ATTENTION – Add details, comments from management /// Paris, July 31, 2023 (AFP) –
Legrand, the French manufacturer of electrical equipment, announced on Monday that it was raising its annual targets following an 18.8% rise in first-half net profit, despite “a downturn in the construction market”.
Acquisition in Chile: Legrand continues to grow.
On first-half sales of 4.294 billion euros, up 4.9%, the Group generated net income of 650.9 million euros, compared with 548.1 million euros for the same period last year, the Group said in a press release. In the second quarter, sales rose by 3.1% year-on-year in Europe, and even more so in the rest of the world (+8.4%), with the exception of the United States, where they fell by 2.3%. The Limoges-based group’s growth was underpinned by buoyant segments such as energy efficiency solutions, connected products and those for data centers. Legrand has also announced its third acquisition since the start of the year, Teknica, a Chilean specialist in integrated electrical solutions, particularly for data centers (sales of 45 million euros).
“First-half results are very solid, against the backdrop of a generally declining building market”, commented Legrand CEO Benoît Coquart on a conference call.
These results enable the Group to revise upwards its annual growth and, to a lesser extent, margin targets for 2023. “Excluding a major economic slowdown”, Legrand is now targeting sales growth (excluding currency effects and the impact of the withdrawal from Russia) of between +5% and +8% (versus +2% and +6% previously) and an adjusted operating margin, before acquisitions (at 2022 scope) and excluding Russia and related impacts, of around 20.5% of sales (versus around 20% previously).
“We don’t expect any further deterioration (in the second half) compared with a market that was already down in the first half,” commented the CEO in particular.
It’s now a question of “putting a little bit of fuel in the machine, i.e. investing in sales, communication and customer service, so as to get a little bit of additional sales”, he added.
In January, the Group announced its withdrawal from Russia, due to “operational difficulties” linked to the conflict in Ukraine, accompanied by a 150 million euro asset write-down. Its activities in Russia represented around 1.5% of sales in 2022. Like Bonduelle, Leroy Merlin and Auchan (Mulliez), or Lactalis, the Legrand group was one of the few French companies to continue operating in Russia, which was hit by multiple European sanctions after the invasion of Ukraine in February 2022.
