- Change in sales: -7.9%
- Adjusted operating margin: 19.0%
- Free cash flow: 16.9% of sales
- Achievement rate of CSR roadmap: 128%
- 3 new acquisitions announced
- Total of 4 new companies acquired in 2020
- Ongoing active roll-out of product offerings of recently acquired companies
- Enhanced growth model profiled for the post-crisis period
- Diversified positions in promising segments
- Product offering well-suited to meet emerging new needs
- Scope for lasting high-quality growth through acquisitions
- Acceleration of digitization
- A pace-setting ESG policy
- Mid-term outlook driving value creation
LIMOGES, France--(BUSINESS WIRE)--February 11, 2021--
Regulatory News:
On the closing of full-year accounts for 2020, Benoît Coquart, Legrand’s (Paris:LR) Chief Executive Officer, commented:
“Facing an unprecedented and highly unpredictable environment, 2020 was a demonstration of Legrand’s clear strategy, solid business model, and highly responsive teams.
As the crisis began, our Group moved quickly to address the essentials: protecting employees and partners while continuing to serve our customers, whose businesses are essential to a working economy.
We then sought to limit the pandemic’s impact on our own performance: the full-year decline in sales was held to -7.9% in 2020, while we strengthened competitive positions in our main markets. Adjusted operating profit and net profit remained at excellent levels, respectively at 19% of sales (20% excluding exceptional items) and at 11% of sales. Free cash flow stood at over EUR1 billion for the second year running and amounted to 17% of sales.
Legrand also focused on pursuing and ramping up its Environmental, Societal and Governance (ESG) strategy. We achieved 128% of our CSR roadmap targets(1) for the year, with very strong performances in a number of areas: CO(2) emissions were down -17% from 2019 at constant scope of consolidation, in line with the carbon-neutral targets for 2022, 2030 and 2050 announced in July.(2)
Throughout the year, Legrand worked hard to strengthen its fundamentals in preparation for a recovery. We stepped up our sales and marketing initiatives, and continued to focus on developing new products — in particular connected solutions — with R&D expenditure equal to over 5% of sales. We bolstered our market positions with four targeted acquisitions, including three announced today; we accelerated digitization of our structures and processes; and we pursued talent development and diversity promotion programs.
These unique fundamentals, combined with a market structurally driven by favorable underlying trends in energy efficiency, safety, new ways of living and working, connected buildings, comfort, health and assisted living, mean that we are confident in the future. They also lead us to stand by our goal of profitable, sustainable and responsible growth serving our corporate purpose: improving lives by transforming the spaces where people live, work and meet.”
Proposed dividend
Legrand’s Board of Directors will ask the General Meeting of shareholders, to be held on May 26, 2021, to approve the payment of a dividend of EUR1.42 per share in respect of 2020 (compared with EUR1.34 in respect of 2019).
This would place the payout ratio at 56%, in line with the Group’s practice of offering an average rate of around 50%.
The ex-dividend date is May 28, 2021 with payment(3) on June 1, 2021.
2021 targets
In 2021, Legrand will pursue its strategy of profitable, sustainable and responsible growth.
Based on current macroeconomic projections, which are still very uncertain, and assuming a gradual improvement in the world health situation, Legrand has set the following targets for 2021:
– organic growth in sales of between +1% et +6%;
– total impact of the broader scope of consolidation on sales of at least +3%;
– adjusted operating margin before acquisitions (at 2020 scope of consolidation) of between 19.2% and 20.2% of sales;
– achievement rate of 2021 targets in CSR roadmap of at least 100%.
Responsible crisis management
In 2020, amid an unprecedented and particularly unpredictable health and economic crisis, Legrand leveraged the unique strengths of its proactive, solid and balanced business model.
