Legrand SA

Mr. Roman and I are happy to welcome you to the Legrand 2025 QOM conference call and webcast. As you know, we have published today a press release, financial statements, and a slideshow to which we will refer. After a few opening remarks, we will comment the results into more details. I begin on page 4 of the deck with the three key highlights of this release. First, Legrand reports strong growth in sales, with an acceleration of growth in data centers, together with very solid results in Q1, in line with our expectations. Second, we are actively executing our strategic plan for 2030. And third, we confirm our full-year targets. We will also touch a few words on the key topics on the agenda of our incoming general meeting of shareholders. Moving to pages 6 and 7, I will start with an overview of sales. In the first quarter of 2013-2025, excluding ethics, our sales grew by plus 11.2%, with another growth of plus 7.6%, and a positive scope from acquisitions of plus 3.3%. Pays on acquisitions made so far and the likely dates of consolidation, the overall impact will be more than plus 4% full year, but of course we are targeting to complete more deals in the coming months. Regarding the FX effect, it had a positive plus 1% impact on the quarter, and based on the average rates of April, it would be close to minus 2% for the full year, Of course, again, given the current volatility of currencies, it could be quite different at the end of the year. On page 7, you will find the key takeaways per geographies on a like-for-like basis. In Europe, with a building market that remains sluggish overall in most countries, sales were almost flat organically at minus 0.3% in Q1. In North and Central America, sales grew an impressive plus 18.7% in Q1, boosted by an outstanding performance in data centers. Like the rest of the world, sales were up plus 4.8% in the first quarter. Sales grew in India and the Middle East, which was partially compensated by a retreat in both China and Brazil. These were the main comments I wanted to make on sales. I will now hand over to Franck for more color on our financial performance. Thank you, Benoit.

And good morning to all of you. I will start on page 8 with adjusted operating margin. We recorded a solid adjusted operating margin of 20.7% in Q1 2025. Acquisition had no dilutive impact this quarter, meaning that the increase of margin year-on-year comes from operational leverage, partially offset by an increase in restructuring expenses. In the quarter, once again, the high profitability level of the group demonstrates the strengths of our strategic model and our strong ability to deliver. I wanted to give you more color on the U.S. tariff impact on slide 9. The Le Grand exposure to the U.S. tariff is well known, with close to 50% of our U.S. COGS being imported. We are, of course, fully mobilized to respond to the very fluid situation of international customs policies, particularly in the U.S., with the deployment of comprehensive action plans that include targeted sales price increase, saving plans, supply chain adjustment, some industrial footprint adaptation, and more. Going now to page 10, first, the net profit stood at 293 million euros, representing 12.9% of our sales. The nice increase coming from the operating profit is partially offset by the negative impact of financial results and the rise in the corporate income tax. Second, the free cash flow came to 188 million euros, at 8.3% of sales for the quarter. Page 11 illustrates the robustness of our balance sheet with a net debt to EBITDA ratio of 1.5 at the end of the quarter. This concludes the key financial topics I wanted to share with you this morning. I'm now handing over back to Benoit. Thank you, Franck.

We can now move to page 13 of the deck. We confirmed the full year target announced in February. A confidence in our ability to execute and adapt, despite a volatile environment, taking into account the world's current microeconomic outlook and progressively normalizing custom policies, we target sales growth of between plus 6% and plus 10% organically and through acquisitions, an adjusted operating margin before acquisitions holding stable overall compared to last year, at least 100% achievement rate for the first year of our 2025-2027 CSR roadmap. From page 15 to 18, we show that we are fully on track to achieve a strategic plan to 2030 through three Q1 2025 key items. First, page 15 highlights the outstanding performance that we recorded in data centers, testifying to the relevance of the group's offering. with an acceleration in organic growth in the quarter compared to the previous quarters. The vitality of the order book confirms the strong growth expected throughout 2025. Second, page 16, regarding our ongoing execution in terms of acquisitions. We announced two acquisitions this quarter, totaling 50 million euros of acquired 12-month sales in connected healthcare in Europe and data centers in Australia. These acquisitions further strengthen the group's leadership in these buy-in segments and illustrate once again the vitality of our pipeline and the quality of our acquisition process. On pages 17 and 18, a quick reminder of our newly launched CSR Roadmap to 2027, that we presented during a dedicated CMD in March. As you know, CSR has been fully integrated in the group's performance and value creation strategy for two decades, and we consider it as a decisive competitive advantage. Now a few words on the key topics on the agenda of our incoming AGM, which will take place on May 27. On page 20, with the proper termination of Mrs. Stéphane Paré as independent director, whose experience as chair and CEO of listed company FDG United will be highly valuable to the board. Together with the proposed renewal of both Patrick Coller and Florent Ménégault, the board composition will continue to be among the industry's best practices, with 82% of independent members, 55% of women, and seven nationalities represented. Moving to page 21, as announced previously, the proposed dividend for 2024 is of 2.2 euros per share, up plus 5% versus last year. Those were the key topics of the release. I suggest we now switch to Q&A.