Legrand Adjusted Operating Income Falls 8.5% in First Half
The electrical and digital infrastructure specialist reports a decline in net income and revenue for the first six months of 2024.
Legrand, the specialist in electrical and digital building infrastructures, reported an adjusted operating income of 873.1 million euros for the first half of 2024, a decrease of 8.5% compared to the first half of 2023. The adjusted operating margin for the period was 20.7% of sales. Before acquisitions, the adjusted operating margin was 20.8% of sales, which represents a decrease of 1.4 point compared to the first half of 2023.
Consolidated revenue fell 2.0% to 4,210.3 million euros. This result included a 2.0% organic decline and a 0.4% increase due to the expanded perimeter from acquisitions. Currency exchange rates contributed a 0.4% decrease to the total.
Net income attributable to the Group fell 11.3% to 577.6 million euros. The company attributed this trend to the lower operating income, an unfavorable evolution in financial and exchange results, and a corporate tax rate of 27.0%. Net income per share was 2.206 euros.
Cash flow from operations was 546.3 million euros. This was a decrease of 346.4 million euros compared to the 892.7 million euros recorded in the first half of 2023. Free cash flow for the period was 468.1 million euros, representing 11.1% of revenue. The company said this decline was driven by a working capital requirement of 258.1 million euros in the first half of 2024, compared to a cash surplus of 29.4 million euros in the first half of 2023.
Investment activities saw a significant increase in spending. Cash flows used in investing activities totaled 1,252.2 million euros, compared to 193.7 million euros in the first half of 2023. This was primarily due to acquisitions and divestments of subsidiaries, which amounted to 1,169.7 million euros. During the first six months of 2024, the company acquired ZPE Systems, a U.S. specialist in serial console servers for data centers.
To support its financial position, the company completed a 600 million euro bond issue in June 2024. As of June 30, 2024, Legrand held 2.1 billion euros in cash and cash equivalents. Total gross debt stood at 5,551.8 million euros. The net debt to EBITDA ratio was 1.8 as of June 30, 2024.
For the full year 2024, the company targets organic and acquisition revenue growth in the low single digit range. Legrand expects an adjusted operating margin before acquisitions between 20.0% and 20.8%.