From the beginning of the crisis, the Group has focused on taking a responsible approach to all of its stakeholders by:
– mobilizing to implement immediate measures to protect the health and safety of its employees and partners, through strict application of best health practices, awareness-raising campaigns, and the deployment of dedicated training programs;
– maintaining services to customers whose own operations are essential to keeping the economy going (almost all logistics centers kept open; operational customer support; and early reopening of production plants as of April);
– multiplying solidarity initiatives offering support to communities in countries where Legrand operates (supplies for medical structures, protective kits, food supplies, and, in France, the creation of a solidarity fund for more than 200 medical facilities for seniors);
– reducing the target value of the CEO’s total annual compensation for 2020 by -25% from 2019, and freezing compensation paid to the Board of Directors.
Legrand also stepped up one-off and structural initiatives to strengthen the pillars that underpin its medium- and long-term growth, including:
– a host of sales and marketing initiatives to launch product offerings and grow its market share;
– swifter digitization throughout the whole Group;
– quick, targeted adjustments to its cost base;
– a sustained drive for innovation, linked to a series of new-product launches and safeguarded R&D capacities;
– finalization of four acquisitions, with successful docking of recently acquired companies and an ongoing effort to pursue additional opportunities;
– deployment of the Group’s CSR roadmap, and stepped-up environmental, social and governance commitments (new carbon-neutrality targets for 2022, 2030 and 2050(4) , campaigns to promote workplace diversity, and the appointment of an independent Chairwoman).
Key figures
Consolidated data
(EUR millions)(1) 2019 2020 Change
------------------------------- ------- ---------------------------- ------
Sales 6,622.3 6,099.5 -7.9%
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Adjusted operating profit 1,326.1 1,156.0 -12.8%
As % of sales 20.0% 19.0%
19.1% before acquisitions(2)
Operating profit 1,237.4 1,065.4 -13.9%
As % of sales 18.7% 17.5%
------------------------------- ------- ---------------------------- ------
Net profit attributable to the
Group 834.8 681.2 -18.4%
As % of sales 12.6% 11.2%
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Normalized free cash flow 1,009.8 1,034.2 +2.4%
As % of sales 15.2% 17.0%
Free cash flow 1,044.3 1,029.1 -1.5%
As % of sales 15.8% 16.9%
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Net financial debt at December
31 2,480.7 2,602.8 +4.9%
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1. See appendices to this press release for definitions and indicators
reconciliation tables.
2. At 2019 scope of consolidation.
Consolidated sales
Full-year 2020 sales totaled EUR6,099.5 million, down -7.9% from 2019.
The change in sales at constant scope of consolidation and exchange rates was -8.7%, with declines in both mature countries (-8.5%) and new economies (-9.4%).
The impact of the broader scope of consolidation came to +3.6% in 2020. Based on acquisitions completed in 2020 and their likely dates of consolidation, this would reach +2.5% in 2021.
The exchange-rate effect on sales was negative at -2.6% in 2020. Based on average exchange rates in January 2021, the full-year exchange-rate effect on sales for 2021 should be around -3.5%.
Changes in sales by destination at constant scope of consolidation and exchange rates broke down as follows by region:
4(th) quarter 2020 / 4(th) quarter
2020 / 2019 2019
Europe -7.9% -0.7%
North and Central America -8.7% -10.6%
Rest of the world -10.3% -2.8%
Total -8.7% -5.1%
These changes at constant scope of consolidation and exchange rates are analyzed below by geographical region:
– Europe (39.3% of Group sales): sales in Europe declined -7.9% at constant scope of consolidation and exchange rates in 2020.
Europe’s mature countries (33.3% of Group sales) registered a -9.7% decline in sales from 2019. This trend was mainly driven by the worsening health and economic environment, particularly marked in the second quarter (-31.8%) and steady destocking by distributors.
In the fourth quarter alone, sales were almost stable (+0.4%), recording in particular good showings in France and in Germany over the quarter.
Despite the health crisis, full-year 2020 sales in Europe’s new economies showed a solid organic rise of +1.9% that included double-digit growth in Turkey and a very limited retreat in Eastern Europe.