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05.07.2020 07:302020 first-quarter release
Responsible mobilization to tackle the consequences of the health crisis
Performance showed good resistance in the first quarter of 2020
Organic change in sales: -7.3%
Adjusted operating margin before acquisitions1 : 18.7%
Solid balance sheet and financial position
Active protection of Legrand’s model in a highly deteriorated context
2020 outlook still uncertain
Determined measures to protect profitability and cash generation
Solid fundamentals for the future
Benoît Coquart, Legrand’s Chief Executive Officer, commented:
“Responsible mobilization to tackle the consequences of the health crisis
Faced with a global health crisis of unprecedented magnitude, Legrand mobilized very quickly to ensure the health and safety of employees – a priority – while respecting our commitments to all stakeholders.
In a spirit of solidarity and responsible action, the Group has also taken a number of initiatives, among them the priority supply of critical equipment to hospitals and other healthcare institutions, and support for local communities, including the creation of a fund dedicated to nursing homes for the elderly, such as EHPADs in France.
Legrand has also announced2 reductions in the remuneration of the Chief Executive Officer and the entire Executive Committee for the year as a whole.
Performance showed good resistance in the first quarter of 2020
In the first quarter of 2020, marked by a significant decline in business at the end of the period, Legrand reported:
- a -2.2% fall in sales, reflecting an organic decline (-7.3%) that was offset in large part by a sustained increase in the scope of consolidation (+4.8%) and a slightly positive currency effect (+0.7%), and
- an adjusted operating margin before acquisitions1 of 18.7%, one point lower than in the first quarter of 2019.
These trends reflect the good resistance of the Group’s performance, despite the deteriorated environment.
Given its solid balance sheet, Legrand also had substantial available cash at March 31, 2020, along with well controlled debt of long maturity, which together guarantee the Group’s ability to fully preserve its development model over the long term.
Active protection of Legrand’s model in a highly deteriorated context
The health crisis has triggered a sharp deterioration in the world economic outlook with a deep recession expected in 2020, leading Legrand to suspend its targets for the year3 on March 264. An organic fall in sales was confirmed in April 2020, which saw a retreat of -41% for the month. On this basis, Legrand anticipates a marked decline in sales in the second quarter of 2020. Subject to a favorable trend in the global health situation, the second half of the year should see a sequential improvement.
Against this backdrop, Legrand is resolutely deploying a series of measures designed to protect both profitability and cash generation.
The Group enjoys a balanced global presence across a variety of markets and verticals driven by numerous megatrends, and is also maintaining its focus on the fundamentals that underpin a business model built on profitable and sustainable development as it prepares for the future.
In a deteriorated and uncertain environment, Legrand can rely on the adaptability of its solid and proven model, and the unwavering support of its experienced and fully engaged teams.”
1 At 2019 scope of consolidation.
2 For more information, readers are invited to refer to the press release issued April 11, 2020.
3 Targets announced February 13, 2020, and defined as “excluding any major changes in the economic environment possibly linked to developments in the world health outlook”.
4 For more information, readers are invited to consult the press release issued March 26, 2020.
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