During the first 9 months of 2022, Legrand’s turnover increased by 19.1% compared to the same period in 2021, reaching 6,154 ME.
Organic sales growth was +10.1% during the period, with +9.7% in mature countries and +11.3% in new economies. Despite exogenous constraints linked in particular to supply shortages, in particular of electronic components, and to an unfavorable geopolitical context, the organic growth in sales during the first nine months reflects Legrand’s strong commercial drive (numerous commercial successes and pricing power), as well as very active ‘supply chain’ management.
The scope effect related to acquisitions is +2.4%. Based on the acquisitions made and their probable dates of consolidation, this effect would be approximately +3% in a full year.
The impact of the exchange rate effect in the first nine months of the year is +5.6%. Based on average exchange rates for the month of October 2022 alone, the annual currency effect on revenue would be almost +6% in 2022.
During the first 9 months of the year, the adjusted operating profit amounted to 1,240 FC, an increase of +12.1% compared to the same period of 2021. Therefore, the adjusted operating margin reached 20.2% of the sales during the first nine months.
Before acquisitions (scoped 2021), adjusted operating margin reached 20.4% of sales for the first 9 months of 2022, -1.0 point below the level of the first nine months of 2021.
In a context of persistent high inflation (including an increase of approximately +15% in raw materials and components during the first nine months, with more than +11% in the third quarter alone), the maintenance of high profitability reflects a solid control costs and selling prices.
The group’s share of net income increased by +16.1% compared to the first nine months of 2021, standing at 812 ME. The increase of +113 ME is mainly due to:
– operating profit growth (+123 ME);
– the favorable evolution (+€12M) of financial income and foreign exchange; Y
– the increase in the amount of corporate tax (-22 ME).
At 1,156 ME, gross cash flow represents 18.8% of sales for the first nine months of 2022, a decrease of -0.9 points compared to the same period of 2021.
At 16.3% of sales during the first nine months, normalized free cash flow increased +16.4% compared to the first nine months of 2021.
Free cash flow represents 10% of sales for the period, highlighting the economic maintenance of the reinforced inventory coverage, which reflects the priority given to customer service.
The net debt to EBITDA ratio stands at 1.5 as of September 30, 2022.
Continuation of external growth dynamics: Two new acquisitions in buoyant segments
Following the acquisitions of Emos, Usystems and Voltadis since the beginning of the year, Legrand continues its “bolt-on 5” acquisition drive and announces two new external growth operations:
– A. & H. Meyer, German leader in connector solutions for office furniture (power in furniture). Headquartered in Dörentrup in Germany, A. & H. Meyer has almost 200 employees and achieves annual sales of more than 20 ME; Y
– Power Control, British specialist in UPS (equipment, services and maintenance). Headquartered in Sheffield in the UK, Power Control achieves an annual turnover of approximately 15 ME and has over 70 employees.
Legrand is thus increasing its global presence in segments driven by strong structural trends (high energy efficiency infrastructure and solutions that respond to changes in working methods), and raising the total annual sales of the acquired companies in 2022 to almost 145 ME.
2022 Annual Results: February 9, 2023
Beginning of the “calm period” on January 10, 2023
First Quarter 2023 Results: May 4, 2023
Beginning of the “calm period” on April 4, 2023
General Meeting of Shareholders: May 31, 2023.
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