Legrand Sales Up 9% for First Half of 2017
Legrand reports 2.4% organic sales growth in U.S. after spending $950 million for acquisition of Milestone AV Technologies to bolster its brand positions.
“Ongoing growth acceleration” are the three words Legrand SA (LGRVF) used to describe its sales performance for the first six months of 2017.
The French company reported total sales up 9.1 percent to 2.67 billion Euro, driven by organic growth of 3.2 percent and external growth of 4.1 percent.
Organic growth in sales was sustained with good performances recorded in mature countries as well as new economies. The company also made five acquisitions in that time frame, including its recent buyout of Milestone AV Technologies, which includes the brands of Chief, Sanus and Da-Lite.
On the profit side, Legrand reported a 10.9 percent gain in adjusted operating profit to $546 million Euro, 11.5 percent growth in net profit, and 19.1 percent growth in cash flow to 227 million Euro.
Adjusted operating margin before acquisitions is 20.6 percent of sales compared with 20.1 percent in the first half of 2016, or an increase of 0.5 percent.
Related: Why is Legrand acquiring Milestone AV?
North and Central America sales account for 29.6 percent of total sales. In total, sales were up 2.8 percent. In the United States alone, and thanks in particular to good performance in home systems and user interfaces, organic growth stood at 2.4 percent (and at 8.0 percent over two years from the first half of 2015).
Legrand calls Milestone AV Technologies LLC “a frontrunner in audio-video infrastructure and power,” adding, “Milestone’s solid positions – over 75 percent of sales are made with leading positions – round out Legrand’s existing positions under the Middle Atlantic Products brand. Generating mid-term synergies in sales as well as short- and mid-term synergies in costs, this acquisition was made for an enterprise value of $950 million net of a discounted tax benefit of $250 million, and at conditions that meet all of the Group’s financial criteria.”
Milestone is based in Eden Prairie (Minnesota) and reported sales of $464 million in 2016 and has around 1,000 employees.
