Legrand Revenue Falls 12.2% in First Half of 2020

The Tip Desk · June 30, 2020 · 2 min read

The electrical and digital infrastructure specialist saw organic sales decline across mature and emerging markets.

Legrand, the global specialist in electrical and digital building infrastructures, reported consolidated revenue of 2,832.6 million euros for the first half of 2020, a decrease of 12.2% compared to the first half of 2019. Organic sales fell 15.2% during the period, with declines of 14.3% in mature countries and 17.8% in new economies.

Acquisitions provided a 3.6% increase to the top line. The company said this growth was driven by the consolidation of Universal Electric, Connectrac, and Jobo Smartech. Legrand also acquired Focal Point, a US architectural lighting provider with annual revenue exceeding 200 million US dollars, during the first half of 2020. The company has completed 10 external growth operations over the last two years across the US, France, China, Germany, New Zealand, and the United Arab Emirates.

Adjusted operating income fell 25.0% to 496.9 million euros, representing 17.5% of sales. The adjusted operating margin before acquisitions, based on the 2019 perimeter, was 17.1%. This figure represents a decrease of 3.4 points compared to 20.5% in the first half of 2019. The company said the limited nature of this margin decline, despite a sudden and significant drop in activity volumes, reflects its reactivity in implementing crisis adaptation measures.

Net income attributable to the Group was 285.7 million euros, down from 415.3 million euros in the first half of 2019. This resulted in a net income of 1.070 euros a share, compared to 1.557 euros a share in the prior year period.

Cash flow from operating activities decreased to 284.1 million euros from 441.0 million euros in the first half of 2019. The company attributed this 156.9 million euro decline primarily to the lower net income. Working capital requirements resulted in a cash use of 161.6 million euros in the first half of 2020, an increase in cash use of 15.7 million euros over the 145.9 million euros used in the first half of 2019.

Total gross debt rose to 5,780.3 million euros as of June 30, 2020, up from 4,191.6 million euros on December 31, 2019. Cash and cash equivalents, including marketable securities, increased to 2,671.2 million euros from 1,710.9 million euros at the end of 2019. Total net debt stood at 3,109.1 million euros on June 30, 2020, compared to 2,480.7 million euros on December 31, 2019.

The net debt to consolidated equity ratio rose to approximately 64% as of June 30, 2020, from 49% on December 31, 2019. The company said it extended the maturity of its debt through the issuance of a new bond loan.