Strong growth in sales: +17.8%
including organic growth: +11.2%
Results hold firm amid strong inflationary
trends
Adjusted operating margin: 20.3% of
sales
Rise in net profit: +13%
2022 full-year targets confirmed
Regulatory News:
Legrand (Paris:LR):
Benoît Coquart, Legrand’s Chief Executive Officer,
commented:
“Legrand reported solid results in the first quarter of
2022.
Sales rose a total of +17.8%. This increase was driven mainly by
organic growth of +11.2%, a strong showing that reflected
successful sales and marketing initiatives as well as effective
management of supply chain pressures.
In a widespread inflationary context, adjusted operating margin
held firm at 20.3% of sales, while net profit rose +13%.
The environment early this year has been particularly unstable.
It is characterized by factors that predate 2022 and continue to
apply, including inflation in production and operating expenses,
reduced availability of raw materials and components, and continued
pandemic restrictions in some countries. These are now amplified by
fallout from the conflict between Russia and Ukraine. Yet despite
these rising uncertainties,
first-quarter results testify once again to the effectiveness of
our business model aimed at creating profitable and responsible
value. It is on this basis that Legrand has confirmed the annual
targets announced in February1.
The Group also recently published its fifth CSR2 roadmap
which sets out Legrand’s commitment to achieving ambitious and
concrete ESG targets.”
2022 full-year targets confirmed1
In 2022, Legrand is pursuing its strategy
of profitable and responsible development laid out in its strategic
roadmap3.
Taking into account achievements in the
first quarter of 2022 and the current macroeconomic outlook,
Legrand has confirmed the full-year targets it set for 2022:
- growth in sales at constant exchange
rates of between +5% and +11%, with (i) organic growth of between
+3% and +7% and (ii) a scope of consolidation effect of between +2%
and +4%;
- an adjusted operating margin of about
20% of sales, with (i) a margin of between 19.9% and 20.7% before
acquisitions (at 2021 scope of consolidation) and (ii) dilution
from acquisitions of between -20 and -40 basis points.
The Group also aims to reach around 100%
of CSR achievement for the first year of its 2022-2024 roadmap,
testifying to its bold and exemplary approach to ESG.
__________________________________ 1 For more information, see
Legrand press release dated February 10, 2022. 2 For more
information, see Legrand press release dated March 29, 2022. 3 For
more information, see Legrand press release dated September 22,
2021.
Readers are invited to verify the authenticity of Legrand press
releases with the CertiDox app. Learn more at www.certidox.com
Financial performance at March 31, 2022
Key figures
Consolidated data (€
millions)(1)
1st quarter 2021
1st quarter 2022
Change
Sales
1,674.1
1,972.3
+17.8%
Adjusted operating profit
361.1
401.2
+11.1%
As % of sales
21.6%
20.3%
20.6% before acquisitions(2)
Operating profit
339.9
377.6
+11.1%
As % of sales
20.3%
19.1%
Net profit attributable to the Group
228.0
258.3
+13.3%
As % of sales
13.6%
13.1%
Normalized free cash flow
276.3
318.1
+15.1%
As % of sales
16.5%
16.1%
Free cash flow
245.9
44.4
-81.9%
As % of sales
14.7%
2.3%
Net financial debt at March 31
2,400.2
2,637.8
+9.9%
(1) See appendices to this press release for definitions and
indicator reconciliation tables. (2) At 2021 scope of
consolidation.
Consolidated sales
In the first quarter of 2022, sales rose a total of +17.8% from
the same period of 2021 to reach €1,972 million.
Organic growth in sales was +11.2% for the quarter, including
+10.1% in mature countries and +14.4% in new economies. This trend
reflects active management of the supply chain, which has been
under strong pressure since the third quarter of 2021, along with
the success of various development initiatives and the Group’s
pricing power.
The impact of the broader scope of consolidation was +3.2%.
