In a building market in retreat, Legrand
recorded solid results and specifies its annual targets -
Solid financial performance Sales: +2.5%, i.e. +5.8%
excluding exchange rates and Russia Adjusted operating margin:
21.6% of sales Rise in net earnings per share: +15.9% Free cash
flow: €1,214 million, 19.2% of sales - Dynamic external growth
in buoyant segments Acquisition of ZPE Systems in datacenters 4
acquisitions announced in 2023 - 2023 full-year targets
specified Sales growth (excl. FX and Russia): around +5%
Adjusted operating margin: 20.5% to 21.0% of sales before
acquisitions and Russia
Regulatory News:
Legrand (Paris:LR):
Benoît Coquart, Legrand’s Chief Executive Officer,
commented:
“The first nine months of the year have confirmed trends
observed in the first half, with an overall building market in
retreat. Despite this unfavorable context, Legrand has recorded
very strong results with revenue up +2.5%, driven by organic growth
of +3.7%. The Group's financial indicators are very robust, with
adjusted operating margin at 21.6% of sales, free cash flow of
1,214 million euros, net profit at 14.9% of sales, and net earnings
per share up +15.9%.
We are actively pursuing the implementation of our growth
strategy, as evidenced by the strength of our faster expanding
segments (energy efficiency solutions, connected products, and
datacenters) and continued acquisitions including today's
announcement of ZPE Systems in the United States, on top of the 3
operations announced since the beginning of the year.
Given the uncertain economic outlook, and driven by the
unwavering and determined engagement of our teams, Legrand will
deploy initiatives to both seize any growth opportunities on its
markets and optimize its cost structures.”
2023 full-year targets specified1
In 2023, the Group is pursuing the profitable and responsible
development laid out in its strategic roadmap.
Taking into account achievements reported in the first nine
months of the year and the world’s current short-term macroeconomic
outlook, Legrand has now set the following full-year targets for
2023:
- sales growth at constant exchange rates and excluding Russia
impacts2 of around +5% (vs +5% and +8% previously), including an
organic growth of between +2.5% and +3.5% and a scope of
consolidation effect linked to acquisitions of close to +2%;
- an adjusted operating margin between 20.5% to 21.0% of sales
before acquisitions, at 2022 scope of consolidation, and excluding
Russia and related impacts (vs around 20.5% previously);
- at least 100% CSR achievement rate for the second year of its
2022-2024 roadmap.
Financial performance at September 30,
2023
Key figures
Consolidated data
(€ millions)(1)
9 months 2022
9 months 2023
Change
Sales
6,153.7
6,307.3
+2.5%
Adjusted operating profit
1,240.3
1,363.5
+9.9%
As % of sales
20.2%
21.6%
21.9% before acquisitions and
Russia(2)
Operating profit
1,164.7
1,273.8
+9.4%
As % of sales
18.9%
20.2%
Net profit attributable to the Group
811.7
937.2
+15.5%
As % of sales
13.2%
14.9%
Normalized free cash flow
1,000.0
1,112.9
+11.3%
As % of sales
16.3%
17.6%
Free cash flow
616.9
1,1214.1
+96.8%
As % of sales
10.0%
19.2%
Net financial debt at September 30
2,660.0
2,153.7
-19.0%
(1) See appendices to this press release
for definitions and indicator reconciliation tables.
(2) At 2022 scope of consolidation,
excluding Russia and related impacts.
Consolidated sales
In the first nine months of 2023, sales rose a total of +2.5%
from the same period of 2022, reaching €6,307.3 million.
Organic growth in sales was +3.7% over the period, including
+1.9% in mature countries and +9.0% in new economies. In a building
market in retreat, these figures point to resilience buoyed by the
faster expanding segments, by pricing power, and by the Group’s
robust commercial performance.
