Strong growth in sales and financial
results
Organic rise in sales: +13.1%
Adjusted operating margin before
acquisitions1: 21.9% of sales
Net profit attributable to the Group:
+36.4%
Full-year 2021 targets raised
Regulatory News:
Benoît Coquart, Legrand’s (Paris:LR) Chief Executive Officer,
commented:
“In the first quarter of 2021, our revenues showed a steep rise
in all regions. At constant scope of consolidation and exchange
rates, sales were up +13.1% from the first quarter of 2020, which
represents a +4.9% increase over two years2 and reflects Legrand’s
stronger positions in our markets.
This growth momentum was driven by buoyant demand in residential
and datacenter markets, as well as by the moves made in 2020. These
included in particular the decision to maintain services to our
customers throughout the year’s lockdowns; sales and marketing
initiatives; our vigorous and ongoing program of new-product
development and launches; and stepped-up investment in digital
technologies.
Our first-quarter results reflect a good start to the current
year, with adjusted operating margin (before acquisitions1) equal
to 21.9% of sales, net profit attributable to the Group up +36.4%,
and normalized free cash flow at 16.5% of sales.
Drawing on fundamentals that were strengthened during the crisis
(leadership positions, excellent customer relations, innovation,
financial and ESG performance), Legrand is well positioned to take
full advantage of the next economic cycle, particularly in the
growing segments of the buildings of tomorrow.”
Full-year 2021 Targets Raised
Given its first-quarter achievements, and despite a persistently
uncertain environment due to the pandemic situation and increasing
pressure on supply chains, Legrand is raising its targets for 2021
and is now aiming for:
- organic growth in full-year sales of between +4% and +7%;
- a scope of consolidation effect of at least +3%;
- an adjusted operating margin before acquisitions (at 2020
scope of consolidation) of between 19.6% and 20.4% of sales.
The basis for comparison for both sales and margin will be very
favorable in the second quarter of 2021, and challenging in the
second half of the year, particularly in the third quarter.
Legrand also aims to achieve at least 100% of its CSR roadmap
for 2021, testifying to the ongoing deployment of a bold and
exemplary ESG approach, with a particular focus on the fight
against global warming and the promotion of diversity.
These annual targets are fully in line with the Group’s mid-term
targets released in February 20213.
Financial performance at March 31, 2021
Key figures
Consolidated data
(€ millions)(1)
1st quarter 2020
1st quarter 2021
Change
Sales
1,515.7
1,674.1
+10.5%
Adjusted operating profit
282.6
361.1
+27.8%
As % of sales
18.6%
21.6%
21.9% before acquisitions(2)
Operating profit
260.0
339.9
+30.7%
As % of sales
17.2%
20.3%
Net profit attributable to the Group
167.1
228.0
+36.4%
As % of sales
11.0%
13.6%
Normalized free cash flow
230.4
276.3
+19.9%
As % of sales
15.2%
16.5%
Free cash flow
133.8
245.9
+83.8%
As % of sales
8.8%
14.7%
Net financial debt at March 31
2,872.1
2,400.2
-16.4%
- See appendices to this press release for definitions and
indicator reconciliation tables.
- At 2020 scope of consolidation.
Consolidated sales
In the first quarter of 2021, sales rose +10.5% from the first
quarter of 2020 to total €1,674.1 million.
Organic growth was +13.1% over the period, including +8.8% in
mature countries and +26.9% in new economies.
The impact of the broader scope of consolidation was +3.4%.
Based on acquisitions completed in 2020 and their likely dates of
consolidation, this effect is expected to reach +2.5% in 2021.
The exchange-rate effect on sales in the first quarter of 2021
was -5.5%. Based on average exchange rates in April 2021, the
full-year exchange-rate effect on sales for 2021 should be about
-3%.
Changes in sales by destination at constant scope of
consolidation and exchange rates broke down as follows by
region:
1st quarter 2021 / 1st quarter
2020
Europe
+14.0%
North and Central America
+4.9%
Rest of the world
+29.8%
Total
+13.1%
These changes are analyzed below by geographical region:
- Europe (43.2% of Group revenue): sales in Europe grew
+14.0% at constant scope of consolidation and exchange rates in the
first quarter of 2021.
In Europe’s mature countries (37.2% of Group revenue), sales
rose a steep +14.3% over the period. This was linked to very strong
performances in the region’s main countries, as in France and
Italy, and fueled in particular by many commercial successes.
Sales in Europe’s new economies were up +12.4% in the first
quarter of 2021, reflecting continued solid momentum in Eastern
Europe and Turkey.
- North and Central America (36.7% of Group revenue):
sales increased +4.9% in the first quarter of 2021 at constant
scope of consolidation and exchange rates.
In the United States alone (33.6% of Group revenue), the organic
rise in sales was +4.4% over the first three months of the year.
