French electrical equipment maker Legrand announced on Thursday that it had approached €1 billion in net profit in 2022, up 10.5%, thanks in particular to growing needs for decarbonisation and electrification.
The group based in Limoges, in the center of France, generated 999.5 million euros of net profit, for a turnover of 8,340 million (+19.2%), rising in all its markets, and shows its “confidence” looking ahead despite uncertainties, according to a press release.
In a context of crisis and rising energy prices, energy efficiency equipment is especially dynamic, especially in Europe: thermostats, equipment to reduce consumption, etc.
Seven acquisitions in one year
Legrand is also benefiting from its external growth, with seven acquisitions in a year, including two announced Thursday: Encelium, a US player in lighting for commercial buildings, and Clamper, a Brazilian leader in low-voltage solutions, particularly for photovoltaic infrastructure.
Its 2022 results, however, already reflect a depreciation of 148 million euros in assets, linked to its separation from Russia, which invaded Ukraine in February 2022.
These activities in Russia, where Legrand had four factories employing 1,100 people, represented around 1.5% of its sales in 2022. The group is still examining its options for the transfer of activities announced in January.
Expected growth between 2% and 6% by 2023
Looking ahead, taking into account the current macroeconomic outlook and excluding the impacts related to the Russian withdrawal, Legrand is targeting revenue growth in 2023, excluding currency effects, of between 2% and 6% ( with a range effect of about +3%).
He expects an adjusted operating margin before acquisitions (and excluding Russia and related impacts) of around 20% of sales.
And to add: “The war in Ukraine has weighed on business in Russia, and probably on the morale of European households. And, in some countries, we have seen difficult economic situations, like in China with Covid-0, which has not helped supply chains.”
Regarding energy, Legrand suffered a price increase of around 50%. However, this item represents 0.6% of billing, compared to the previous 0.5%, points out the manager, who also mentioned the group’s energy consumption reduction plan, whose rate he wants to double between 2021 and 2023 (from 8 to 15%).
Source: BFM TV
