(LR) Legrand - Ratings and Ratios

Legrand SA (ticker LR) designs, manufactures, distributes and sells a broad portfolio of electrical and digital building-infrastructure products across Europe, North and Central America and globally, reaching roughly 170 countries. Its catalogue spans energy-distribution and management solutions (including EV-charging stations, residential panels, switchboards, UPS), wiring devices and connected-home controls, as well as security, communication and network systems (access control, emergency lighting, fire alarms, IT networking, intercoms, nurse-call). The firm also offers conduit and cable-management hardware, industrial enclosures and power-supply components, installation accessories, and a full line of lighting products.

End-users of Legrand’s solutions include hotels, office towers, data centers, shopping centres, healthcare facilities, industrial plants and residential buildings, making the company a direct beneficiary of construction activity, retro-fit programmes and the ongoing digital-building transformation. A key sector driver is the accelerating adoption of electric-vehicle infrastructure, which the International Energy Agency projects will require an estimated 1.2 billion public chargers worldwide by 2030 – a market where Legrand is a top-10 global supplier.

From a financial standpoint, Legrand reported FY 2023 revenue of €7.2 billion, up 5 % YoY, with an adjusted EBIT margin of 13.8 % and free-cash-flow conversion of roughly 80 % of operating cash flow. The company’s organic growth rate has historically averaged 3-4 % per annum, while acquisitions (e.g., the 2022 purchase of US-based smart-home firm Netatmo) have contributed an additional 1-2 % incremental revenue. Legrand’s exposure to the cyclical construction sector is partially offset by its recurring-revenue streams from service contracts and IoT-enabled building-management platforms, which have shown double-digit annual growth.

Legrand’s strategic focus on digitalisation, sustainability and geographic diversification aligns with macro-trends such as the EU’s Green Deal (targeting a 55 % reduction in building-related emissions by 2030) and the rising demand for smart-building solutions in emerging markets. Assuming construction activity stabilises at current levels and EV-charging rollout proceeds on schedule, Legrand’s top-line growth outlook remains moderately positive, though upside is contingent on successful integration of recent acquisitions and execution of its “Connected Building” roadmap.

For analysts looking to deepen their quantitative assessment, a review of Legrand’s segment-level EBIT trends and its capital-expenditure allocation toward IoT-enabled products on ValueRay can provide useful context for valuation modeling.