Legrand SA (LGRDY) Full Year 2024 Earnings Call Highlights: Strong Data Center Growth and Resilience in Challenging Markets

Legrand SA (LGRDY), a global specialist in electrical and digital building infrastructure, reported robust sales growth and maintained strong margins in its full-year 2024 earnings call. Despite challenging market conditions, particularly in Europe, the company demonstrated resilience and growth, driven by acquisitions and expansion in the data center segment.



Strong Data Center Growth

Legrand's data center segment in the US showed significant growth, with sales increasing by approximately 20% in the third quarter. This growth offset weaker traditional business and contributed to the company's overall sales growth. The company's commitment to the data center segment aligns with its strategic roadmap for 2030, which emphasizes accelerating sales growth in both traditional products and new solutions supporting the energy and digital transition.



Resilience in Challenging Markets

Legrand maintained a solid adjusted operating margin of 20.5% after acquisitions in 2024, despite a generally depressed building market in most of its geographies. The company's resilience can be attributed to several factors:

1. Acquisitions and Diversification: Legrand has actively pursued acquisitions to expand its product offerings and enter new markets. In 2024, the company announced nine acquisitions, adding around EUR350 million in annual sales. These acquisitions have helped Legrand diversify its revenue streams and offset weak performance in certain regions.
2. Dynamic Innovation: Legrand has maintained a steady stream of new product launches, which has helped drive sales and customer satisfaction. This innovation strategy has been a key factor in the company's growth and resilience.
3. Cost Optimization: Legrand has implemented strategic initiatives to optimize its cost structure, including digitalization and production capacity improvements. These efforts have helped the company maintain strong margins even in the face of challenging market conditions.

Looking Ahead

In 2025, Legrand aims to accelerate growth, with sales growth targets of between +6% and +10% (organic and acquisitions, excluding currency effects). The company is confident in its model for creating integrated value and has set an adjusted operating margin target of holding stable overall, compared with 2024. Legrand is also committed to achieving at least a 100% CSR achievement rate for the first year of the 2025-2027 roadmap.

In conclusion, Legrand's strong data center growth and resilience in challenging markets demonstrate the company's ability to adapt and thrive in dynamic market conditions. With a focus on acquisitions, innovation, and cost optimization, Legrand is well-positioned to achieve its growth targets and maintain its strong financial performance.