Legrand Confirms 2017 Targets Following First Half Growth

The Tip Desk · June 30, 2017 · 3 min read

The electrical and digital building infrastructure specialist reported a 9.1% increase in first half revenue to 2,671.6 million euros.

Legrand reported a rise in first half revenue to 2,671.6 million euros, compared to 2,448.4 million euros in the same period of 2016. The company said this 9.1% increase resulted from a 3.2% organic evolution, a 4.1% increase due to acquisitions, and a 1.6% impact from exchange rate movements.

Adjusted operating income rose 10.9% to 546.3 million euros from 492.7 million euros in the first half of 2016. The company said it offset the impact of marked increases in raw material and component prices through price adjustments in the first and second quarters. Adjusted operating margin before acquisitions stood at 20.6% of revenue, up from 20.1% in the first half of 2016.

Regional performance varied across the group. In Italy, adjusted operating income rose to 112.8 million euros from 103.1 million euros, representing 38.0% of revenue. North and Central America recorded 150.7 million euros in adjusted operating income, up from 129.7 million euros. The rest of Europe saw an increase to 81.2 million euros from 67.2 million euros. France reported 109.1 million euros in adjusted operating income, compared to 107.1 million euros in the prior year.

Net income attributable to the group rose to 316.2 million euros from 283.5 million euros. The company reported that this growth reflected a 49.4 million euro improvement in operating results and a 8.2 million euro decrease in net financial expenses.

Cash flow from operating activities reached 295.7 million euros, up from 249.7 million euros in the first half of 2016. This increase was driven by a rise in gross self-financing margin to 449.4 million euros from 380.5 million euros. However, the company noted that working capital requirements increased, resulting in a cash use of 153.7 million euros compared to 130.8 million euros in the previous year.

Investment activities required 475.9 million euros in the first half of 2017, compared to 447.6 million euros in the first half of 2016. This included 70.6 million euros in investments and capitalized development costs. Legrand said more than 51% of these investments were dedicated to new products.

Net financial debt stood at 1,431.9 million euros as of June 30, 2017, compared to 957.0 million euros on December 31, 2016. The net debt to consolidated equity ratio rose to approximately 36% from approximately 24% at the end of 2016. In July 2017, the company issued a 1.0 billion euro bond in two tranches of 500.0 million euros each to fund the acquisition of Milestone AV Technologies LLC.

Legrand confirmed its full year 2017 objectives, including organic revenue growth between 0% and +3%. The company also confirmed a target adjusted operating margin before acquisitions between 19.3% and 20.1% of revenue.