Legrand (OTCPK: LGRDY) reported results for the first half of fiscal year 2023, with an increase in sales for the H1 of +4.9% to $4.5B (EUR 4.1B). The revenue increase comprised +4.6% organic growth, +1.8% growth from acquisitions, -1.0% FX effect, and -0.5% tied to the company’s disengagement from Russia. Adjusted operating profit for H1 FY2023 came in at 22.2% of sales, up from 20.5% in H1 FY2022. H1 FY2023 earnings per share increased by +19% and free cash flow was robust at $895M (EUR 814M). The company’s Q2 revenue was up 1.2% over the prior year Q2 at $2.36B (EUR 2.15).
CEO Benoit Coquet opened his H1 FY2023 earnings call comments noting Legrand’s very solid results in spite of a contracting market, with revenue in Europe up +6.8%, while the US revenue was down -0.3%. CEO Coquart commented that while Q2 was softer than Q1, Legrand remains confident for the full year, noting that building markets that were down in H1 were not expected to deteriorate further in H2.
Legrand announced today its third acquisition for this fiscal year: a bolt-on acquisition of Santiago, Chile-based TEKNICA, a specialist in datacenter and infrastructure solutions, with annual sales of approximately $49.5M (EUR 45M). CEO Coquet commented during the analysts’ Q&A that the company is still very active in M&A in the US, looking at bolt-on acquisitions to reduce Legrand’s dependence on the office market. Legrand also announced the consolidation of five distribution centers into a single new one in the US, and a new manufacturing plant in Moterrey, MX.
CEO Coquet also noted during his earnings call responses that Legrand spent $33M (EUR 30M) in H1 on restructuring, which is the typical full-year spend on restructuring; he noted they will continue to look for more restructuring opportunities in the second half of FY2023 (expect H1 restructuring to be anywhere from $13-$33M [EUR 10-30M]).
A reminder – 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).
| H1 FY2023
by Geographic Region |
Europe | North & Central America | Rest of the World | Total
H1 FY2023 |
| Total Net Sales | $2.11B
(EUR 1.91B) |
$1.83B
(EUR 1.67B) |
$785M
(EUR 714M) |
$4.72B
(EUR 4.29B) |
| % Legrand Group Consolidated |
42.7% |
38.1% |
19.2% |
100% |
| Organic Sales Growth H1FY23 vs H1FY22 |
+6.8% |
+0.4% |
+8.2% |
4.6% |
| Notes from H1 FY2023 Earnings Release Presentation | Mature countries (36.4% of Group, up +5.1%) Strong increases in Italy, Spain & Germany
-France, UK, Netherlands resilient -Scandinavia down New Economies up +19% -Strong growth, notably in Turkey |
US (34.6% of Group, down -0.3%)
-building markets down -double-digit fall in residential, slight retreat in non-residential -double-digit growth in datacenters
Mexico & Canada -sharp rise in Canada -stable sales in MX |
Asia-Pacific (12.6% of Group, up +9.3%)
-India, very sustained growth -China, moderate growth
Africa-Middle East (3.6% of group, up +14.6%)
South America (3.0% of Group, down -3.0%) -degraded economic conditions, particularly in Brazil |
Legrand announced an upwardly adjusted guidance on revenue for the full fiscal year 2023:
- Sales growth between +5% and +8% (versus +2% and +6% previously)
- Adjusted operating margin around 20.5% of sales (versus around 20% initially)
- 100% CSR achievement for the second year of Legrand’s 2022-2024 roadmap
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