The impact of broader scope of consolidation was +1.3%,
including +2.1% from acquisitions and -0.7% reflecting the net
impact of the Group’s disengagement from Russia. Based on
acquisitions made and their likely dates of consolidation, as well
as the effective sale of the Group’s Russian activities at October
4, 2023, the overall impact should be close to +1% full year, of
which close to +2% linked to acquisitions and -1% to the impact of
disengagement from Russia.
The exchange-rate effect on sales in the nine months of 2023 was
-2.4%. Based on the average exchange rates in October 2023 alone,
the full-year exchange-rate effect on sales should be close to -3 %
in 2023.
Changes in sales by destination at constant scope of
consolidation and exchange rates broke down as follows by
region:
9 months 2023 / 9 months
2022
3rd quarter 2023 / 3rd quarter
2022
Europe
+7.1%
+7.6%
North and Central America
-0.9%
-3.2%
Rest of the world
+6.2%
+2.5%
Total
+3.7%
+1.8%
These changes are analyzed below by geographical region:
- Europe (41.9% of Group revenue): growth at constant
scope of consolidation and exchange rates was a solid +7.1% in the
first nine months of 2023, with the third quarter alone delivering
+7.6%, driven by strong growth in energy efficiency solutions,
datacenters and connected products despite a residential market
that retreated in most geographies.
In Europe’s mature countries (35.8% of Group revenue), sales
rose organically by +5.6% in the first nine months of 2023,
including +6.7% in the third quarter alone, with strong growth
during the first nine months in several countries: Italy, Spain,
and Germany; good resilience in France, the United Kingdom, the
Netherlands, and Belgium.
Sales in Europe’s new economies rose +17.3% in the first nine
months of 2023. In the third quarter alone, sales grew +13.6%,
buoyed by a strong rise in Turkey in particular.
- North and Central America (38.9% of Group revenue):
sales decreased -0.9% from the first nine months of 2022 at
constant scope of consolidation and exchange rates.
In the United States (35.4% of Group revenue), sales declined
-1.6% in the first nine months of the year, including -3.9% in the
third quarter alone. In the first nine months of the year, a period
that saw building markets lose ground overall, this reflected a
fall in offers targeting both residential and non-residential
applications, trends that were offset in part by double-digit
growth in sales to datacenters.
Over the first nine months, sales rose sharply in Canada and
decreased slightly in Mexico.
- Rest of the world (19.2% of Group revenue): sales
marked an organic rise of +6.2% in the first nine months of
2023.
In Asia-Pacific (12.6% of Group revenue), sales rose +7.4% in
the first nine months of the year and +3.7% in the third quarter
alone. Over nine months, this good momentum reflects very sustained
growth in India and stability in China.
In Africa and the Middle East (3.5% of Group revenue), sales
were up +10.9% in the first nine months of the year and +3.7% in
the third quarter. Over nine months, sales trends were upbeat both
in Africa and in the Middle East.
In South America (3.1% of Group revenue), in a deteriorated
economic environment, sales were down ‑3.1% in the first nine
months of the year, linked in particular to Brazil, and declined
-3.4% in the third quarter alone.
Adjusted operating profit and margin
Adjusted operating profit for the first nine months of 2023
stood at €1,363.5 million, up +9.9% from the first nine months of
2022. This corresponds to an adjusted operating margin equal to
21.6% of sales for the period.
Before acquisitions (at 2022 scope of consolidation) and
excluding Russia, adjusted operating margin for the first nine
months of 2023 stood at 21.9% of sales, up +1.7 points from the
corresponding period of 2022.
The impacts of acquisitions and of Russia on adjusted operating
margin in the first nine months of 2023 were respectively -0.2
points and -0.1 points.
Over this period, the high profitability level demonstrates once
again Legrand’s strong resilience in a building market environment
in retreat.
Solid value creation and balance sheet
Net profit attributable to the Group came to €937.2 million, up
+15.5% from the first nine months of 2023 and equal to 14.9% of
sales. This rise was due primarily to an increase in operating
profit, the positive impact of financial results, and a corporate
income tax rate of 26.0%.
