Full Year 2024 Legrand SA Earnings Call Transcript
Key Points
- Legrand SA (LGRDY) achieved its 2024 targets with a 3.9% increase in organic plus M&A sales and a strong adjusted EBIT margin of 20.5%.
- The company reported a robust free cash flow of EUR1.3 billion, representing 14.9% of sales with a conversion rate of 111%.
- Legrand SA (LGRDY) has a strong position in the data center market, which now represents 20% of its sales, with an average annual sales growth of 19% over the last five years.
- The company has a solid balance sheet with a net debt-to-EBITDA ratio of 1.5, reflecting its strong cash generation and acquisition pace.
- Legrand SA (LGRDY) set ambitious 2025 targets, aiming for sales growth between 6% and 10%, driven by both organic growth and acquisitions.
- Sales in Europe fell organically by 2.3% in 2024, with the building market in retreat across most geographies.
- The company experienced a sharp decline in sales in China due to a steep decline in construction markets.
- Legrand SA (LGRDY) faced a negative scope effect from Russia, impacting sales by -0.6% in 2024.
- The company anticipates only a maximum of 1% pricing increase in 2025 due to a non-inflationary environment for raw materials and components.
- Legrand SA (LGRDY) expects continued challenges in the European residential and US office markets, with recovery anticipated only towards the end of 2025.
As you know, we have published today our press release, financial statements and a slide show to which we will refer. 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, we fully achieved our 2024 targets with both a nice growth coming from data centers and M&A and high levels of profitability and cash generation. Second, the main initiatives we pursued in 2024 are clearly putting us on track to meet our 2030 ambitions. Third, we are setting 2025 targets aimed at accelerating growth with sales up between plus 6% and plus 10% for the full year.
Starting on page 6, we fully achieved our targets for 2024 with organic plus M&A sales up plus 3.9%, 20.5% adjusted EBIT margin after acquisitions, and 113% of CSR achievement rate.
Moving to page 7, I will comment on sales trends. In 2024, excluding FX and Russia, our sales increased by almost plus 4%, including an organic trend of plus 1%
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