Based on acquisitions completed and their likely dates of
consolidation, this impact should be close to +3% for the full
year.
The exchange-rate effect on sales in the first quarter of 2022
was +2.6%. Based on average exchange rates in April 2022, the
full-year exchange-rate effect on sales should be close to +3.5% in
2022.
Changes in sales by destination at constant scope of
consolidation and exchange rates broke down as follows by
region:
1st quarter 2022 / 1st quarter
2021
Europe
+12.9%
North and Central America
+11.2%
Rest of the world
+7.5%
Total
+11.2%
These changes are analyzed below by geographical region:
- Europe (42.9% of Group revenue): organic growth was
+12.9% in the first quarter of 2022.
In Europe’s mature countries (36.9% of Group revenue), sales
rose +10.0% organically.
Sales in Europe’s new economies rose +31.2%, with the conflict
between Russia and Ukraine having only a limited impact over the
quarter. Together, these two countries accounted for around 2% of
Group sales
in full-year 2021.
- North and Central America (37.9% of Group revenue):
sales increased +11.2% from the first quarter of 2021 at constant
scope of consolidation and exchange rates.
In the United States alone (34.7% of Group revenue), sales rose
+11.1%. This increase was more particularly driven by marked growth
in sales of non-residential applications.
Sales were also on the rise in both Canada and Mexico.
- Rest of the world (19.2% of Group revenue): sales
marked an organic rise of +7.5% in the first quarter of 2022.
In Asia-Pacific (12.1% of Group revenue), the rise in sales was
+8.1%. This reflects in particular a very significant increase in
India, growth in Australia, and a decline in China.
In Africa and the Middle East (3.6% of Group revenue), sales
were up +5.2%, linked to solid achievements in many African
countries and a very slight uptick in the Middle East.
In South America (3.5% of Group revenue), sales rose +7.9%. With
the exception of Brazil, where business declined, all main
countries in the region reported strong growth in sales.
Adjusted operating profit and margin
Adjusted operating profit for the first quarter of 2022 stood at
€401 million, up +11.1% from the first three months of 2021. This
corresponds to an adjusted operating margin representing 20.3% of
sales for the period.
Before acquisitions (at 2021 scope of consolidation), adjusted
operating margin for the first quarter of 2022 was equal to 20.6%
of sales, down -1.0 point compared with the first quarter of 2021,
which was a demanding basis for comparison.
Amid a widespread inflationary environment (including a rise of
around +18% for raw material and components in the first quarter of
the year), this resistance reflects the Group’s mastery of its
expenses and sales pricing.
Net profit attributable to the Group
Net profit attributable to the Group for the period was up
+13.3% from the first quarter of 2021, totalling €258 million. This
€30 million increase results primarily from:
- a rise in operating profit (+€38
million);
- an unfavourable trend (-€3 million) in
financial and foreign-exchange results; and
- a rise in corporate income tax (-€5
million).
Cash generation and balance sheet structure
Cash flow from operations (€363 million) stood at 18.4% of
first-quarter 2022 sales, down -0.4 points from the same period of
2021.
Normalized free cash flow came to 16.1% of sales or €318
million, a rise in value of +15.1% from the first quarter of
2021.
Free cash flow was 2.3% of sales for the three-month period,
including in particular continued strengthened coverage of
inventories to serve Group customers best.
The ratio of net debt to EBITDA1 was 1.6 at March 31, 2022, and
Standard and Poor’s confirmed Legrand’s A- rating with stable
outlook in March 2022.
ESG commitment and ambitions: fifth CSR roadmap unveiled,
covering 2022-2024
On March 29, 2022, Legrand held a virtual ESG event for
investors2.
On this occasion, the Group unveiled more particularly its fifth
CSR roadmap, aimed at amplifying its impact through a four-pillar
action plan with 15 strategic priorities3 that contribute to 10 of
the UN’s Sustainable Development Goals (SDG). Key topics in this
new 2022-2024 roadmap are aimed at (i) reducing Legrand’s carbon
footprint, (ii) promoting diversity and inclusion, (iii) developing
the circular economy, and (iv) pursuing initiatives as a
responsible business.
