1st quarter 2011
Legrand fully in line with 2011 targets
Firm growth in sales, up 13.7%, and adjusted operating income, up 15.4%
Targeted acquisitions and innovation
Gilles Schnepp, Chairman and CEO of Legrand, comments:
Group sales for the first quarter of 2011 showed a total rise of 13.7% or 9.0% at constant scope of consolidation and exchange rates, reflecting:
- vigorous growth in new economies, where sales showed an overall rise of 26.6% (nearly 16% at constant scope of consolidation and exchange rates),
- firm expansion in new business segments (close to 17% growth in sales at constant scope of consolidation and exchange rates), including in particular digital infrastructures, energy performance and home systems.
Corrected for the particularly favorable base for year-on-year comparison in France and Italy in the first quarter of 2010 (see page 2 for details), organic growth in the first quarter of this year is fully in line with our full-year target of 5%.
Against a backdrop of steep rises in prices for raw materials and components, adjusted operating income was up 15.4% to represent 21.1% of sales. Allowing for the usual seasonality, this result is fully in line with the 2011 full-year target which calls for adjusted operating margin equaling or exceeding 20%, including the impact of acquisitions. It also confirms the structural nature of the level of profitability achieved in 2010.
With &D investments representing close to 5% of sales, the group is actively pursuing a strategy of innovation and new product launches (see page 3 for details):
- in core ranges, this makes for a steady flow of offerings to match needs in new economies and constantly enhance functionalities, esthetic appeal and ease of installation,
- in new business segments showing rapid growth driven by the technological and societal changes of recent years,
- in businesses with high potential in a longer-term perspective, including smart grids, charging stations for electric vehicles and assisted living.
As previously announced, Legrand is stepping up the pace of its development through self-financed, bolt-on acquisitions of small to medium-size businesses with strong market positions and high growth potential. Following the acquisitions of Inform in Turkey, Indo Asian Switchgear in India, and Meta System Energy in Italy during the second half of 2010, the group recently acquired SMS1 , number-one in Brazil for UPS, Electrorack, a US company specialized in VDI (Voice-Data-Image) cabinets, and Intervox, the market leader in connected security systems in France.
Legrand aims to continue building on this value creative momentum over the long term, with rigor, thus making the most of a still fragmented market offering a wealth of opportunities
1 Subject to the approval of competent authorities in Brazil