Legrand (LR) Q3 2024 earnings summary

Executive summary

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

• Seven acquisitions announced in 2024, including four in the datacenter segment, adding approximately €350 million in annual sales.

• Building markets remain in decline in most geographies, especially Europe and China, while India, the Middle East, and South America showed growth.

• Financial indicators remain solid, with adjusted operating margin at 20.5% and net profit at €834 million (13.4% of sales), despite challenging market conditions.

• Free cash flow was €749 million (12% of sales), down 38.3% year-over-year due to higher working capital needs.

Financial highlights

• Gross margin for nine months was 52%, historically high and flat year-over-year.

• Adjusted operating profit for 9M 2024 was €1,276 million (20.5% margin), down 6.4% year-over-year.

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

• Net debt to EBITDA ratio at 1.7 at period end, with net financial debt at €3.2 billion.

• Free cash flow as a percentage of sales was 12.0%, down from 19.2% in 2023.

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.

• M&A pipeline remains active, with €5 billion earmarked for acquisitions through 2030.