Legrand SA (LGRDY) Q1 2025 Earnings Call Highlights: Strong Sales Growth and Strategic ...
Sales Growth: 11.2% increase excluding FX, with 7.6% organic growth and 3.3% from acquisitions.
FX Impact: Positive 1% impact on the quarter.
Geographical Sales Performance: North and Central America sales up 18.7%, Europe sales down 0.3%, Rest of the World sales up 4.8%.
Adjusted Operating Margin: 20.7% in Q1 2025.
Net Profit: EUR293 million, representing 12.9% of sales.
Free Cash Flow: EUR188 million, 8.3% of sales.
Net Debt-to-EBITDA Ratio: 1.5 at the end of the quarter.
Acquisitions: Two acquisitions totaling EUR50 million in connected healthcare and data centers.
Proposed Dividend: EUR2.2 per share, up 5% from last year.
Release Date: May 07, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Legrand SA (LGRDY) reported strong sales growth in Q1 2025, with an 11.2% increase excluding FX, driven by a 7.6% organic growth and a 3.3% positive impact from acquisitions.
The company achieved a solid adjusted operating margin of 20.7% in Q1 2025, demonstrating strong operational leverage.
Legrand SA (LGRDY) confirmed its full-year targets, projecting sales growth between 6% and 10% organically and through acquisitions.
The data center segment showed outstanding performance, with growth exceeding 40%, and is expected to continue strong growth throughout 2025.
Legrand SA (LGRDY) announced two acquisitions in Q1 2025, totaling EUR50 million in acquired 12-month sales, enhancing its leadership in connected healthcare and data centers.
Negative Points
Sales in Europe were almost flat, with a slight decline of 0.3% organically, due to a sluggish building market.
The rest of the world saw mixed results, with sales growth in India and the Middle East offset by declines in China and Brazil.
The company faces challenges from US tariffs, with a significant portion of its US COGS being imported, leading to potential cost increases.
Legrand SA (LGRDY) anticipates a negative impact on financial results due to rising corporate income tax and financial expenses.
The building market in North America, excluding data centers, remains slightly down, with no recovery seen yet in the residential or office markets.
Q & A Highlights
Q: Can you provide more details on the growth in North America, particularly in the data center segment? A: Benoit Coquart, CEO, stated that the growth rate of data centers in the US and at the group level was higher than 40%. The data center segment experienced fantastic growth, and this trend is expected to continue due to a strong order book. However, the non-data center business was slightly down, both in North America and globally.
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