The following is a summary of the Legrand SA (LGRVF) Q1 2024 Earnings Call Transcript:
Financial Performance:
Legrand reported a decline in sales by 3.7% excluding exchange rates and Russia, with the building market making up 80% of sales experiencing slowdown across most geographies.
The adjusted operating margin was stable at 20.6% before acquisitions, shifting slightly to 20.5% after acquisitions.
Net profit was €266 million, comprising 13.6% of sales and free cash flow amounted to €146 million or 7.2% of sales for the quarter.
Legrand sustained a robust balance sheet, reported via a net debt-to-EBITDA ratio at quarter end of 1.2.
Business Progress:
Despite a sales decline, Legrand has confirmed its 2024 targets for low-single-digit sales growth, an adjusted operating margin before acquisitions of 20%-20.8%, and a minimum 100% achievement rate for its Corporate Social Responsibility (CSR) plan.
The company promises growth via acquisitions and product expansion across data centers, assisted living, and connected solutions, and commits to reduce greenhouse gas emissions by 90% by 2050.
Legrand is looking forward to growth in its data center business based on robust order intake, with plans for further investment into R&D to support this growth.
The company is also planning to expand its Legrand Care business to a €200 - €300 million business, emphasizing a focus on organic growth supported by a careful balance of pricing strategy and inflation.
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