There is good news and bad news from Legrand’s (Paris: LGRVF) latest report for the first nine months of 2020. The good news is that residential sales are strong, particularly in user interfaces and AV infrastructure solutions in the U.S. The bad news is that overall worldwide sales were driven down for the year due to weakness in the commercial market and particular foreign markets.
Overall, Legrand SA reported a drop in revenues of 8.1% to €4.493 billion, down from €4.888 billion for the first nine months of 2019. Net profit also fell to €493 million, down 21.1% from €625 million in 2019’s first nine months. U.S. sales fell 6.8%. Overall, North and South American sales account for 42% of Legrand’s total revenues. Legrand’s brands include OnQ, Nuvo, Luxul, Middle Atlantic, Chief, Sanus, Q-Motion, Da-Lite and Vantage.
Luxul, Modpower are Bright Spots for Legrand in 2020
Benoît Coquart, Legrand’s Chief Executive Officer, says Q3 of 2020 was solid.
“Over the third quarter, in a persistently degraded context and thanks to our teams’ full mobilization, many commercial initiatives, and efficient adaptation measures, Legrand recorded – compared with the third quarter of 2019 – good showings, with stable organic growth, an adjusted operating margin before acquisitions of 21.6% of sales, up +1.4 points, and free cash flow increasing a steep +22%,” he notes.
He continues, “Since the beginning of the year, Legrand has actively pursued its initiatives, in particular structural ones, to preserve and sustain its growth model.The Group has thus adapted its cost base and structure while continuing a sustained innovation effort, in particular through the Eliot program, with 5% of sales dedicated to R&D. Legrand has also pursued its very dynamic program for the launch of innovative products. These include products designed to improve energy efficiency, connectivity, safety and comfort in buildings, along with offers aimed specifically at data centers, the office of tomorrow, remote working, and healthcare buildings.”
He pointed in particular to wins from Luxul products for enhancing residential digital networks (Epic Mesh and PoE6 switches), plus the company’s Modpower modular power solutions for offices in North American markets. He also cited the Nuvo’s P5000 Pro-Series home audio systems, and the growth in Legrand user interface deployments to more than 41 countries.
For Q4, Legrand is anticipating an organic decrease in sales due to the pandemic. The company says it is confident in its ability to keep developing its market share and will continue to actively protect its adjusted operating margin.