billion, including sales
growth excluding the impact of exchange rates of between +6% to
+10% in CAGR. This includes +3% to +5% organic CAGR and +3% to +5%
CAGR related to acquisitions,
- Average adjusted operating margin of around 20% of revenue,
including +30 to +50 basis points of annual organic improvement and
-30 to -50 basis points of annual dilution from acquisitions,
- Free cash flow generation of nearly €10 billion from 2025 to
2030, with average free cash flow ranging between 13% and 15% of
sales, an average Capex to sales ratio of 3% to 3.5%, and an
average working capital requirement ratio of 10% of sales or
less,
- A capital allocation policy prioritizing acquisitions (at least
50% of average free cash flow) and an attractive dividend payment
(with a distribution ratio of around 50%). Over the period, a total
of around €5 billion will thus be dedicated to acquiring companies
to round out the Group's products and geographical range,
- 80% of total sales qualifying as eco-responsible sales, and
reducing Scope 1, 2 and 3 emissions in line with Legrand’s Net Zero
2050 commitment.
The presentation and webcast can be found on Legrand’s website
at www.legrandgroup.com through the following link: Capital Markets
Day 2024 - Legrand (legrandgroup.com)
----------------
_________________________ 1 Based on EBITDA for the past 12
months 2 For more information, see Legrand’s press release dated
October 30, 2024
Consolidated financial statements for the first nine months of
2024, a presentation, and the related teleconference (live and
replay) are available at www.legrandgroup.com.
Key financial dates
- 2024 annual results : February 13, 2025 “Quiet period1” starts
: January 14, 2025
- 2025 first-quarter results : May 7, 2025 “Quiet period1” starts
: April 7, 2025
- General Meeting of Shareholders : May 27, 2025
About Legrand
Legrand is the global specialist in electrical and digital
building infrastructures. Its comprehensive offering of solutions
for residential, commercial, and datacenter markets makes it a
benchmark for customers worldwide.
The Group harnesses technological and societal trends with
lasting impacts on buildings with the purpose of improving life by
transforming the spaces where people live, work and meet with
electrical, digital infrastructures and connected solutions that
are simple, innovative and sustainable.
Drawing on an approach that involves all teams and stakeholders,
Legrand is pursuing a strategy of profitable and responsible growth
driven by acquisitions and innovation, with a steady flow of new
offerings that include products with enhanced value in use (energy
and digital transition solutions: datacenters, digital lifestyles
and energy transition offerings).
Legrand reported sales of €8.4 billion in 2023. The company is
listed on Euronext Paris and is a component stock of the CAC 40,
CAC 40 ESG and CAC SBT 1.5 indexes. (code ISIN FR0010307819).
https://www.legrandgroup.com
_________________________ 1 Period of time when all
communication is suspended in the run-up to publication of
results
Appendices
Glossary
Adjusted operating profit: Adjusted operating profit is
defined as operating profit adjusted for: i/ amortization and
depreciation of revaluation of assets at the time of acquisitions
and for other P&L impacts relating to acquisitions, ii/ impacts
related to disengagement from Russia (impairment of assets and
effective disposal) and, iii/ where applicable, impairment of
goodwill.
Busways: electric power distribution systems based on
metal busbars.
Cash flow from operations: Cash flow from operations is
defined as net cash from operating activities excluding changes in
working capital requirement.
CSR: Corporate Social Responsibility.
EBITDA: EBITDA is defined as operating profit plus
depreciation and impairment of tangible and right of use assets,
amortization and impairment of intangible assets (including
capitalized development costs), reversal of inventory step-up and
impairment of goodwill.
ESG: Environmental, Societal and Governance.
Free cash flow: Free cash flow is defined as the sum of
net cash from operating activities and net proceeds from sales of
fixed and financial assets, less capital expenditure and
capitalized development costs.
KVM: Keyboard, Video and Mouse.
Net financial debt: Net financial debt is defined as the
sum of short-term borrowings and long-term borrowings, less cash
and cash equivalents and marketable securities.
Normalized free cash flow: Normalized free cash flow is
defined as the sum of net cash from operating activities—based on a
normalized working capital requirement representing 10% of the last
12 months’ sales and whose change at constant scope of
consolidation and exchange rates is adjusted for the period
considered—and net proceeds of sales from fixed and financial
assets, less capital expenditure and capitalized development
costs.
Organic growth: Organic growth is defined as the change
in sales at constant structure (scope of consolidation) and
exchange rates.
Payout: Payout is defined as the ratio between the
proposed dividend per share for a given year, divided by the net
profit attributable to the Group per share of the same year,
calculated on the basis of the average number of ordinary shares at
December 31 of that year, excluding shares held in treasury.
PDU: Power Distribution Units.
UPS: Uninterruptible Power Supply.
Working capital requirement: Working capital requirement
is defined as the sum of trade receivables, inventories, other
current assets, income tax receivables and short-term deferred tax
assets, less the sum of trade payables, other current liabilities,
income tax payables, short-term provisions and short-term deferred
tax liabilities.