Growth was driven by continued buoyant business in datacenters and
by solid achievements in residential offerings. Sales in
non-residential applications continued to decline, though less than
in the fourth quarter of 2020.
Sales increased in Mexico and fell slightly in Canada.
- Rest of the world (20.1% of Group revenue):
first-quarter sales were up +29.8% at constant scope of
consolidation and exchange rates.
In Asia-Pacific (12.5% of Group revenue), first-quarter sales
rose a steep +37.1%. They more than doubled in China, with
double-digit growth over two years, and also showed very strong
growth in India, in deteriorating conditions linked to the
pandemic.
In South America (3.7% of Group revenue), sales grew +20.4%.
This included a very significant rebound in sales in Brazil, along
with sustained increases in many other countries in the region.
In Africa and the Middle East (3.9% of Group revenue), sales
rose +19.1%. This included very significant growth in Africa and an
increase in the Middle East.
Adjusted operating profit and margin
In the first quarter of 2021, adjusted operating profit was
€361.1 million, up +27.8%, setting adjusted operating margin at
21.6% of sales over the period.
Before acquisitions (at 2020 scope of consolidation), adjusted
operating margin reached 21.9% in the first quarter of 2021, a
+3.3-point rise from the first quarter of 2020.
This increase in profitability was mainly driven by:
- operating leverage linked to strong sales growth and the
still-limited rise in costs;
- increased sales prices that offset, in value, a rise in raw
materials and components costs that accelerated over the
quarter.
Net profit attributable to the Group
Net profit attributable to the Group increased +36.4% from the
first quarter of 2020 and stood at €228.0 million. This performance
reflects mainly:
- strong growth in operating profit (+€80 million);
- favorable trends (+€5 million) in financial results; and
- the increase (-€24 million) in the Group’s corporate income
tax linked to the rise in profit before tax (the corporate tax rate
was stable at 28.5% in the first quarter of 2021).
Cash generation and balance sheet structure
At €315.0 million, cash flow from operations came to 18.8% of
first-quarter sales, a rise of +4.1 points.
Normalized free cash flow stood at 16.5% of sales, up +19.9% and
+1.3 points higher than in the first quarter of 2020.
At 8.3% of sales4, the working capital requirement remained
under control.
Free cash flow stood at 14.7% of sales, with a steep increase
over the quarter.
For the three-month period, the balance sheet remained solid
with a ratio of net debt to EBITDA5 of 1.6, and cash and cash
equivalents of close to €2.8 billion.
Governance
Changes in Board of Directors6
At the proposal of the Nominating and Governance Committee and
following the approval of the Board of Directors, the nomination of
Jean-Marc Chéry as Independent Director will be put to shareholders
at the annual Combined Ordinary and Extraordinary General Meeting
on May 26, 2021. As chairman and CEO of STMicroelectronics, Mr.
Chéry has solid experience in senior management in a field of
strategic interest.
With his appointment, the composition of the Board of Directors6
would remain in line with best practices in the sector, including
75% independent directors, 42% women and 5 nationalities.
Proposed dividend
As announced on February 11, 20217, Legrand’s Board of Directors
will ask the General Meeting of shareholders to be held on May 26,
2021 to approve the payment of a dividend of €1.42 per share in
respect of 2020.
The ex-dividend date is May 28, 2021, with payment8 on June 1,
2021.
-----------------
The Board adopted consolidated financial statements for
first-quarter 2021 at its meeting on May 4, 2021. These
consolidated financial statements, a presentation of 2021
first-quarter results, and the related teleconference (live and
replay) are available at www.legrandgroup.com.
Key financial dates:
- General Meeting of Shareholders (behind closed doors): May
26, 2021
- Ex-dividend date: May 28, 2021
- Dividend payment: June 1, 2021
- 2021 first-half results: July 30, 2021 “Quiet
period9” starts June 30, 2021
- Capital Markets Day: September 22, 2021
- 2021 nine-month results: November 4, 2021 “Quiet
period9” starts October 5, 2021
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
sustainable growth driven by acquisitions and innovation, with a
steady flow of new offerings—including Eliot* connected products
with enhanced value in use. Legrand reported sales of €6.1 billion
in 2020. 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
*Eliot is a program launched in 2015 by Legrand to speed up
deployment of the Internet of Things in its offering. A result of
the group’s innovation strategy, Eliot aims to develop connected
and interoperable solutions that deliver lasting benefits to
private individual users and professionals.