Buoyed by an integrated approach to performance, starting with
executive and management compensation, and backed by exemplary
governance, Legrand’s approach to ESG is in keeping with its
strategic roadmap4 and medium-term financial targets.
Governance
Changes to the Board of Directors5
At the proposal of the Nomination and Governance Committee and
following the approval of the Board of Directors, the nomination of
Florent Menegaux as independent Director will be put to
shareholders at the annual Combined Ordinary and Extraordinary
General Meeting of Shareholders to be held on May 25, 2022. Mr.
Menegaux is Chief Executive Officer of Michelin and is backed by a
proven track record as head of a major listed industrial
company.
The Board of Directors would thus be made up of 83% independent
Directors and 42% women, as well as five different nationalities,
remaining one of the Boards with the industry’s best practices.
Proposed dividend
As announced on February 10, 2022, Legrand’s Board of Directors
will ask the General Meeting of Shareholders to be held on May 25,
2022 to approve the payment of a dividend of €1.65 per share in
respect of 2021. This represents a rise of +16.2% from 2020 and a
payout ratio, in line with the Group’s mid-term targets, of nearly
50%. The ex-dividend date is May 30, 2022, with payment6 on June 1,
2022.
__________________________________ 1 Based on EBITDA for the
past 12 months. 2 The presentation and replay are available in full
on www.legrandgroup.com at this link:
https://www.legrandgroup.com/en/investors-and-shareholders/capital-markets-days/esg-capital-markets-day-2022.
3 For more information on targets set in the fifth CSR roadmap,
readers should consult the media kit published on legrandgroup.com
at this link:
https://www.legrandgroup.com/sites/default/files/Documents_PDF_Legrand/RSE/2022/DP_CSR_2022_1649314469.pdf.
4 For more information, see the press release dated September 22,
2021. 5 Subject to the approval of the General Meeting of
Shareholders on May 25, 2022. 6 This distribution will be made in
full out of distributable income.
The Board adopted consolidated financial statements for
first-quarter 2022 at its meeting on May 4, 2022. These
consolidated financial statements, a presentation of 2022
first-quarter results, and the related teleconference (live and
replay) are available at www.legrandgroup.com.
Key financial dates:
- General Meeting of Shareholders: May 25, 2022
- Ex-dividend date: May 30, 2022
- Dividend payment: June 1, 2022
- 2022 first-half results: July 29, 2022 “Quiet period10”
starts June 29, 2022
- 2022 nine-month results: November 3, 2022 “Quiet
period1” starts October 4, 2022
About Legrand
Legrand is the global specialist in
electrical and digital building infrastructures. Its comprehensive
offering of solutions for commercial, industrial and residential
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 its strategy of profitable and
responsible growth driven by acquisitions and innovation, with a
steady flow of new offerings—including products with enhanced value
in use (faster expanding segments: datacenters, connected offerings
and energy efficiency programs). Legrand reported sales of €7.0
billion in 2021. The company is listed on Euronext Paris and is
notably a component stock of the CAC 40 and CAC 40 ESG 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 amortization and
depreciation of revaluation of assets at the time of acquisitions
and for other P&L impacts relating to acquisitions and, where
applicable, for 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
Q1 2021
Q1 2022
Trade receivables
796.0
1,020.9
Inventories
900.7
1,345.0
Other current assets
220.8
258.0
Income tax receivables
66.9
98.5
Short-term deferred taxes