Calculation of working capital requirement
In € millions
9M 2023
9M 2024
Trade receivables
1,015.2
1,059.9
Inventories
1,305.1
1,360.8
Other current assets
291.1
274.0
Income tax receivables
152.7
223.2
Short-term deferred taxes
assets/(liabilities)
109.1
104.2
Trade payables
(885.2)
(923.7)
Other current liabilities
(846.0)
(873.7)
Income tax payables
(79.1)
(70.1)
Short-term provisions
(147.0)
(160.7)
Working capital
required
915.9
993.9
Calculation of net financial debt
In € millions
9M 2023
9M 2024
Short-term borrowings
1,187.1
412.3
Long-term borrowings
4,138.8
4,627.1
Cash and cash equivalents
(3,172.2)
(1,834.6)
Net financial debt
2,153.7
3,204.8
Reconciliation of adjusted operating profit with profit for
the period
In € millions
9M 2023
9M 2024
Profit for the period
937.5
833.9
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
329.8
307.8
Exchange (gains) / losses
(0.4)
16.4
Financial income
(59.1)
(79.0)
Financial expense
66.0
110.6
Operating profit
1,273.8
1,189.7
i) Amortization &
depreciation of revaluation of assets at the time of acquisitions,
other P&L impacts relating to acquisitions and ii) impacts
related to disengagement from Russia (impairment of assets and
effective disposal)
89.7
86.4
Impairment of goodwill
0.0
0.0
Adjusted operating
profit
1,363.5
1,276.1
Reconciliation of EBITDA with profit for the period
In € millions
9M 2023
9M 2024
Profit for the period
937.5
833.9
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
329.8
307.8
Exchange (gains) / losses
(0.4)
16.4
Financial income
(59.1)
(79.0)
Financial expense
66.0
110.6
Operating profit
1,273.8
1,189.7
Depreciation and impairment of
tangible assets (including right-of-use assets)
148.3
161.9
Amortization and impairment of
intangible assets (including capitalized development costs)
109.2
100.5
Impairment of goodwill
0.0
0.0
EBITDA
1,531.3
1,452.1
Reconciliation of cash flow from operations, free cash flow
and normalized free cash flow with profit for the period
In € millions
9M 2023
9M 2024
Profit for the period
937.5
833.9
Adjustments for non-cash movements in
assets and liabilities:
Depreciation, amortization and
impairment
260.3
266.3
Changes in other non-current assets and
liabilities and long-term deferred Taxes
51.6
56.9
Unrealized exchange (gains)/losses
16.3
(6.7)
(Gains)/losses on sales of assets, net
1.4
0.9
Other adjustments
0.2
12.2
Cash flow from operations
1,267.3
1,163.5
Decrease (Increase) in working capital
requirement
79.5
(292.2)
Net cash provided from operating
activities
1,346.8
871.3
Capital expenditure (including capitalized
development costs)
(133.7)
(127.3)
Net proceeds from sales of fixed and
financial assets
1.0
5.2
Free cash flow
1,214.1
749.2
Increase (Decrease) in working capital
requirement
(79.5)
292.2
(Increase) Decrease in normalized working
capital requirement
(21.7)
5.1
Normalized free cash flow
1,112.9
1,046.5
Scope of consolidation
2023
Q1
H1
9M
Full-year
Full consolidation
method
Geiger
3 months
6 months
9 months
12 months
Emos
3 months
6 months
9 months
12 months
Usystems
3 months
6 months
9 months
12 months
Voltadis
Balance sheet only
6 months
9 months
12 months
A. & H. Meyer
Balance sheet only
6 months
9 months
12 months
Power Control
Balance sheet only
Balance sheet only
9 months
12 months
Encelium
Balance sheet only
6 months
9 months
12 months
Clamper
Balance sheet only
Balance sheet only
Balance sheet only
11 months
Teknica
Balance sheet only
4 months
MSS
Balance sheet only
2024
Q1
H1
9M
Full-year
Full consolidation
method
Voltadis
3 months
6 months
9 months
12 months
A. & H. Meyer
3 months
6 months
9 months
12 months
Power Control
3 months
6 months
9 months
12 months
Encelium
3 months
6 months
9 months
12 months
Clamper
3 months
6 months
9 months
12 months
Teknica
3 months
6 months
9 months
12 months
MSS
Balance sheet only
6 months
9 months
12 months
ZPE Systems
Balance sheet only
Balance sheet only
Balance sheet only
To be determined
Enovation
Balance sheet only
Balance sheet only
To be determined
Netrack
Balance sheet only
Balance sheet only
To be determined
Davenham
Balance sheet only
Balance sheet only
To be determined
Vass
Balance sheet only
Balance sheet only
To be determined
UPSistemas
Balance sheet only
To be determined
Disclaimer
This press release may contain forward-looking statements which
are not historical data. Although Legrand considers these
statements to be based on reasonable assumptions at the time of
publication of this release, they are subject to various risks and
uncertainties that could cause actual results to differ from those
expressed or implied herein.
Details on risks are provided in the most recent version of
Legrand Universal Registration Document filed with the Autorité des
marchés financiers (Financial Markets Authority, AMF), which is
available on-line on the websites of both AMF (www.amf-france.org)
and Legrand (www.legrandgroup.com).
Investors and holders of Legrand securities are reminded that no
forward-looking statement contained in this press release is or
should be construed as a promise or a guarantee of actual results,
which are liable to differ significantly. Therefore, such
statements should be used with caution, taking into account their
inherent uncertainty.
Subject to applicable regulations, Legrand does not undertake to
update these statements to reflect events or circumstances
occurring after the date of publication of this release.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy Legrand securities in any
jurisdiction.
Readers are invited to verify the authenticity of Legrand press
releases with the CertiDox app. Learn more at www.certidox.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106925509/en/
Investor relations & financial communication Ronan
MARC (Legrand) +33 1 49 72 53 53. ronan.marc@legrand.com
Press relations Lucie DAUDIGNY (TBWA) +33 6 77 20 71 11.
lucie.daudigny@tbwa-corporate.com
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