Legrand: Release for the First Nine Months of 2024
Performance at end of September
9M sales trends: +0.3% excluding exchange rates and
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
LIMOGES,
“For the first nine months of the year, sales (excluding currency effects and our exit from
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
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
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,
- 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
2 Excluding exchange-rate effect and impacts linked to the Group’s disengagement from
Financial performance at
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 |
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
The exchange-rate effect on sales in the first nine months of 2024 was -0.7%. Based on average exchange rates in
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 |
||
|
-3.4% |
-4.1% |
||
North and |
+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:
-
Sales in
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
In
Over the first nine months, sales declined in
- 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
In
In
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
In addition, as previously announced2,
Strong acquisition momentum
This year,
-
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, theDutch leader in connected health software;
-
lastly, in the essential infrastructures segment: MSS in
New Zealand and APP inAustralia .
2030 ambitions and growth pillars
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).
- 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 -
----------------
_________________________
1 Based on EBITDA for the past 12 months
2 For more information, see Legrand’s press release dated
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
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,
_________________________
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
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
PDU: Power Distribution Units.
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 |
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. & |
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. & |
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 |
|
|
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
Details on risks are provided in the most recent version of Legrand Universal Registration Document filed with the Autorité des marchés financiers (
Investors and holders of
Subject to applicable regulations,
This press release does not constitute an offer to sell, or a solicitation of an offer to buy
Readers are invited to verify the authenticity of
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106925509/en/
Investor relations & financial communication
Press relations
Lucie DAUDIGNY (TBWA) +33 6 77 20 71 11. lucie.daudigny@tbwa-corporate.com
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