Legrand resists, with 2023 results on the rise despite the building crisis

The French group crossed the billion euro profit mark, at 1,15 billion euros, up 14,9%, for a turnover of 8,416 billion (+0,9%).

This last figure, driven by flagship products as well as acquisitions, is slightly below the expectations of Bloomberg analysts.

Excluding currency effects and the impact of a disengagement from Russia, this sales growth is +4,7%, according to the group.

“In a building market down over the year, Legrand's 2023 financial and extra-financial results are very satisfactory, and once again demonstrate the robustness of our growth model,” commented Managing Director Benoît Coquart .

In 2023, Legrand has made five acquisitions, including that of MSS, a New Zealand cable routing specialist, announced on Thursday.

To establish its profitability, the group explains that it relies on innovation, “cost control”, prices, and targeted investments.

In its major markets, Legrand saw its sales grow by 6% in Europe, at constant exchange rates and structure. On the other hand, they are down 2% in North and Central America, particularly in the United States where they are falling in residential, tertiary buildings and commercial spaces, markets "in sharp decline" partly offset by that of data centers.

For 2024, while it anticipates a real estate market that will still be in difficulty, Legrand announces “slightly positive” organic growth (on a comparable basis) and through acquisitions in turnover. It forecasts an adjusted operating margin before acquisitions of 20% to 20,8%.

“We have the feeling that we are going to operate in 2024 in a market which will not be better than in 2023,” Mr. Coquart told journalists, while the group's activity is based 64% on equipment. “essential infrastructure” and 40% on residential.

“Residential is suffering everywhere, in Europe, in the United States, in China. (But) we are not letting our guard down, we have launched numerous ranges,” he says, adding that the latest electrical solutions (for example connected, such as thermostats or switches) still equip barely 5 to 6% of buildings.

And the real estate crisis "does not make us pessimistic for the future, because we see that in many countries, Germany, France... There is a housing deficit. We think that the hole "The current air is a bit cyclical," adds Mr. Coquart, who also insists on the diversification of his group: "15 years ago, when a building crisis hit Europe, Legrand suffered a little more."