Net earnings per share stood at €3.53, for a rise of 15.9% from
the first nine months of 2022.
Free cash flow came to 19.2% of sales over the period, to total
€1,214.1 million, in a context of continued strengthened coverage
of inventories that is expected to gradually return to normal.
Normalized free cash flow was up +11.3% at 17.6% of sales.
The ratio of net debt to EBITDA3 stood at 1.1 on September 30,
2023. Legrand Group’s cash position stood at €3.2 billion, and the
maturity of gross debt was 4.4 years, with over 90% in fixed-rate
instruments.
Impacts of the sale of Legrand’s Russian activities
Following its decision to disengage from Russia as communicated
on January 25, 2023, and after examining various options, Legrand
announced the sale of its Russian operations to a local industrial
player, effective October 4, 20234. Following this divestiture,
Legrand no longer has any operations in the Russian market.
The impacts related to the sale of Group operations in Russia
will be recorded in the fourth quarter of 2023. These net impacts
in 2023 are estimated to be a loss of around €45 million on net
income and a positive cash impact of around €15 million.
Dynamic external growth in buoyant
segments
After the announcements earlier this year of acquisitions
including Clamper in Brazil, Encelium in the United
States, and Teknica in Chile, Legrand has pursued its
strategic roadmap by announcing the acquisition of ZPE Systems,
Inc. in the United States5.
ZPE Systems is a leading American specialist in secure
serial console servers and services routers that enable remote
access and management of network IT equipment from datacenters to
the edge.
ZPE Systems offers critical solutions and services to deliver
infrastructure resilience and security for customers’
business-critical infrastructure. Edge computing, artificial
intelligence and operational technology will require more complex
datacenters and edge infrastructure with intelligent IT needs to be
built in disparate remote geographies. This makes remote management
and operation a critical requirement. ZPE Systems is well
positioned to address this need through high performance automation
infrastructure solutions. This acquisition allows Legrand to enter
a promising new segment, highly complementary to its existing
offerings for datacenters (PDU, busways, cabinets and racks, fiber
and copper cabling systems, KVM and more), whose strong growth is
expected to accelerate further with the development of artificial
intelligence and associated needs.
Based in Fremont, California, ZPE Systems employs over 140
people, reporting annual sales of more than $80 million.
Each of the 4 acquisitions announced this year strengthens the
Group's leadership positions in faster expanding segments.
The consolidated financial statements for the first nine months
of 2023, a presentation, and the related teleconference (live and
replay) are available at www.legrandgroup.com.
Key financial dates:
- 2023 annual results: February 15, 2024 “Quiet period1”
starts January 16, 2024
- 2023 first-quarter results: May 3, 2024 “Quiet period1”
starts April 3, 2024
- General Meeting of Shareholders: May 29, 2024
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 €8.3
billion in 2022. The company is listed on Euronext Paris and is
notably a component stock of the CAC 40, CAC 40 ESG and CAC SBT 1.5
indexes. (code ISIN FR0010307819).
