Legrand’s financial results for the first nine months of 2016:
Solid results in the first nine months of 2016
- Healthy total growth in sales: +4.1% (including +2.1% organic growth)
- Rise in adjusted operating profit: +5.7% (adjusted operating margin before acquisitions: 20.2%)
Ongoing Group development
- Deployment of the Eliot program: success of connected offers and launch of Eliot in North America
- Active external growth: eight acquisitions made since the beginning of the year
2016 targets updated
- Organic change in sales: 0% to +2% (compared with an initial target of -2% to +2%)
- Adjusted operating margin before acquisitions: 19.3% to 19.6% (compared with an initial target of 18.5% to 19.5%)
Solid results in the first nine months of 2016
Gilles Schnepp, Chairman and CEO of Legrand, commented:
“Legrand sales in the first nine months of 2016 were up +4.1% in total, or nearly +7% excluding the exchange-rate effect.
“Organic growth in Group sales was solid at +2.1%, with a very good performance in the United States (+7.0%) and rising sales in mature countries in Europe (+1.8%) more than offsetting a slight retreat in new economies (-0.6%) where some countries face unfavorable economic conditions.
“The broader scope of consolidation resulting from acquisitions was healthy at +4.6%, reflecting the good momentum of this growth driver.
“Adjusted operating profit rose +5.7% and adjusted operating margin before acquisitions (at 2015 scope of consolidation) stood at 20.2% of sales compared with 19.7% in the first nine months of 2015, i.e. a 0.5-point rise. Taking acquisitions into account, adjusted operating margin came to 20.0% for the first nine months of 2016.
“Net income excluding minority interests rose +2.3% to more than [$464m], or 11.5% of sales.
“Free cash flow generation was solid, with normalized free cash flow at 13.0% of sales over the same period, allowing Legrand to continue to self-finance its development over the long term.
“This good overall performance reflects the commitment and operational efficiency of Legrand’s teams.”
Ongoing Group development
Schnepp continued, “In connected products, Legrand has actively continued to deploy the Eliot program in 2016. Benefiting from the success in France and Italy of its new connected ranges, such as the Class 300X door entry system and the MyHome Play user interface offer, the Group thus today announced Eliot’s launch in North America. Moreover, after taking part in CES Unveiled Paris, Legrand is scheduled to take part— for the third year running—in CES Las Vegas, where the Group will present its latest innovations.
“External growth is also healthy, with eight targeted acquisitions since the beginning of the year totaling annual acquired sales of over [$185.19m], of which 80% with products that are no. 1 or 2 in their markets. For 2016 as a whole, the broader scope of consolidation should contribute over +4% to growth in consolidated sales. Legrand thus continues to actively enhance and expand its market positions.”
The full report can be viewed here.
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