Half Year 2024 Legrand SA Earnings Call Transcript
Key Points
- Legrand SA (LGRDY) reported a solid adjusted operating margin of 20.8% in the first half of 2024, demonstrating resilience despite a decrease in sales.
- The company achieved a strong performance in the US market, with a 7.9% rise in sales in the second quarter, driven by growth in the datacenter segment and non-residential applications.
- Legrand SA (LGRDY) is actively pursuing its acquisition strategy, with five acquisitions announced this year, totaling more than EUR200 million in annual sales, particularly in the datacenter segment.
- The company's balance sheet remains robust with a net debt-to-EBITDA ratio of 1.8, reflecting solid free cash flow generation and a strong pace of acquisitions.
- Legrand SA (LGRDY) confirmed its full-year targets, expecting low single-digit growth for sales, both organically and through acquisitions, and maintaining a high adjusted operating margin.
- Sales in the first half of 2024 decreased by 0.7% excluding exchange rate effects in Russia, with an organic decline of 2.0%, highlighting challenges in the building market.
- European sales fell by 3.2% in the first half of 2024 due to a persistently tough building market in most countries.
- The company's free cash flow margin was lower than in recent years, at 11.1% of sales, attributed to higher working capital requirements, particularly in inventory to support the datacenter business.
- Legrand SA (LGRDY) faced a negative scope effect from Russia, impacting sales by 0.9% in the first half and expected to be 0.6% for the full year 2024.
- The renovation market in Europe remains challenging, with no significant improvement expected in the near term, impacting sales growth potential.
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Thanks a lot. Good morning, everybody. Franck, Ronan and me are happy to welcome you to the Legrand 2024 first half results conference call and webcast.
As you know, this call is recorded. So we have published today our press release, financial statements and a slide show to which we will refer. Those documents are, as usual, available on the Legrand website.
After a few opening remarks, we will comment the results into more details. I begin on Page 4 with the three key takeaways of this release. First, in a building market that remains depressed in many geographies, Legrand reports good resilience in the first half including sales growth in the second quarter and very firm margins.
Second, we are actively rolling out our strategy through acquisitions and renovation. Last, we confirm our full year targets. As a reminder, we will host a Capital Markets Day in September 2024 in London.
So moving now to Page 6 and to Page 7, I will start with an overview
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