assets/(liabilities)
102.7
98.4
Trade payables
(674.7)
(863.2)
Other current liabilities
(684.3)
(768.7)
Income tax payables
(70.9)
(68.0)
Short-term provisions
(137.1)
(149.1)
Working capital required
520.1
971.8
Calculation of net financial
debt
In € millions
Q1 2021
Q1 2022
Short-term borrowings
1,092.6
836.4
Long-term borrowings
4,061.8
4,579.9
Cash and cash equivalents
(2,754.2)
(2,778.5)
Net financial debt
2,400.2
2,637.8
Reconciliation of adjusted operating
profit with profit for the period
In € millions
Q1 2021
Q1 2022
Profit for the period
228.2
258.5
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
90.8
95.7
Exchange (gains) / losses
(0.4)
1.0
Financial income
(1.7)
(2.0)
Financial expense
23.0
24.4
Operating profit
339.9
377.6
Amortization & depreciation of
revaluation of assets at the time of acquisitions and other P&L
impacts relating to acquisitions
21.2
23.6
Impairment of goodwill
0.0
0.0
Adjusted operating profit
361.1
401.2
Reconciliation of EBITDA with profit
for the period
In € millions
Q1 2021
Q1 2022
Profit for the period
228.2
258.5
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
90.8
95.7
Exchange (gains) / losses
(0.4)
1.0
Financial income
(1.7)
(2.0)
Financial expense
23.0
24.4
Operating profit
339.9
377.6
Depreciation and impairment of tangible
assets (including right-of-use assets)
43.8
47.0
Amortization and impairment of intangible
assets (including capitalized development costs)
29.2
31.8
Impairment of goodwill
0.0
0.0
EBITDA
412.9
456.4
Reconciliation of cash flow from
operations, free cash flow and normalized free cash flow with
profit for the period
In € millions
Q1 2021
Q1 2022
Profit for the period
228.2
258.5
Adjustments for non-cash movements in
assets and liabilities:
Depreciation, amortization and
impairment
73.9
79.8
Changes in other non-current assets and
liabilities and long-term deferred
taxes
18.8
23.4
Unrealized exchange (gains)/losses
(1.7)
0.6
(Gains)/losses on sales of assets, net
(4.2)
0.3
Other adjustments
0.0
0.1
Cash flow from operations
315.0
362.7
Decrease (Increase) in working capital
requirement
(51.4)
(292.3)
Net cash provided from operating
activities
263.6
70.4
Capital expenditure (including capitalized
development costs)
(25.7)
(26.4)
Net proceeds from sales of fixed and
financial assets
8.0
0.4
Free cash flow
245.9
44.4
Increase (Decrease) in working capital
requirement
51.4
292.3
(Increase) Decrease in normalized working
capital requirement
(21.0)
(18.6)
Normalized free cash flow
276.3
318.1
Scope of consolidation
2021
Q1
H1
9M
Full year
Full consolidation
method
Champion One
Balance sheet only
6 months
9 months
12 months
Compose
Balance sheet only
6 months
9 months
12 months
Ecotap
Balance sheet only
6 months
Ensto Building Systems
2 months
Geiger
Balance sheet only
2022
Q1
H1
9M
Full year
Full consolidation
method
Champion One
3 months
6 months
9 months
12 months
Compose
3 months
6 months
9 months
12 months
Ecotap
3 months
6 months
9 months
12 months
Ensto Building Systems
3 months
6 months
9 months
12 months
Geiger
Balance sheet only
To be determined
To be determined
To be determined
Emos
Balance sheet only
To be determined
To be determined
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).
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 shares in any
jurisdiction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504006040/en/
Investor relations
Legrand Ronan Marc Tel: +33 (0)1 49 72 53 53
ronan.marc@legrand.fr
Press relations
Publicis Consultants Sabine Tordeux Mob: +33 (0)6 11 36 26 32
sabine.tordeux@publicisconsultants.com
Cécile Debrie Mob: +33 (0)6 16 99 62 65
cecile.debrie@publicisconsultants.com
Grafico Azioni Legrand (EU:LR)
Storico
Da Mar 2024 a Apr 2024
Grafico Azioni Legrand (EU:LR)
Storico
Da Apr 2023 a Apr 2024
