Total growth in sales +10%
Integrated performance fully in line with targets
Organic growth in sales: +2.6%
Adjusted operating margin before acquisitions1: 20.4%
Achievement rate of CSR roadmap2: 113%
Strong value creation
Net profit attributable to the Group: +8%
Normalized free cash flow: +13%
Strengthening profitable growth profile
Continued deployment of Eliot program
Innovation-driven enrichment of product offering
Three acquisitions made in 2019
Ongoing momentum for improving performance
On the closing of full-year accounts for 2019, Benoît Coquart, Legrand’s Chief Executive Officer, commented:
“In 2019, in a mixed economic environment, Legrand delivered a solid integrated performance that was fully in line with its targets for the year and its value-creating medium-term business model.
Sales rose a total +10.4%, driven in particular by dynamic +2.6% organic growth and a sustained +5.3% increase in scope of consolidation, rounded out by a +2.2% exchange-rate effect.
Adjusted operating margin before acquisitions came to 20.4%. Taking acquisitions into account, adjusted operating margin was 20.0%, reflecting a +9.4% rise in adjusted operating profit. Net profit attributable to the Group and normalized free cash flow increased by +8.2% and by +13.0% respectively.
In addition, non-financial performance was ahead of schedule, with 113% achievement rate of Group’s CSR roadmap – reflecting its commitment to all stakeholders.
In keeping with its ambitions, in 2019, Legrand pursued initiatives aimed at strengthening its profitable growth profile and leading positions.
Against this backdrop, in June 2019, the Group reiterated its focused ambition as a strategic player in connected buildings through steady deployment of the Eliot program. Legrand sales of connected products have thus risen by +29% in total, including organic growth up a solid +10%. This performance reflects the very positive response to IoT products, plus the successful docking of Netatmo.
The Group also continued its bold innovation drive, launching a host of new products that included user interface ranges, digital solutions, cable management systems and energy distribution products.
As part of its ongoing strategy of value-creating acquisitions, Legrand also purchased three companies in 2019: Universal Electric Corporation, the undisputed US leader in busways for data centers; Jobo Smartech, the Chinese leader in connected hotel-room management systems; and Connectrac, an innovative US company specializing in over-floor power and data distribution. These bring to 10 the number of acquisitions that Legrand has made over the past two years, reinforcing the Group’s leading positions in growing areas.
Lastly, Legrand is actively pursuing initiatives aimed at improving its performance, including in particular roll-out of the Legrand Way program, digitalization of its organization, and optimization of its industrial footprint.
The Group’s 2019 achievements fully reflect the momentum that stems from its medium-term business model for value-creation.”
In 2020, Legrand will pursue its strategy of profitable and sustainable growth. Based on current macroeconomic projections, which are uncertain on the whole for 2020, and excluding any major changes in the economic environment, Legrand has set as targets, on the one hand organic evolution in sales in 2020 of between -1% and +3%, and on the other hand adjusted operating margin before acquisitions (at 2019 scope of operations) of between 19.6% and 20.4% of sales.
Legrand will also pursue its strategy of value-creating acquisitions and, subject to finalization of opportunities currently under discussion, intends to aim for a total increase of at least +4% in scope of consolidation on sales in 2020.
Legrand will moreover actively continue to deploy its demanding CSR roadmap for 2019-2021.
Tagged with financial results, Legrand