Legrand (LR) Q3 2024 earnings summary

Executive summary

• Net sales for the first nine months of 2024 reached €6,229 million, down 1.2% year-over-year, with Q3 sales up 2.4% driven by acquisitions and strong data center demand in the US; organic sales declined 0.8%.

• Seven acquisitions announced in 2024, including four in the data center segment, adding approximately €350 million in annual revenue and supporting digital growth.

• Adjusted operating margin stood at 20.5% of sales, reflecting resilience despite lower sales and challenging building markets.

• Net profit attributable to the Group was €834 million, representing 13.4% of sales, impacted by lower operating profit and negative FX.

• Free cash flow was €749 million, or 12% of sales, with a significant decrease due to higher working capital needs.

Financial highlights

• Gross profit for 9M 2024 was €3,246 million (52.1% of sales), historically high but down 1.7% year-over-year.

• Adjusted operating profit declined 6.4% to €1,276 million (20.5% margin).

• Operating profit was €1,190 million (19.1% margin), down from €1,274 million (20.2%) in 9M 2023.

• Free cash flow dropped 38.3% year-over-year, mainly due to increased working capital.

• Net debt to EBITDA ratio at 1.7x, with €3.2 billion net debt and 90% of gross debt at fixed rates.

Outlook and guidance

• 2024 full-year targets: low single-digit sales growth (organic and through acquisitions), adjusted operating margin after acquisitions between 20.0% and 20.4%.

• 2030 ambitions: sales of €12–15 billion, 6–10% CAGR, ~20% adjusted EBIT margin, and €10 billion free cash flow from 2025–2030.

• At least 100% CSR achievement rate for 2024, final year of the 2022–2024 roadmap.

• Data center demand expected to remain strong in coming quarters.

• No short-term recovery expected in European or Chinese construction markets; US non-residential market stable but not improving.