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(AOF) – Legrand lost 0.24% to 104 euros in a Parisian market that was rising sharply while its investor day was held this Tuesday in London. The specialist in electrical and digital building infrastructures presented its 2030 ambitions, and bet on the acceleration of its “profitable and responsible growth” with a 2030 turnover of between 12 and 15 billion euros. The group is counting on an average annual growth in sales excluding exchange rate effects of between 6% and 10%, including an increase of 3% to 5% organically and 3% to 5% linked to acquisitions.
Average adjusted operating margin is anticipated to be approximately 20% of revenue, including 30 to 50 basis points of annual organic improvement and 30 to 50 basis points of annual dilution from acquisitions.
“Legrand has maintained its adjusted operating margin target unchanged at around 20% (expectations were at least 21% with an adjusted operating margin already at 20.9% for fiscal 2025),” said Jefferies, which maintains its “Hold” recommendation on the file.
“The argument for buying Legrand is that it is difficult to justify holding construction-related industrial stocks with high exposure to offices in a falling interest rate cycle,” the broker adds.
Furthermore, Legrand is counting on generating free cash flow of nearly €10 billion over the period 2025-2030, with free cash flow averaging between 13% and 15% of sales. The company is also counting on an average investment-to-sales ratio of between 3% and 3.5%, and an average working capital requirement ratio of less than or equal to 10% of sales.
Its capital allocation policy gives priority to acquisitions (at least 50% of free cash flow on average) and to the payment of an attractive dividend (with a distribution ratio of around 50%). Over the period, approximately 5 billion euros will be dedicated to the acquisitions of companies that complement the group’s product and geographic network.
Finally, Legrand is targeting the achievement of 80% eco-responsible sales and a reduction in Scopes 1, 2 and 3 emissions in line with the Net Zero 2050 commitment.
Legrand will announce its results for the first nine months of 2024 on November 7.
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