https://www.legrandgroup.com
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
9M 2022
9M 2023
Trade receivables
1,032.4
1,015.2
Inventories
1,550.0
1,305.1
Other current assets
275.6
291.1
Income tax receivables
138.7
152.7
Short-term deferred taxes
assets/(liabilities)
112.9
109.1
Trade payables
(878.1)
(885.2)
Other current liabilities
(818.3)
(846.0)
Income tax payables
(77.2)
(79.1)
Short-term provisions
(128.1)
(147.0)
Working capital required
1,207.9
915.9
Calculation of net financial debt
In € millions
9M 2022
9M 2023
Short-term borrowings
416.1
1,187.1
Long-term borrowings
4,467.6
4,138.8
Cash and cash equivalents
(2,223.7)
(3,172.2)
Net financial debt
2,660.0
2,153.7
Reconciliation of adjusted operating profit with profit for
the period
In € millions
9M 2022
9M 2023
Profit for the period
812.0
937.5
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
300.4
329.8
Exchange (gains) / losses
(2.0)
(0.4)
Financial income
(9.3)
(59.1)
Financial expense
63.6
66.0
Operating profit
1,164.7
1,273.8
(i) Amortization & depreciation of
revaluation of assets at the time of acquisitions and other P&L
impacts relating to acquisitions, (ii) assets impairment in
Russia
75.6
89.7
Impairment of goodwill
0.0
0.0
Adjusted operating profit
1,240.3
1,363.5
Reconciliation of EBITDA with profit for the period
In € millions
9M 2022
9M 2023
Profit for the period
812.0
937.5
Share of profits (losses) of
equity-accounted entities
0.0
0.0
Income tax expense
300.4
329.8
Exchange (gains) / losses
(2.0)
(0.4)
Financial income
(9.3)
(59.1)
Financial expense
63.6
66.0
Operating profit
1,164.7
1,273.8
Depreciation and impairment of tangible
assets (including right-of-use assets)
147.7
148.3
Amortization and impairment of intangible
assets (including capitalized development costs)
99.3
109.2
Impairment of goodwill
0.0
0.0
EBITDA
1,411.7
1,531.3
Reconciliation of cash flow from operations, free cash flow
and normalized free cash flow with profit for the period
In € millions
9M 2022
9M 2023
Profit for the period
812.0
937.5
Adjustments for non-cash movements in
assets and liabilities:
Depreciation, amortization and
impairment
249.7
260.3
Changes in other non-current assets and
liabilities and long-term deferred Taxes
92.5
51.6
Unrealized exchange (gains)/losses
2.4
16.3
(Gains)/losses on sales of assets, net
0.1
1.4
Other adjustments
(0.9)
0.2
Cash flow from operations
1,155.8
1,267.3
Decrease (Increase) in working capital
requirement
(438.5)
79.5
Net cash provided from operating
activities
717.3
1,346.8
Capital expenditure (including capitalized
development costs)
(102.8)
(133.7)
Net proceeds from sales of fixed and
financial assets
2.4
1.0
Free cash flow
616.9
1,214.1
Increase (Decrease) in working capital
requirement
438.5
(79.5)
(Increase) Decrease in normalized working
capital requirement
(55.4)
(21.7)
Normalized free cash flow
1,000.0
1,112.9
Scope of consolidation
2022
Q1
H1
9M
Full-year
Full consolidation method
Geiger
Balance sheet only
6 months
9 months
12 months
Emos
Balance sheet only
Balance sheet only
Balance sheet only
9 months
Usystems
Balance sheet only
Balance sheet only
7 months
Voltadis
Balance sheet only
Balance sheet only
A. & H. Meyer
Balance sheet only
Balance sheet only
Power Control
Balance sheet only
Balance sheet only
Encelium
Balance sheet only
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
To be determined
Teknica
Balance sheet only
To be determined
ZPE Systems
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.
____________________________ 1 For more information, see Legrand
press releases dated February 9, May 4 and July 31, 2023. 2 For
more information, see Legrand press releases dated January 25 and
October 12, 2023. 3 Based on EBITDA for the past 12 months. 4 For
more information, see note 2 and note 9 to the consolidated
financial statements for the first nine months of 2023. 5 Subject
to standard conditions precedent.
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/20231107975195/en/
Investor relations Legrand Ronan Marc Tel: +33 (0)1 49 72
53 53 ronan.marc@legrand.com
Press relations TBWA Corporate Tiphaine Raffray Mob: +33
(0)6 58 27 78 98 tiphaine.raffray@tbwa-corporate.com
Luminex Resources (TSXV:LR)
Historical Stock Chart
Von Apr 2024 bis Mai 2024
Luminex Resources (TSXV:LR)
Historical Stock Chart
Von Mai 2023 bis Mai 2024