Legrand – Analysis of Q1 FY2023 Results: Global sales growth at +9% with U.S. sales growth only +2.8%

Legrand (OTCPK: LGRDY) reported results for Q1 fiscal year 2023, with an increase in sales for the first fiscal quarter of +9.0% to $2.34B (EUR 2.15B) – with +7.4% organic growth, +1.3% growth from acquisitions, flat FX effect, and -0.4% tied to the company’s disengagement from Russia.  Adjusted operating profit for Q1 FY2023 came in at 22.2% of sales, up from 20.2% in Q1 FY2022. Legrand credits its high profitability of the first quarter to “a firm control of expenses and sales prices in a persistently inflationary environment.”

Q1 FY2023 also drove higher net profit at $360M (EUR 330.5M), up +28% compared to the first quarter of FY2022 and net earnings per share (EPS)  up +28.1% at $1.35 (EUR 1.24).  Cash flow (both free cash flow and normalized free cash flow) improved in Q1 FY2023.  Legrand’s net debt leverage ratio (debt outstanding divided by adjusted EBITDA for the past 12-month period), improved to 1.2x in Q1 FY2023, compared with a ratio of 1.6x at the end of Q1 FY2022.  The net debt-to-EBITDA ratio is a measure of a company’s financial leverage and its ability to pay off its debt.

Legrand does not break out lighting brands separately.  The lighting businesses are reported within the geographical summary (see below).  In the North & Central American region it also includes A/V, data communications, critical power & infrastructure, networking, shading systems, wire & cable management and wiring devices.  Legrand’s North & Central American lighting and controls brands include Finelite, Focal Point, Indigo-Clean, Kennall, OCL, and Pinnacle, as well as lighting controls & systems brands Adorne, Radiant, Vantage, Wattstopper, and Encelium (acquired in 2022).

Reporting sales by geographies, all three of Legrand’s regions showed growth, with the North & Central America region trailing the other two regions (Europe and “Rest of the World”) in spite of being the only region with a positive currency effect of +4.7%.  The U.S. represented 34.3% of total group sales in Q1 FY2023, with growth at +2.8%.   CEO Benoit Coquart commented that all three regions achieved a solid level of growth despite residential market weakness, adding “we saw a very robust growth in our faster expanding segments, i.e. energy efficiency offering, data centers and connected products.”

Q1 FY2023

by Geographic Region

Europe North & Central America Rest of the World Total

Q1 FY2023

Total Net Sales $1.07B

(EUR 978M)


(EUR  829M)


(EUR 342M)


(EUR 2.15B)

% Legrand Group Consolidated  








Organic Sales Growth Q1FY23 vs Q1FY22  








Notes from Q1 FY2023 Earnings Release Presentation Double-digit gains in mature countries (Italy, Spain, Germany, UK) and strong rise in new economies (+24% growth, including Turkey) Overall stagnant market.  Double-digit decline in residential and surge in datacenters and slight rise in non-residential.

Sharp sales rise in MX and Canada


Asia-Pacific (12% of Group) growth of +9.7% including significant rise in India and slight rise in China. Africa-Middle East(3.4% of Group) growth of +12.5%. South America (3.2% of Group), decline of -2.7% in sales

During the earnings call Q&A, CEO Coquart provided additional color on the North American business, describing the three pieces of Legrand’s business there as: 1) residential, 2) data centers, and 3) non-residential. Residential, about 20% of Legrand’s North American sales, is down by double digits, but is expected to recover in the coming quarters.  Data centers, 25% of Legrand’s U.S. sales, are up double digits. Non-residential, 55% of Legrand’s U.S. sales, is up slightly and expected to be an area of growth – although CEO Coquart noted Legrand’s market positioning, product families is not aligned with the fastest growth areas of non-residential in the US (warehousing, facilities, big cities).  He also noted in the Q&A that Legrand’s lighting business in the U.S. is entirely non-residential: “we are not selling any lighting in residential nor in data centers.”

Looking ahead to the remaining three quarters of FY2023, Legrand confirmed their previous 2023 full-year targets:  

  • sales growth between +2% and +6%
  • adjusted operating margin before acquisitions remains at “around” 20% of sales
  • 100% CSR achievement (corporate social responsibility targets in 2022-2024 roadmap)

A proposed dividend of $2.07 (EUR 1.90), up +15% over the prior fiscal year, will be up for approval at Legrand’s General Meeting of Shareholders on May 31, 2023.

Go Deeper

Legrand Q1 + FY2023 Press Release: https://www.legrandgroup.com/sites/default/files/Documents_PDF_Legrand/Finance/2023/3m/Legrand_Press_Release_Results_Q12023_1683104572.pdf

Legrand Q1 FY2023 Earnings Slide Presentation: https://www.legrandgroup.com/sites/default/files/Documents_PDF_Legrand/Finance/2023/3m/Legrand_Slideshow_EN_Q12023_1683117455.pdf