https://www.legrandgroup.com/en/group/eliot-legrands-connected-objects-program
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 2020
Q1 2021
Trade receivables
716.0
796.0
Inventories
852.4
900.7
Other current assets
210.5
220.8
Income tax receivables
58.1
66.9
Short-term deferred taxes
assets/(liabilities)
96.9
102.7
Trade payables
(590.0)
(674.7)
Other current liabilities
(584.5)
(684.3)
Income tax payables
(54.0)
(70.9)
Short-term provisions
(120.8)
(137.1)
Working capital required
584.6
520.1
Calculation of net financial debt
In € millions
Q1 2020
Q1 2021
Short-term borrowings
1,114.1
1,092.6
Long-term borrowings
3,578.7
4,061.8
Cash and cash equivalents
(1,820.7)
(2,754.2)
Net financial debt
2,872.1
2,400.2
Reconciliation of adjusted operating profit with profit for
the period
In € millions
Q1 2020
Q1 2021
Profit for the period
167.1
228.2
Share of profits (losses) of
equity-accounted entities
0.6
0.0
Income tax expense
66.8
90.8
Exchange (gains) / losses
5.5
(0.4)
Financial income
(2.5)
(1.7)
Financial expense
22.5
23.0
Operating profit
260.0
339.9
Amortization & depreciation of
revaluation of assets at the time of acquisitions and other P&L
impacts relating to acquisitions
22.6
21.2
Impairment of goodwill
0.0
0.0
Adjusted operating profit
282.6
361.1
Reconciliation of EBITDA with profit for the period
In € millions
Q1 2020
Q1 2021
Profit for the period
167.1
228.2
Share of profits (losses) of
equity-accounted entities
0.6
0.0
Income tax expense
66.8
90.8
Exchange (gains) / losses
5.5
(0.4)
Financial income
(2.5)
(1.7)
Financial expense
22.5
23.0
Operating profit
260.0
339.9
Depreciation and impairment of tangible
assets (including right-of-use assets)
46.2
43.8
Amortization and impairment of intangible
assets (including capitalized development costs)
31.7
29.2
Impairment of goodwill
0.0
0.0
EBITDA
337.9
412.9
Reconciliation of cash flow from operations, free cash flow
and normalized free cash flow with profit for the period
In € millions
Q1 2020
Q1 2021
Profit for the period
167.1
228.2
Adjustments for non-cash movements in
assets and liabilities:
Depreciation, amortization and
impairment
78.6
73.9
Changes in other non-current assets and
liabilities and long-term deferred
taxes
15.4
18.8
Unrealized exchange (gains)/losses
(19.3)
(1.7)
(Gains)/losses on sales of assets, net
(16.5)
(4.2)
Other adjustments
(1.8)
0.0
Cash flow from operations
223.5
315.0
Decrease (Increase) in working capital
requirement
(84.9)
(51.4)
Net cash provided from operating
activities
138.6
263.6
Capital expenditure (including capitalized
development costs)
(23.5)
(25.7)
Net proceeds from sales of fixed and
financial assets
18.7
8.0
Free cash flow
133.8
245.9
Increase (Decrease) in working capital
requirement
84.9
51.4
(Increase) Decrease in normalized working
capital requirement
11.7
(21.0)
Normalized free cash flow
230.4
276.3
Scope of consolidation
2020
Q1
H1
9M
Full year
Full consolidation method
Jobo Smartech
Balance sheet only
6 months
9 months
12 months
Focal Point
Balance sheet only
Balance sheet only
7 months
10 months
Borri10
Balance sheet only
Champion One
Balance sheet only
Compose
Balance sheet only
2021
Q1
H1
9M
Full year
Full consolidation method
Jobo Smartech
3 months
6 months
9 months
12 months
Focal Point
3 months
6 months
9 months
12 months
Borri1
3 months
6 months
9 months
12 months
Champion One
Balance sheet only
To be determined
To be determined
To be determined
Compose
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 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.
1 At 2020 scope of consolidation. 2 Two-year compounded result
of published organic changes in the first quarter of 2020 and the
first quarter of 2021. 3 Over a full economic cycle and excluding a
major economic slowdown, the Group aims for: - an average annual
growth in sales, excluding exchange-rate effects, of between +5%
and +10%; - an average adjusted operating margin (Including
restructuring costs) of approximately 20% of sales; - a normalized
free cash flow of between 13% and 15% of sales on average. At the
same time, Legrand will continue to deploy a bold and exemplary ESG
approach, driven by demanding roadmaps, with a particular focus on
the fight against global warming and the promotion of diversity. 4
Based on sales for the last 12 months. 5 Based on EBITDA for the
last 12 months. 6 Subject to approval by the General Meeting of
Shareholders on May 26, 2021. 7 For more information, readers are
invited to consult the press release dated February 11, 2021. 8
This distribution will be made in full out of distributable income.
9 Period of time when all communication is suspended in the run-up
to publication of results. 10 Borri, an Italian UPS specialist,
which until was 2020 consolidated on the equity method.
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version on businesswire.com: https://www.businesswire.com/news/home/20210505006197/en/
Investor relations Legrand Ronan Marc Tel: +33 (0)1 49 72
53 53 ronan.marc@legrand.fr
Press relations Publicis Consultants Laurence Bault Mob:
+33 (0)7 85 90 63 36 laurence.bault@publicisconsultants.com
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